You should invest in Mutual Fund for financial gains that may come with some risk. The risk can be managed or averted with some advice from the experts. You should select one top Mutual Fund in India and collect information about it. You may have to consult a professional who is ready to help you even for a fee. The person will definitely know about financial funds in India. That person has years of experience in the field of the Mutual Fund. You must know for sure that the Mutual Funds investment is fraught with risk. With complete awareness of which mutual fund is performing well and with the assistance of some experts, you should go ahead and invest in Mutual Fund. It is imperative for an investor to have some awareness about the top Mutual Fund in India. You must have your financial goals in place and the level of risk appetite that you have. These are the very basics.
Before investing in a fund, you should know for sure what your goals are for investing. Is it a goal of long-term capital gains or is it important to get monthly returns? There are funds that are good to invest in for the future college education of children or a marriage in the family after a few years. Almost all the categories of the mutual fund are performing well according to their claims. It is not possible to put your finger on one category and say it is the best. You have to look into the various performance parameters and relate them to your own needs. If you can tolerate risk, you may expect better returns. You should look at the style and fund type. The main aim of a fund category is capital appreciation. If you can handle long-term risk and your goals are long-term, the long-term capital appreciation fund will be good for you. These funds hold their assets in common stocks, and they are consequently riskier. With the higher level of risk, these funds promise greater returns in the distant future when you need to fulfill your goals. These growth and capital appreciation funds don’t pay you any dividends. If you need current income from your investment in your portfolio, you should an income fund. These funds buy government bonds and corporate debts. There are funds based on the time horizon like short, medium and long term. Investors may have long-term needs but they may not be willing to take the assumed risk. For these people, a balanced fund is advisable that is invested in both stocks and bonds.
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A personal loan does not come attached with utility restrictions and can be used as immediate help for an urgent need. The current rate of interest varies between 11 % to 35 %, which depends on several factors like your income, credit score, age, other debts, etc.
Since it is an unsecured loan, you might have to pay a high rate of interest. If you are thinking of pre-closure, you must pay off the loan with the highest rate of interest first. Methods of preclosing a Personal Loan - part-payment or pre-payment? A personal loan can be availed when facing a cash crunch, and once finances look sorted, you would want to get rid of the debt as soon as possible. There are two ways how to prepay your loan:
You can use a calculator to assess the real profit by a prepayment. If the profit is marginal, then it is not recommended to make the prepayment. Consider factors like:
Procedure for the Pre-closure of Your Loan A loan closure can be a regular closure or a pre-closure. In both cases, you must follow these crucial things while closing a loan
How to pre-close the loan? Pre-closure or prepayment means repaying your entire loan before the tenure ends. There could be a penalty for pre-closing the loan, but it can lead to a reduction of interest rate and debt burden. Following is the procedure involved in pre-closing your loan: Step 1 - You need to visit your bank or visit the credit line webpage or app from where you have taken the personal loan. Step 2 – You would need to submit the necessary documents mentioning the loan account number, clearance of your last EMI, and a cheque or online payment for prepaying your entire loan. Step 3 – If there is any charge or penalty charged by the lender, you would need to pay that too, along with the prepayment. Step 4 – Collect the acknowledgement letter for future references. Step 5 – After following the appropriate procedure, you will get the loan agreement after the closure of the loan. Documents required for Personal Loan Pre-closure
Documents to collect after Pre-closure
When you must invest and not prepay:
When you must prepay and not invest:
Conclusion Pre-closure of personal loans is a relatively simple process, especially if taken through a credit line. The correct norms and procedures should not be neglected at any cost to avoid any problems related to your credit. It has numerous benefits which you can enjoy after the closure, provided the appropriate factors are considered and followed. You are faced with a dilemma: Your insurance advisor asks you to start a ULIP for better growth, but you wish to create a fixed deposit for 10 years. Let’s check what both options can do.
Understanding ULIPs and FDs A Unit Linked Insurance Plan (ULIP) is an insurance-cum-investment option, which offers life coverage as well as controlled exposure to the markets. Thus, your investment in the plan is partially diverted to a mix of high grade securities to secure growth for your money. A bank FD, is a sum of money that you set aside with the bank at a certain rate of interest for a fixed tenure. At the end of the tenure, you receive your entire principal plus the interest earnings on it. A ULIP plan… * Flexibility of investment: ULIPs offer a high degree of flexibility, by letting you choose a plan as per your risk appetite and future goals. You can switch funds based on your investment objectives and market trends – this means you can exercise control over the final growth of your investment. * Risk is spread: There is always some element of risk in market-linked instruments. However, the risk is spread when the tenure is longer, and this is true in the case of unit linked insurance plans. * Gradual savings lead to bumper rewards: By staying invested in a ULIP policy for 10 years, your investment grows with focussed savings into a large amount of money that fulfils future objectives easily. * You can withdraw money against it: After the cut-off period of 5 years, you may borrow money against the ULIP plan if you need funds. * The premiums are tax-exempt: Premiums paid are tax deductible under Sec 80C of the Income Tax Act, 1961. Whereas, a 10-year Fixed Deposit… * Offers predictability: You know how much your deposit will grow even before you invest in it. The interest rate offered on the FD is unchanged despite changes in market rates during the FD’s tenure. * Provides loan against the deposit: You can borrow a loan against the deposit instead of prematurely withdrawing it, if you need money. You may borrow up to 90% of the deposit amount as a loan. You may repay the loan and choose to renew the FD at time of maturity. * The income is taxed: However, the biggest drawback of creating the FD is that the interest earning on it is taxed 10% TDS if it exceeds Rs 10,000 in a year. This is a loss especially when you create a long tenure FD. Meanwhile, you can get around this situation by creating a 5-year tax saving FD and then renewing it for a further 5 years. * Returns are not always high: The returns on FDs are not always commensurate with inflation. So even if you get a good corpus at maturity, it may not be high enough to make future plans with. Based on the information above, we recommend choosing ULIP policies for their potential to create wealth without the tax burden. |
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April 2022
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