Friday, March 17, 2017



  • Interest Rate is not fixed, change in interest rate will be notified from time to time whenever applicable, very much like PPF.
  • It Can not beat inflation ( if you get 8% return and inflation is high as 6%, real figure of inflation comes more than 8% per year, you will not get enough money to fund the education / marriage) Play school Education fees cost is around 1-3 lac per year.
  • Lock In Period is too high compare to almost no lock in - in Mutual Funds
  • Premature Withdrawals not allowed


Wednesday, January 25, 2017

CKYC - from 1st February,2017

What is CKYC? 

Central KYC Registry is a centralized repository of KYC records of customers in the financial sector with uniform KYC norms and inter-usability of the KYC records across the sector with an objective to reduce the burden of producing KYC documents and getting those verified every time when the customer creates a new relationship with a financial entity.

The Central Govt. vide notification dated. Nov, 26, 2015 has authorised Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI) to act as and to perform the functions of the CKYC Registry including receiving, storing, safeguarding and retrieving the KYC records in digital form of a Client. A 14 digit CKYC Number would be issued as identifier of each client.

From when will CKYC come into effect for Mutual Fund Transactions? 

AMFI has mandated within the Best Practice Circular that the new CKYC process needs to be implemented from 01-02-2017

What is the alteration in MF New investor on-boarding process? 

Thursday, January 19, 2017

Pradhan Mantri Jan Suraksha Bima Yojana Policy

Pradhan Mantri Jan Suraksha Bima Yojana Policy (PMSBY)

Insurance is not a newer concept to India; however, its reach is still much limited.  In spite of so many insurance companies operating in India with their products and services, there are a majority of people in rural areas, who are not at all covered under any kind of insurance. Pradhan Mantri Suraksha Bima Yojana is for them.
These people are those who are mostly below the poverty line and insurance is an unaffordable service for them.  PMSBY aims to reach such people with its benefited insurance schemes after the successful performance of Jan Dhan Yojana.
Suraksha Bima Yojana Benefits
  • The death benefits are up to 2 lakhs
  • In case of irrecoverable and total loss of both hands, both eyes or sight or one leg or foot, the insurance cover would be up to 2 lakh
  • In case of lost of one leg, hand, foot, eye or sight, the sum assured would be Rs 1 lakh

Suraksha Bima Yojana Premium
The premium for PMSBY is such that even the poorest of poor Indian would be able to afford it.  The premium is just Rs 12 per annum for each member.  This amount would be deducted from the policy holder’s saving bank account with an auto-debit facility, in the month of June every year.
If somehow, the amount could not be auto-debited from the policyholder’s account on 01st of June, the policy would commence only when the auto-debit has been done on the account and premium paid.  As foreseen, the premiums would remain equally low at least for next few years.

Friday, March 18, 2016

Impact of PPF Rate reduced from 8.7% to 8.1 %

Impact of PPF Rate reduced from 8.7% to 8.1 % 

As expected, government do not want to take burden on it's own balance sheet, so they are going to pass it on to consumer by linking it to Gsec Rates in India.

Example :- if someone is investing with a view that one will get return of 8.7% compounding returns over a period of 15 years of tenure of PPF, now that charm is gone as PPF rates are volatile.

Someone having 20,00,000 Balance in PPF which were earning around 1,74,000 per year (tax free) will result in earning 1,62,000 (tax free) i.e loss of Rs. 12,000 loss every year from this time.

above all, no one understand the Inflation scenario when investing in PPF.

Thursday, February 18, 2016

Some Mutual Funds are Factory of NFO's

In recent past we have seen many NFO's because some infra themes were not there so one needs to add one. but in past 1 year so many big and some small fund houses/ mutual funds have started business of asset gathering, everyone are in league of becoming the 1st prize winner, they are in race.  some of them feel NFOs are growth engines to build their assets and profits.

What happens when you have more and more schemes?

what happen in recent time - all people associated with mutual funds get more incentives as new offer comes in, fund houses can spare more money as fund sizes are small initially.
some of the fund houses / mutual funds have similar schemes in their portfolio but they are still not merging it because everyone earns more on small funds. in this race of earning or making company big, who suffers is investor.

So what should investor do? 

Thursday, February 11, 2016

Blood Bath In Indian Equity Market, A Perspective

The first common reaction in seeing market 800 points down in red is, oh my god! it is the end of the world - It feels like it’s going to go down further, I should have waited some more time to make an investment. ask yourself (how much money is in equities of your total net worth ?)

So let us understand what share market (sensex) is:-

When you buy Equities- you buy a SHARE/ Partnership / Holding / Business by investing in particular stock / company / equity mutual funds (equity mutual funds consist of around 20-40 stocks in one particular fund)

Let us understand that equities are for appreciation, it takes time to build businesses, it may not give you 8%-9% yearly returns like your FD’s / PPF or Post office money, but it gives you inflation adjusted returns in long term as the businesses grows / makes profits – it reflects in balance sheet of the company & stock prices goes up or down.