RBI bans zero percent EMI scheme on credit cards

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The Reserve Bank of India Wednesday banned zero percent equated monthly instalment (EMI) scheme offered on credit cards for purchase of consumer goods.

"Since the very concept of zero percent interest is non-existent and fair practice demands that the processing charge and RoI charged should be kept uniform product/segment wise, irrespective of the sourcing channel, such schemes only serve the purpose of alluring and exploiting the vulnerable customers," the central bank said in a statement.

In the zero percent EMI schemes offered on credit card outstandings, the interest element is often camouflaged and passed on to customer in the form of processing fee, it added.

The RBI also said that no additional charges can be levied on payment through debit cards.

"There are instances where merchant establishments levy fee as a percentage of the transaction value as charges on customers who are making payments for purchase of goods and services through debit cards. Such fee are not justifiable," it said.

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Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

1. ICICI Prudential Tax Plan Invest Online
2. HDFC TaxSaver Invest Online
3. DSP BlackRock Tax Saver Fund Invest Online
4. Reliance Tax Saver (ELSS) Fund Invest Online
5. Birla Sun Life Tax Relief '96 Invest Online
6. IDFC Tax Advantage (ELSS) Fund Invest Online
7. SBI Magnum Tax Gain Scheme 1993 Invest Online
8. Sundaram Tax Saver Invest Online
9. Edelweiss ELSS Invest Online

------------------

Best Performing Mutual Funds

1. Largecap Funds Invest Online
1. DSP BlackRock Top 100 Fund
2. ICICI Prudential Focused Blue Chip Fund
3. Birla Sun Life Front Line Equity Fund
2. Large and Midcap Funds Invest Online

1. ICICI Prudential Dynamic Plan
2. HDFC Top 200 Fund
3. UTI Dividend Yield Fund
2. Mid and SmallCap Funds Invest Online

1. Reliance Equity Opportunities Fund
2. DSP BlackRock Small & Midcap Fund
3. Sundaram Select Midcap
4. IDFC Premier Equity Fund
3. Small and MicroCap Funds Invest Online

1. DSP BlackRock MicroCap Fund
4. Sector Funds Invest Online

1. Reliance Banking Fund
2. Reliance Banking Fund
5. Tax Saver MutualFunds Invest Online
1. ICICI Prudential Tax Plan
2. HDFC Taxsaver
3. DSP BlackRock Tax Saver Fund
4. Reliance Tax Saver (ELSS) Fund
6. Gold Mutual Funds Invest Online

1. Relaince Gold Savings Fund
2. ICICI Prudential Regular Gold Savings Fund
3. HDFC Gold Fund

Chit Fund Investing Risks

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Sarita and her husband Shiva earn an income by working as a maid and a driver in the Vijayawada district of Andhra Pradesh. They invest a part of their income in the Dhanarashi Chit fund that is run by a local jeweller. When the first meeting was called for the auction of the fund, Sarita and her husband did not participate and chose to wait for better returns. However, by the time Sarita was ready to bid, the jewellery shop was busted and the owners were caught by the police for fraudulent transactions. The police assured Sarita and other investors of the fund that their money would be returned; however, it's been over a year and they have still not received any news.

What are Chit Funds?

Chit funds are indigenous saving mechanism that is unorganised and run between friends, families and known persons. Chit funds are easy to join as there is very little paperwork to be submitted and the entire set up is based on trust. They have been around for over 1000 years and are present in other countries too where they are popularly known as Rotating Savings and Credit Associations.

How do they function?

Suppose a group of 65 members come together and contribute Rs. 3,000 every month for 65 months. The corpus will collect Rs. 1, 95,000 in the first instalment. Every month, an auction will be held in which the members are allowed to bid for the chit fund amount collected that month and the person offering the lowest bid will be awarded the bid. The bid will begin at a minimum discount of 5% (foreman/fund administrator's commission) and can go up to a maximum of 40%. Suppose the winning bidder is willing to offer a discount of 35% in the first month, then, s/he will get Rs. 1,26,750. The discount amount of Rs. 68,250 minus the 5% commission to the foreman will be distributed as dividend amongst all the members. So, once the foreman is paid Rs. 3,412.50 as commission, the balance amount of Rs. 64,837.50 is distributed among the 65 members and each member is entitled to Rs. 997.50 as dividend. The dividend amount is adjusted with the next month's instalment to be paid by the members and hence the next instalment contributed will be Rs. 2002.50.

The winner of the bid, also known as the "prized member" will have to continue contributing to the chit fund for all 65 months even though they are not allowed to bid again. The members who wait till the end for lower discounts will be the ones who really make a profit in the fund. The returns are not assured as it depends largely on the bidding interest.

Why are they Popular?

Chit funds are one of the most popular investment vehicles in the country even though it is unregulated and the entire set up is built on trust. Small businessmen and low income group individuals can avail funds on time at nominal rates through bids. Individuals who bid early in the chit funds do not earn any returns and end up paying an "effective" interest to avail the funds on an urgent basis.

It is difficult to assess the profit or loss a person makes from chit funds as the outcome is largely dependent on the bid results. Often, persons who have bid early have been able to avail funds at lower rates than what they would have had to pay the bank on availing a loan.

Regulation

A Chit Fund Act, 1982, has been framed to regulate and control chit fund operation by various state governments, but unorganised chit funds are rampant in the country. Since the chit fund need to deposit 100% value of the "pot" with the Registrar of Chits prior to commencement of the chit scheme, small funds do not register themselves as then they will have to forgo the auction for the first month as the foreman is paid the first month's fund to compensate him/her for the deposit made.

Different Types of Frauds

Chit fund frauds have become a major issue and happen for various reasons, such as:

• The foreman/fund manager disappears with the corpus amount.
• A member could default in installment payment or disappear after winning the first bid.
• The discount rate might be rigged and a desperate member might end up paying a higher discount.

It is advisable to invest only in registered chit funds that have completed many chit funds in the past. The Ministry of Corporate Affairs has an exhaustive list of registered chit funds; however, many chit funds get unlisted, so do your research before investing. Secondly, only invest in a chit fund if you are confident that you will be able to complete all the installments or you might end up paying a penalty.

Considering the risks, it is inadvisable to invest in chit funds, but if you intend to join one, do your homework thoroughly as there is very little scope of recovery in case of a scam.

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

Leave your comment with mail ID and we will answer them

OR

You can write back to us at PrajnaCapital [at] Gmail [dot] Com

---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

1. ICICI Prudential Tax Plan Invest Online
2. HDFC TaxSaver Invest Online
3. DSP BlackRock Tax Saver Fund Invest Online
4. Reliance Tax Saver (ELSS) Fund Invest Online
5. Birla Sun Life Tax Relief '96 Invest Online
6. IDFC Tax Advantage (ELSS) Fund Invest Online
7. SBI Magnum Tax Gain Scheme 1993 Invest Online
8. Sundaram Tax Saver Invest Online
9. Edelweiss ELSS Invest Online

------------------

Best Performing Mutual Funds

1. Largecap Funds Invest Online
1. DSP BlackRock Top 100 Fund
2. ICICI Prudential Focused Blue Chip Fund
3. Birla Sun Life Front Line Equity Fund
2. Large and Midcap Funds Invest Online

1. ICICI Prudential Dynamic Plan
2. HDFC Top 200 Fund
3. UTI Dividend Yield Fund
2. Mid and SmallCap Funds Invest Online

1. Reliance Equity Opportunities Fund
2. DSP BlackRock Small & Midcap Fund
3. Sundaram Select Midcap
4. IDFC Premier Equity Fund
3. Small and MicroCap Funds Invest Online

1. DSP BlackRock MicroCap Fund
4. Sector Funds Invest Online

1. Reliance Banking Fund
2. Reliance Banking Fund
5. Tax Saver MutualFunds Invest Online
1. ICICI Prudential Tax Plan
2. HDFC Taxsaver
3. DSP BlackRock Tax Saver Fund
4. Reliance Tax Saver (ELSS) Fund
6. Gold Mutual Funds Invest Online

1. Relaince Gold Savings Fund
2. ICICI Prudential Regular Gold Savings Fund
3. HDFC Gold Fund

JP Morgan India Smaller Companies Fund

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Buy Gold Mutual Funds

Call 0 94 8300 8300 (India)

 

 

Since the mandate is to focus on smaller companies, the scheme's universe comprises companies constituting the bottom fourth by way of market capitilisation of stocks listed on the NSE or BSE. These companies need to have a strong growth potential, a special product and should cater to a niche segment. There is no particular sectoral bias and the strategy is to identify companies which have the potential to scale up significantly to become materially larger in the medium to long term.

It has a large portfolio of around 59 stocks with several of them getting a miniscule allocation.

 

Performance

It was launched just before the market crisis of 2008 and struggled to stand on its feet in the initial two years. But it bounced back in 2010 when it outperformed the category average as well as its benchmark. It curtailed its losses in the market crisis of 2011 too.

The good run has since then continued unabated as it has outperformed in the past two years as well. It was also part of the top-2 quartile last year.

One look at the fund's portfolio and it is clear that all its top gainers are mid caps. Shree Cement, Eicher Motors, Mphasis, Crisil, LIC Housing and Exide Industries to name a few.

On the other hand, it has burnt fingers in its small cap bets even though average small cap allocation has been around 15 per cent. Some of them include Bharati Shipyard, Advanta India, SREI Infrastructure Finance, Jubiliant Lifesciences and Elecon Engineering.

 

Why invest?

A diversified portfolio with consistent management, the fund has shown its mettle in varied market cycles over the years. A high expense ratio is the only dampener.

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

Leave your comment with mail ID and we will answer them

OR

You can write back to us at PrajnaCapital [at] Gmail [dot] Com

---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

1. ICICI Prudential Tax Plan Invest Online
2. HDFC TaxSaver Invest Online
3. DSP BlackRock Tax Saver Fund Invest Online
4. Reliance Tax Saver (ELSS) Fund Invest Online
5. Birla Sun Life Tax Relief '96 Invest Online
6. IDFC Tax Advantage (ELSS) Fund Invest Online
7. SBI Magnum Tax Gain Scheme 1993 Invest Online
8. Sundaram Tax Saver Invest Online
9. Edelweiss ELSS Invest Online

------------------

Best Performing Mutual Funds

1. Largecap Funds Invest Online
1. DSP BlackRock Top 100 Fund
2. ICICI Prudential Focused Blue Chip Fund
3. Birla Sun Life Front Line Equity Fund
2. Large and Midcap Funds Invest Online

1. ICICI Prudential Dynamic Plan
2. HDFC Top 200 Fund
3. UTI Dividend Yield Fund
2. Mid and SmallCap Funds Invest Online

1. Reliance Equity Opportunities Fund
2. DSP BlackRock Small & Midcap Fund
3. Sundaram Select Midcap
4. IDFC Premier Equity Fund
3. Small and MicroCap Funds Invest Online

1. DSP BlackRock MicroCap Fund
4. Sector Funds Invest Online

1. Reliance Banking Fund
2. Reliance Banking Fund
5. Tax Saver MutualFunds Invest Online
1. ICICI Prudential Tax Plan
2. HDFC Taxsaver
3. DSP BlackRock Tax Saver Fund
4. Reliance Tax Saver (ELSS) Fund
6. Gold Mutual Funds Invest Online

1. Relaince Gold Savings Fund
2. ICICI Prudential Regular Gold Savings Fund
3. HDFC Gold Fund

Should you switch to NPS for pension planning?

Invest In Tax Saving Mutual Funds Online

Download Tax Saving Mutual Fund Application Forms

Buy Gold Mutual Funds

Call 0 94 8300 8300 (India)

 

The Finance Ministry has repeatedly suggested that the EPS subscribers should be allowed to migrate to the New Pension Scheme which has individual accounts for every member. In a recent letter to the Labour Ministry, it wrote that this would free the government "from any open ended and financially unsustainable liability of the EPS.

The world over, countries and organisations which had promised defined benefits to their citizens and employees are strapped with pension bills they can't afford.

However, defenders of the EPS claim that the government is trying to push the NPS which is a defined contribution scheme. The government is trying to discredit the scheme because the NPS has not found any takers. He points to a 2011 study which used the World Bank's valuation method and declared that the EPS could be sustained for decades. The study said that given the size of the scheme, the deficit was not too much and if some of the assumptions used were modified, the shortfall would turn into a surplus.

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

Leave your comment with mail ID and we will answer them

OR

You can write back to us at PrajnaCapital [at] Gmail [dot] Com

---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

1. ICICI Prudential Tax Plan Invest Online
2. HDFC TaxSaver Invest Online
3. DSP BlackRock Tax Saver Fund Invest Online
4. Reliance Tax Saver (ELSS) Fund Invest Online
5. Birla Sun Life Tax Relief '96 Invest Online
6. IDFC Tax Advantage (ELSS) Fund Invest Online
7. SBI Magnum Tax Gain Scheme 1993 Invest Online
8. Sundaram Tax Saver Invest Online
9. Edelweiss ELSS Invest Online

------------------

Best Performing Mutual Funds

1. Largecap Funds Invest Online
1. DSP BlackRock Top 100 Fund
2. ICICI Prudential Focused Blue Chip Fund
3. Birla Sun Life Front Line Equity Fund
2. Large and Midcap Funds Invest Online

1. ICICI Prudential Dynamic Plan
2. HDFC Top 200 Fund
3. UTI Dividend Yield Fund
2. Mid and SmallCap Funds Invest Online

1. Reliance Equity Opportunities Fund
2. DSP BlackRock Small & Midcap Fund
3. Sundaram Select Midcap
4. IDFC Premier Equity Fund
3. Small and MicroCap Funds Invest Online

1. DSP BlackRock MicroCap Fund
4. Sector Funds Invest Online

1. Reliance Banking Fund
2. Reliance Banking Fund
5. Tax Saver MutualFunds Invest Online
1. ICICI Prudential Tax Plan
2. HDFC Taxsaver
3. DSP BlackRock Tax Saver Fund
4. Reliance Tax Saver (ELSS) Fund
6. Gold Mutual Funds Invest Online

1. Relaince Gold Savings Fund
2. ICICI Prudential Regular Gold Savings Fund
3. HDFC Gold Fund