PFC long term infrastructure Bond

Power Finance Corporation (PFC), has launched long term infrastructure bond, and PFC is planning to rasie plans to raise Rs 5,300 crores through the Tax Saving Long Term Infra Bonds under Section 80 CCF from 24th Feb 2011 to 24th Mar 2011. These PFC bonds would be the last issuer to issue infrastructure bonds in this financial year. The bonds carry a interest rate of 8.30 per cent for 10 years and 8.50 per cent for the 15-year series. There is a lock-in period of 5 years for 10 years bonds and 7 years for 15 years bonds.
As per section 80CCF of income tax, an individuals can invest up to Rs 20,000 in these bonds in addition to the Rs 1 lakh limit available under Sections 80C, 80CCC and 80CCD such as life insurance premium, provident fund, PPF and National Savings Certificate.

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Should you invest in PFC's Long-term Infrastructure Bonds?

Kotak Gold Mutual Fund

Kotak Gold Mutual Fund is not a Gold ETF, but in fact it is a Gold Fund of Fund, and its whole sole objective is to to generate returns by investing in units of Kotak Gold ETF. Kotak Gold Fund is a feeder fund which invest its corpous into Kotal Gold ETF.

Thus being passively managed, KGF enables its investors to invest in gold through a paper form, thereby providing the convenience of Systematic Investment Plan (SIP) as well as lump sum investments, but without having its investors to open a demat account to avail its benefits (which is unlike Gold ETFs). Since SIP is a special feature of KGF, it provides the convenience and advantage of rupee-cost averaging and compounding to its investors. Also since holding a demat account is not necessary, investors would not have to incur charges such as annual maintenance charge for demat account, delivery brokerage charges, transaction charges (while investing in demat mode) etc; thus making it a cost effective investment proposition.

Moreover liquidity too is not restrained by the fund, as investors can subscribe and redeem units on all business days directly from the AMC (while purchase and sale of gold ETFs depends upon the liquidity on the exchange).

Read More infomration on Kotak Gold Mutual Fund

Issue of new banking licences may be delayed

The large corporate houses eyeing a pie of the banking sector in India may have to wait a little longer, as the Government is of the view that corporate houses should be allowed to open new banks in the country only after the banking laws are amended to empower sector regulator -Reserve Bank of India (RBI), to monitor the parent or subsidiary companies of a bank.

This follows concerns raised by the central bank that the ownership structure of large business groups may lead to a turf war among regulators if they were given licences to run banks.

RBI in its report has urged that business houses have the entrepreneurial and managerial talent of running mutual fund and insurance companies. They (business houses) have successfully penetrated into rural India, and that their talent could be harnessed in the banking sector. However, existing banks are wary about corporate houses getting banking licences as this may create an uneven playing field due to the large capital buffer that would be available to banks sponsored by industrial or business houses.

Orginal News source:
PersonalFN.com

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Money Simplified is Back!

Dear Reader,

We are glad to inform you that your favorite financial planning and investing guide, Money Simplified is back.

As you know, the guide was originally started in 2003 and was published till 2007. It covered topics from Financial Planning, Insurance, ULIPs, Retirement Planning, Tax Planning, Planning for Children’s Future and NRI Investing.

However, we took a break in between. But that is over now.

The Guide is now out again with the very first issue on "Your Guide to Insurance Planning and Protecting your Financial Future".

We at PersonalFN have come across many cases where investors have been mis-sold insurance policies by unscrupulous Insurance agents.

They have been fallen into one of the many traps that unscrupulous insurance sellers use to get out money from you.

Insurance is a critical aspect of one’s life and is very important to ensure that you do not dent your finances in facing life’s uncertainties.

PersonalFN wants to help you in this endeavor of yours.

Our latest Money Simplified issue on "Your Guide to Insurance Planning and Protecting your Financial Future" is all about that.

We write this guide to help you become more aware about what is insurance and how do you have to use insurance to ensure that you continue to live a stress free life, that you have control over.

With every chapter, you will know what exactly RIGHT for you!

So claim your right to control your own MONEY!

Download your FREE copy now! Click here!

Warm Regards
Team PersonalFN

How to Select Right ULIP?

ULIPs are the most miss sold products in the Personal Finance domain. ULIP plans are revolutions for those who are looking for insurance and assured return on their insurance investments. These insurance products along with assured tax returns are also linked with tax benefits. The assured return on insurance investments has impressed many investors.


In the conventional Insurance products, the insurance component takes edge over the saving component, but in ULIPs insurance cover is secondary focus, while focusing mainly on return pert of your investment. ULIP offers opportunity for investor to select a product which matches their risk profile. Depending upon the risk factor of the investor he can select any ULIP product.


ULIPs are more like Mutual Funds, in term of their functioning, payment of premium and declaration of units in terms of NAV.


Whenever you are going for ULIPs, you should be well informed about ULIPs. ULIPs are most evolved investment avenues, and thus making well informed decisions is the key if you want to invest in ULIPs.
Read following tips which can be informative for your ULIP investments.


1. Understand ing ULIPsIn market there is a wide range of ULIPs available and which makes ot difficult for the investor to choose correct ULIP.Before investing in any ULIP try to get as much as information on ULIPs. Be aware of what product you are choosing for your investment.

Understand all the terms and conditions clearly before investing in ULIPs. You should try to gather information on ULIPs from various source of information including web, and print media information from Insurance companies.

2. Focus on your need and risk profileChoose a plan which focuses on your need and risk. Risk profile should be deciding factor in choosing a ULIP. Depending upon your risk profile you should go for ULIPs option which suits you better.

3. Comparing ULIPs from various companies:All the insurance companies offer many ULIPs, and ULIPs varies on parameters like expenses,premium payouts and performance etc. ULIPs work on premium payments as opposed to sum assured in the case of conventional insurance products.Before investing in any ULIP you should compare it on the basis if performance of ULIP. You should evaluate ULIPs on the basis of what's performance of debt, equity and balanced schemes and performance of various portfolios. Expenses play a major role in ULIP so an assessment on this parameter is also necessary.Make some enquire about the top-up facility offered by ULIPs i.e. additional lump sum investments which can be made to enhance the policy's savings portion. This way policyholders will be able to increase the premium amounts, thereby providing presenting an opportunity to gainfully invest any surplus funds available.

 4. Go for an experienced insurance advisorBefore doing any kind of major investments you should always select and financial advisor, who is having a through knowledge of insurance instruments. But make sure that the advisor who you are seeking is unbiased and independent; he should not be broker of some insurance company. You should also look for reviews of the financial advisor, from his previous clients and also check standards of his services.
It is very important that you should get a unbiased and independent advice on your ank kind of investments, so its always better to look for an advisor who asks for payments for his advice, because in that case, he will be working for your welfare not for the insurance company, whose products he will advice you. It is also very important that you should ask your advisor to provide you more services, rather than just filling and submitting the required forms.

Inflation on its northbound journey

After mellowing down in the month of November 2010 to 7.48%, the Wholesale Price Index (WPI) jumped to 8.43% in December 2010. This sudden spurt in the headline inflation was due to the upward trend in prices of certain food and non-food items.

As per the official WPI data, prices of prices of primary articles; food, non-food articles and minerals shot up by 16.46% on an annual basis. Manufactured goods too became expensive by 4.46% on an annual basis. Also, during the month of December 2010 fuel and power prices scaled up by 11.19%.

Considering the northbound journey of the headline inflation, the Prime Minister's Economic Advisory Council's (PMEAC) Chairman said that the WPI for the fiscal ending March 2011 may end up higher at 7.00%. Also now the Finance Secretary - Mr. Ashok Chawla too expects the WPI for the fiscal ending March 2011 to be at 6.5%.
PersonalFN.com View:

We believe that the headline inflation would still remain above the comfort levels of the RBI, and is expected to remain stiff as the impact of spiralling food and crude oil prices would start creeping in the headline WPI inflation. As an effect of this we may see RBI increasing policy rates by 25 basis points in third quarter review of monetary policy 2010-11 (scheduled on January 25, 2011), despite the drop in the Index of Industrial Production (IIP) to 2.7% (for the month of November 2010).

Your mutual fund investments at Risk!!

The recent multi-crore advertisement campaigns undertaken by some of the large mutual fund (MF) houses like HDFC Mutual Fund and Franklin Templeton Asset Management have raised several eyebrows on whether these companies are using investors' funds to boost their "brand equity".

Though these multi-crore ad campaigns are not illegal, they have raised ethical issues when the regulator - Securities & Exchange Board of India (SEBI) has been working to cut costs for investors, including banning of entry loads. And, it is noteworthy that all mutual fund schemes' advertisements go through the SEBI before going public.

Billboards and signs at traffic lights across Mumbai and Delhi that have sprung up display the companies prominently instead of individual funds, which normally is the case. One such advertisement reads - "choose a healthy investment-HDFC Mutual Fund SIP." The other - "Invest in Franklin Templeton Mutual Fund." At the bottom of the boards, one of their funds' name is written in a small font, the corpus from which possibly the cost of promotion is met.

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Financial News Simplified by PersonalFN