Financial Planning

Putting your Emergency Funds in to FD/s – now there is an option Key principal for putting money into FD is quick access to emergency: In India people are very familiar with FD’s as we feel, it is quick access in case of emergency, it is true in some sense, but now we have alternative to that, i.e. Liquid Mutual Funds or Floating Rate Mutual funds . Particulars Short Term FD’s Liquid Mutual Funds Emergency money planning : Not really as you can not break or withdraw It overnight : Yes – as you can withdraw it from any Visa ATM centre across the world. Easy Access : No. As one has to go to bank to withdraw the amount. : Access to all visa ATM* across the world, Online Access Tax : Interest will be clubbed into your income & will be tax accordingly. : No Tax to pay directly by Investor if opted for Dividend Reinvestment option. Penalty

HOUSING LOAN :- This is a must read article, if you already have a housing loan or you are planning to take a housing loan Breakup for EMI (Principal & Interest Explained here) EMI BASIC CALCULATION:- Loan is opted from a bank say for example (Rs. 35 Lacs for 20 Years of Term) you have to pay an EMI (Equated Monthly Installment) & when you pay your EMI, it consists of 2 major part, one is Interest on your EMI & second is Principal amount you have paid. By paying an emi, every month it reduces the loan by some amount as it goes towards payment of your principal out standing. With passing each installment every month, your loan amount decreses by some extent. You pay More Interest when the loan /Emi starts and pay less when you come closer to pay off your loan. The longer the period of loan….the component of interest is high. So one thing is pretty clear from the above sentence, your initial EMI goes majorly towards INTEREST on your housing loan, PRINCIPA