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Savings accounts will earn you more
Savings accounts will earn you more
NEW DELHI: In a measure that would bring cheers to savings accounts holders, RBI on Friday asked banks to start calculating interest rates on
The move will enable saving accounts holders to earn better interest income on deposits since banks currently calculate interest on the lowest available balance, from 11th and the last date of a month. In the existing system, if one withdraws certain amount from his savings accounts on the last day of a month, he will lose interest on that amount for the whole month. But, under the new system, even if he withdraws in the last day of the month, he will get the interest income on the first 29 days of the month. ''We advise that payment of interest on savings accounts may be made by banks on a daily product basis with effect from April 1," RBI said in a notification, asking banks to ensure a smooth transition and work out the modalities in this regard. RBI had proposed the new system in its credit policy for April, 2009-10. In the statement RBI had said, ''Several banks have suggested that interest on savings bank accounts may be calculated either on the minimum balances in the deposit accounts during the period from the first to the last day of each calendar month or on a daily product basis." RBI had said that the matter was referred to the IBA, which was of the view that payment of interest on a daily product basis would be feasible only when computerisation in banks is completed. In view of the present satisfactory level of computerisation in commercial bank branches, it is proposed that, ''payment of interest on savings bank accounts by scheduled commercial banks (SCBs) would be calculated on a daily product basis with effect from April 1, 2010," the Reserve Bank said. However, earlier banks had urged RBI to postpone the move. ''We requested them to either reduce the savings rate or postpone the implementation. It will affect our margins and profit, Indian Banks Association chairman MV Nair had said. However, RBI insisted to implement the new modalities. Banks pay an interest rate of 3.5% on the savings account deposits. Currently, interest rates on saving accounts are de-regulated, barring up to Rs 2 lakh. The RBI only administer interest rates on saving bank deposits up to Rs 2 lakh, and for the deposits above this amount, banks are free to give any interest rates. Source: Economic Times |
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Mutual Fund News for Today (February 19th 2010) -- Morning Edition
Mutual Fund News for Today (February 19th 2010) -- Morning Edition
| DIVIDEND 1.UTI MF declares dividend for Fixed Income Interval Fund. UTI Mutual Fund has approved Feb.23, 2010 as the record date for declaration of dividend under dividend option of UTI Fixed Income Interval Fund - Quarterly Interval Plan III (debt oriented interval scheme). The quantum of dividend will be 100% of distributable surplus as on the record date. GENERAL 2.MFs line up long-term plans to help save taxes. It's that time of the year when investors go all out to save on tax and maximise returns on their investment portfolio. Keeping up with the spirit of the times, fund houses are launching longer duration fixed-term plans that will help investors pocket decent returns on their portfolio and also derive indexation benefits to save on tax. Fixed-term plans are close-ended funds bearing a maturity of 14-17 months (covering two financial years). In mutual funds, an investment held for a period of more than 365 days qualifies as a long-term investment. The tax liability in long-term debt funds is computed at 20% with indexation and 10% without indexation. News Source - ECONOMIC TIMES. |
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Mutual Fund News for Today (February 18th 2010) -- Evening Edition
Mutual Fund News for Today (February 18th 2010) -- Evening Edition
| DIVIDEND 1.Principal MF Declares Dividend For Service Industries Fund. Principal Mutual Fund has announced the declaration of dividend on the face value of Rs 10 per unit under dividend option of Principal Service Industries Fund. The record date has been fixed as 22 February 2010. The quantum of dividend will be 15%, subject to the availability of the distributable surplus as on the record date. NEW FUND LAUNCH 2.IDFC Fixed Maturity Plan - Half - Yearly Series - 9 Plan A. This scheme is a Close Ended Income scheme. The new fund offer starts from 17th Feb 2010 to 22nd Feb 2010. News Source - AMFI. |
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Mutual Fund News for Today (February 18th 2010) -- Morning Edition
Mutual Fund News for Today (February 18th 2010) -- Morning Edition
| GENERAL 1.MF distributors chase 'retail HNIs'. Ever heard of the term retail HNIs? Well, it's a new class of investors with a 'little large purse' that mutual fund distributors are busy chasing these days. According to industry experts, the recent impressive inflows registered by the mutual fund industry is thanks to this emerging class of investors. They add that mutual fund distributors may be tapping this group to earn a viable source of income as they were wilting under pressure ever since the market regulator Sebi abolished the entry load of mutual fund investment in August, denying upfront commission to distributors. NEW FUND LAUNCH 2.Deutsche AMC unveils DWS Fixed Term Fund Series 69. Deutsche Asset Management, the mutual fund arm of Deutsche Bank Group announced the launch of DWS Fixed Term Fund Series 69 - a 17 month close ended Debt Fund. The DWS Fixed Term Fund Series 69 is a fixed maturity plan offering investors the benefit of double indexation to get tax efficient returns, low interest rate sensitivity and low credit risk. The fund opens for subscription on Feb. 17, 2010 and closes on Mar. 3, 2010. |
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Mutual Fund News for Today (February 17th 2010) -- Evening Edition
Mutual Fund News for Today (February 17th 2010) -- Evening Edition
| GENERAL 1.MFs want ELSS-Like tax benefits. India's mutual fund industry is lobbying with the finance ministry to extend tax benefits, currently available to equity-linked savings schemes (ELSS), to all equity schemes with a three-year lock-in. This move is aimed at encouraging retail investors to invest more in equity schemes as an alternative to other tax-saving products, according to a person privy to the matter. "This would go a long way in incentivizing investors to invest for the long-term in equity mutual fund schemes," said AP Kurien, chairman, Association of Mutual Funds of India (Amfi). The industry is hopeful that the finance ministry will take a favorable view of their request. News Source - ECONOMIC TIMESNEW FUND LAUNCH 2.Peerless MF Unveils Ultra Short Term Fund. Peerless Mutual Fund has launched a new fund named as Peerless Ultra Short Term Fund, an open ended debt scheme. The new issue is open for subscription from 17 February and closes on 18 February 2010. News Source - NAV INDIA |
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Mutual Fund News for Today (February 17th 2010) -- Morning Edition
Mutual Fund News for Today (February 17th 2010) -- Morning Edition
| GENERAL 1.Reliance MF named best mutual fund house of the year. CRISIL FundServices, in partnership with CNBC-TV18, presented the CNBC-TV18 - CRISIL Mutual Fund Awards for outstanding mutual fund performance for the year 2009. Reliance Mutual Fund, with 5 awards and 6 nominations, won the prestigious Mutual Fund House of the Year Award. 2.SEBI looking to regulate MF distributors. Market regulator Securities and Exchange Board of India (SEBI) is working on a plan to bring mutual fund distributors within its purview. The distributor industry is today plagued by acute mis-selling and Sebi's entry could change the way you buy and sell mutual funds. CNBC-TV18's Mrinalini Krishna reports. NEW FUND LAUNCH 3.Peerless Liquid Fund. This scheme is an Open ended Liquid scheme. The new fund offer starts from 17th Feb 2010 to 18th Feb 2010. News Source - AMFI. |
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Should you invest in Hang Seng ETF?
Should you invest in Hang Seng ETF?
When your fund manager invests abroad, it's not just his stock-picking skills that are called for, understanding foreign markets as well as correctly predicting currency movements is also key. That's also called the fund manager risk. An exchange-traded fund (ETF) route is one that avoids the fund manager risk. Benchmark Asset Management Co. Pvt. Ltd—India's only fund house that specializes in ETFs—has launched an ETF that will invest in the Hong Kong equity market. Called Hang Seng BeES (HBS), it aims to passively track the movement of the Hang Seng index by investing its entire corpus in the index. Should you invest in this fund?
Graphic: Yogesh Kumar / Mint An ETF… HBS works like any other ETF. It appoints officials in the Indian stock market who are willing to buy shares that are part of the Hang Seng index, a basket of 42 companies. In exchange, the fund house will release units of HBS which can then be bought and sold on the market. …that flies abroad Unlike existing ETFs that invest in Indian equities, HBS will invest in Hong Kong. The fund's fortunes will, therefore, be very closely linked to those of Hong Kong's Hang Seng index. India is not new to foreign funds (mutual fund schemes investing in global markets). All of them are actively managed, though. They either buy and sell securities directly from foreign markets or solicit your money through a feeder fund that fund houses launch in India and then invests your money in the parent company's schemes that are domiciled abroad. These parent funds would then buy and sell scrips as per the fund manager's discretion. HBS is the first passively managed foreign fund. "We plan to launch more such country- or region-specific ETFs that invest abroad", says Sanjiv Shah, executive director, Benchmark Asset Management Co. What works… India and China are largely perceived to be two of the fastest growing economies by many global investors. China's increasing spending on infrastructure and construction areas has made it one of the world's fastest growing economies. China's foreign exchange reserves stand at $2.4 trillion. China's Shanghai index returned 80% returns in 2009, outperforming most other economies across the world. The Hang Seng index—that constitutes 37.97% that are H-Share companies (those that are incorporated in mainland China and listed in Hong Kong) and 16.32% of Red Chips companies (those that are incorporated outside mainland China but earn significant revenue from mainland China)—returned 52.02%. There are three other Indian funds that already invest in Chinese markets, albeit in different ways. Fortis China-India Fund invests directly in Chinese equities, but only to the extent of 35% of its total corpus (the rest is invested in Indian markets), Mirae Asset China Advantage Fund and JPMorgan JF Greater China Equity Offshore Fund invest their own corpuses in their respective international funds which invest in the Chinese equity market, including Hong Kong, and are managed by their parent fund houses. However, all these funds are actively managed and carry fund manager risk. …and what doesn't If China has been one of the world's fastest growing economies, India isn't far behind. In the past five years, Nifty has been one of the best performing indices globally. It returned around 24% against 10% by the Hang Seng index in the past five years, though the latter did well in the falling markets of 2008. Despite high growth in the past year, a section of India's fund managers still feel there is enough merit in remaining local. "India offers better investment opportunities and its fundamentals are still one of the best from a long-term perspective," says Sunil Singhania, equity fund manger, Reliance Capital Asset Management Ltd. Not all agree though. "Meaningless diversification doesn't make sense. However, if you select your geography well, investing abroad makes sense", says Sanjay Sinha, chief executive officer, L&T Finance Asset Management Co. Ltd. Fund managers, however, feel China can be quite a volatile market to invest in. That HBS is an ETF and avoids fund manager risk may be of some relief here. Ultimately, it pays to invest in markets that have a low correlation with the Indian market. We checked the correlation between Hang Seng index and Nifty in the past three years. Measured on a scale of zero to 1 with 1 being a perfect correlation (both move by the same margin in either direction), Hang Seng's correlation to Nifty stands at 0.623, according to Bloomberg. The higher the correlation between the two indices, the lesser the merit for diversification. The Hong Kong stock market closes at 4.30pm Hong Kong time or 2pm India time. If you buy HBS after 2pm, the difference between the bid/ask spread could be higher because though you can buy and sell HBS units in India, the Hong Kong market would have closed; the market participant would therefore charge a small premium to compensate for the risk. "This could be a problem in the near term, but we feel over time it would get ironed out," says Shah. Since it's an international fund, HBS' expense ratio will be 1% against, say, 0.50% of Nifty BeES— Benchmark Asset Management's India-centric ETF that tracks the Nifty index. Should you invest? Avoid HBS if you haven't yet invested fully in Indian markets. There are enough diversified and thematic funds across the market spectrum which offer you a good chance to make money including passively managed funds. Go for HBS only if you are prepared to take on the risk of this highly volatile market. Source: livemint.com |
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Mutual Fund News for Today (February 16th 2010) -- Evening Edition
Mutual Fund News for Today (February 16th 2010) -- Evening Edition
| DIVIDEND 1.Taurus Ethical Fund declares dividend. Taurus Mutual Fund has declared a dividend of 20% in Taurus Ethical Fund (open end equity oriented scheme). The record date for the dividend is February 19, 2010. NEW FUND LAUNCH 2.Benchmark Mutual Fund launches Benchmark Hang Seng BeES Fund. Benchmark Mutual Fund has launched a new open ended ETF index scheme, Hang Seng Benchmark Exchange Traded Scheme. The new fund offer would remain open from 15th February, 2010 to 24th February 2010. |
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Mutual Fund News for Today (February 16th 2010) -- Morning Edition
Mutual Fund News for Today (February 16th 2010) -- Morning Edition
| GENERAL 1.NFOs bring back interest in equity Mutual Funds. Mutual fund houses can now breathe easy. Since the ban on entry load from August 1, 2009, they were seeing a fall in their assets under management (AUM) in the equity segment. However, in January, the net inflow into equity funds was Rs 980 crore. And, equity-linked saving schemes (ELSS), which are eligible for tax deductions under Section 80C, saw net inflows of another Rs 268 crore, according to data from ICRA Online. NEW FUND LAUNCH 2.Principal Pnb Fixed Maturity Plan - 91 Days - Series XXI. This scheme is a closed ended Income scheme. The new fund offer starts from 16th Feb 2010 to 16th Feb 2010. News Source - AMFI. |
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Don't fall prey to SMSes, emails: SEBI tells investors
Don't fall prey to SMSes, emails: SEBI tells investors
| MUMBAI: Stock market regulator Sebi on Wednesday cautioned investors about the risks in paying heed to web content, SMSes, emails, advertisements Sebi said that most of these are likely to misguide investors and such advice are not always backed by any 'reasonable basis'. ''Investors should realise that when they follow such advice they are exposing themselves to undue risk in using unconfirmed information...and trading tips on an intra-day basis, short term basis or long term basis,'' Sebi said in a note on its website. ''The public in general is advised not to fall prey to or be lured by such sources of information promising quick gains and unrealistic high returns. It is advised that investors should take well informed investment decisions,'' the note added. On December 14, 2009, TOI had carried a story warning investors that mass SMSes and emails were being sent and even telemarketing calls were being made to people, inducing them to trade in particular counters. Messages titled JACKALL, VimalStk, CV (an acronym for capitalvia.com) were being circulated. Often it was observed that stock prices recommended by these entities shot up soon after such messages were sent. Some of the recent additions to the list where such messages originate from are smartprofit and estocks. On Wednesday, Sebi asked investors to deal only through Sebi-registered market intermediaries and not to invest in shares based on market rumours, unconfirmed or unauthenticated news. It also asked investors not to get swayed by ''advertisements promising unrealistic gains and windfall profits.'' Sebi also warned that one should not be guided by astrological predictions on share prices and market movements, It also said that investment decisions should not be made on the basis of implicit/explicit promises made by anyone. Source: Economic Times *Mutual Fund investments are subject to market risks. Please read the offer document carefully before investing. *Insurance is the subject matter of solicitation. Disclaimer: The content in this email is purely for Information purposes only and is not an offer or solicitation of any kind. This content should not be acted upon without consulting or without the prior advice of your financial advisor. Nothing in this email should be considered personalized advice about your investment, real estate, insurance or other personal finance decisions. The information in this email is confidential, and intended solely for the addressee. Access to this email by anyone else is unauthorized. Any copying or further distribution beyond the original addressee is not intended, and may be unlawful. |
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Mutual Fund News for Today (February 15th 2010) -- Evening Edition
Mutual Fund News for Today (February 15th 2010) -- Evening Edition
| DIVIDEND 1.Sundaram BNP Paribas Mutual Fund announces dividend under Sundaram BNP Paribas Growth Fund. Sundaram BNP Paribas Fund Mutual has declared dividend under its scheme, Sundaram BNP Paribas Growth Fund (open ended equity scheme). The quantum of dividend decided for distribution is 20 per cent that is Rs 2.00 per unit on the face value of Rs. 10 per unit. The record date decided for distribution of dividend is 19th February, 2010. GENERAL 2.Sectoral MFs make a comeback through ULIPs. Sectoral and thematic funds, which were a rave hit among mutual fund investors during the bull run, are making a comeback through unit-linked insurance plans (ULIPs) this year. Private insurers have introduced sectoral or thematic flavours like power, infrastructure, PSU companies, blue-chip stocks and price-to-earnings multiples in about 30 ULIP schemes since the beginning of this year. |
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Mutual Fund News for Today (February 15th 2010) -- Morning Edition
Mutual Fund News for Today (February 15th 2010) -- Morning Edition
| GENERAL 1.SEBI to help MF fund industry in spreading financial literacy. Market regulator, Securities and Exchange Board of India (SEBI), will help the mutual fund industry in its efforts to increase financial literacy, a top SEBI official said. "SEBI is keen on focusing on investor education. It will help the mutual fund industry in its efforts to increase financial literacy," SEBI chairman, CB Bhave, said in Mumbai. 2.Peerless commences mutual fund operations. Peerless Funds Management Company (PFMCL), a wholly owned subsidiary of the Kolkata-based Peerless General Finance & Investment Company (PGFI), announced the commencement of its mutual fund (MF) operations. PFMCL is the first financial services company in eastern India to have received the SEBI approval to set up its asset management company (AMC). |
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Know all about Section 80C of Income Tax Act
Know all about Section 80C of Income Tax Act
| What is Section In order to encourage savings, the government gives tax breaks on certain financial products under Section 80C of the Income Tax Act. Investments made under such schemes are referred to as 80C investments. Under this section, you can invest a maximum of Rs l lakh and if you are in the highest tax bracket of 30%, you save a tax of Rs 30,000. The various investment options under this section include: Provident Fund & Voluntary Provident Fund Provident Fund is deducted directly from your salary by your employer. The deducted amount goes into a retirement account along with your employer's contribution. While employer's contribution is exempt from tax, your contribution (i.e., employee's contribution) is counted towards section 80C investments. You can also contribute additional amount through voluntary contributions (VPF). The current rate of interest is 8.5% per annum and interest earned is tax-free. Public Provident Fund An account can be opened with a nationalized bank or Post office. The current rate of interest is 8%, which is tax-free and the maturity period is 15 years. The minimum amount of contribution is Rs 500 and the maximum is Rs 70,000. National Savings Certificate These are 6-year small-savings instrument, where the rate of interest is 8% and is compounded half-yearly. The interest accrued every year is liable to tax but the interest is also deemed to be reinvested and thus eligible for section 80C deduction. Equity-Linked Savings Scheme Mutual funds offer you specially-created tax saving funds called ELSS. These schemes invest your money in equities and hence, return is not guaranteed. Money invested here is locked for a period of three years. Life Insurance Premiums Any amount that you pay towards life insurance premium for yourself, your spouse or your children can be included in section 80C deduction. If you are paying premium for more than one insurance policy, all the premiums can be included. Besides this, investments in unit-linked insurance plans (ULIPs) that offer life insurance with benefits of equity investments are also eligible for deduction under Section 80C. Home Loan Principal Repayment Your EMI consists of two components, namely principal and interest. The principal component of the EMI qualifies for deduction under Section 80C. Stamp Duty and Registration Charges For Home The amount you pay as stamp duty when you buy a house, and the amount you pay for the registration of the documents of the house can be claimed as deduction under section 80C. However, this can be done only in the year in the year of purchase of the house. Five-Year Bank fixed deposits Tax-saving fixed deposits (FDs) of scheduled banks with a tenure of five years are also entitled for section 80C deduction. Others Apart from the above, things like children's education expenses that can be claimed as deductions under Section 80C. However, you need receipts to claim the same. Source: Economic Times Thank you, your business is appreciated! We strive to provide you with the best service possible. If there is anything we can do to serve you better, please let us know. Regards Gopal Krishan Doda (Financial Planner) - State Bank of India MF Agency Manager, AMFI Certified, MDRT Member Visit us at: http://www.InvestmentKit.com Join my SMS network Free! at http://labs.google.co.in/smschannels/subscribe/InvestmentKit *Mutual Fund investments are subject to market risks. Please read the offer document carefully before investing. *Insurance is the subject matter of solicitation. Disclaimer: The content in this email is purely for Information purposes only and is not an offer or solicitation of any kind. This content should not be acted upon without consulting or without the prior advice of your financial advisor. Nothing in this email should be considered personalized advice about your investment, real estate, insurance or other personal finance decisions. The information in this email is confidential, and intended solely for the addressee. Access to this email by anyone else is unauthorized. Any copying or further distribution beyond the original addressee is not intended, and may be unlawful. |
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