What is the mistakes you need to avoid when investing in mutual funds?

A mutual fund is an investment policy from a bank that gathers funds from various investors and puts in the money on behalf of these investors. Only a nominal processing fee is charged by the concerned bank to carry out the investment services.  This is a very efficient way of investing money by first timers who do not know the much about investing. This is a group effort where everyone participates by putting their money into purchasing of bonds, stocks or any other kind of securities.

Your share of the investment fund is symbolised by a ‘unit’. The units can be bought or redeemed at net asset value or NAV for short. The Net Asset Value is not constant, and the fluctuations are dependent on the fund’s holdings. So when there is either a loss or a gain, it affects all the investors equally and proportionately.

The Mistakes To Avoid:

• While investing in mutual funds India, there are certain mistakes that you should try and avoid, especially if you are a first-time investor. When you are investing, you should be aware of the risk profile by understanding the mutual fund scheme employed by the fund manager. Before investing it is advised that you should be aware of your financial situation and profile and then make the investment according to your profile and capabilities. Trying to get too influenced by other people’s investment stories whether successful or unsuccessful might not be s very good idea for you.

• A common mistake that investors end up making is timing the market situation. It is always better to aim for long-term investments of 5-7 years rather than short-term ones.

• Do not forget to review your investment portfolio from time to time. Not doing so can affect your profit or loss. Reviewing your portfolio will be a learning lesson for you and help you to better prepare for your next investment.

• A mutual fund scheme has several categories; read your prospectus thoroughly and try to get information about all these share classes. After you have done so, try to make the most of your mutual fund share classes. People end up making the mistake of not reading the prospectus due to time constraints, trusting blindly the words of the fund manager.

• Another mistake that investors make on their journey to mutual fund investment is ignoring the sales load. A ‘sales load’ also known as a ‘sales charge’ is of various kinds; front loads, deferred loads, back loads, etc. A sales load is basically the fee or commission that is paid to the fund manager who is handling your investment on your behalf. Read up on this aspect carefully before investing.

What can you get out of the gold loan?

Owning pieces of gold jewellery in India by families is very important as gold holds both emotional as well as religious sentiments. Gold is the symbol of the Goddess Lakshmi according to Indian mythology and is associated with wealth and prosperity.  The value of gold is very high and is given as presents at weddings, festivals, as birthday gifts, at anniversaries, or for any other occasion. Therefore, almost every household in India has some form of gold or the other.

Gold is considered as an asset in India and has many benefits associated with it. For example, gold can be pawned and can also be used against taking a loan. Opting for a gold loan is a quick and easy process and extremely beneficial too. Gold loans are secured loans where the gold is kept in a vault in the bank. However, in case the loan borrower fails to repay the debt amount then the bank can sell off the piece of jewellery.

The benefits of a gold loan are many; the processing time is less as compared to other loans because the bank has the alternative to sell of the gold ornament in case of default by the borrower. Gold loans are imbued with the special feature where the borrower has the choice of paying the principal amount at the end of closing the transaction and only paying the interest part. Gold loans have an interest rate of about 11-15% as opposed to unsecured loans which have a starting range of 15%, therefore applying for a gold loan will provide you with a lower rate of interest.

When applying for a gold loan, often there is no processing fee and no foreclosure fees as well. In case the borrower has a bad credit history, it is not held against the borrower when he/she tries to apply for the this loan. There is no question of income proof; the monthly income or expenditure of the borrower is not a factor for gold loan application.

As mentioned above some piece of gold jewellery or the other is owned by perhaps every family in India. Applying for a loan against your gold can be extremely beneficial in case of a dire medical, financial or educational emergency. It can be quickly availed of and has low interest rates as compared to personal loans. At the time of application you only need one authentic residential proof and one government sanctioned identification proof such as a passport, or PAN card, voter card, driving licence, passport or even a ration card.

Why term deposits make the ideal rainy day funds

A term deposit is an investment in cash held at a financial organization. You invest your money for a fixed interest rate over a fixed period of time, also called term. Term deposits may be invested in any financial institution like banks, union credits, etc. When you deposit the money, you are to understand that the money will be there for the agreed period. This period may range from 1 month to even 5 years. The interest rate is ensured not to change during that period of time. Normally, you can only withdraw this money on completion of the fixed term. If you withdraw it earlier, a percentage of it is to be paid as penalty to the institution.

Term deposit are preferred by investors who prefer security of capital and a fixed return as opposed to fluctuating investment options like the share market. Investors also use term deposits as a portion of their total investment in combination with other forms of investment. Term deposits are preferable when you have a planned expenditure up ahead in a fixed period of time. However, they may also be used as emergency funds in certain circumstances.

• Emergency funds are usually parked in savings account, from where money may be withdrawn easily. Term deposits allow withdrawal after the term is over, while a penalty has to be paid in case withdrawal is done earlier. In case of a long term deposit, the penalty is proportionately less, allowing you access to a substantial portion of your money even after paying the penalty.

• Some banks have a ‘sweep in’ facility, where you deposit money in a savings account, and when the total balance reaches over a certain amount, a fixed portion of it is transferred to a term deposit. If money is withdrawn, it is done by breaking the deposit. The advantage you get is that interest rate for a savings account is usually low, while interest rates for term deposits are high. So the money you get in return is high.

• Short-term deposits of one year serve best as rainy day funds as the money takes less time to mature but still increases in amount. The short period gives a better chance of you being able to withdraw the money without penalty in case of an emergency.

• Debt funds are short-term deposits that offer variable interest rates according to the market, but the term of deposit is very small. Also, withdrawal of money before the fund matures usually does not have a penalty.

Will your personal credit score affect your business loan application?

Many business owners require financial backing in order to start, expand the business or for business upkeep. Ready capital is extremely important when it comes to running a business.

A business loan may come quite handy for business owners who want a capital in hand to either buy more stock, expand the company or rent an office etc. But before applying for a business loan one should consider some factors that may affect their eligibility for such a loan.

Some of these factor include age of the borrower, type of business, the amount of loan that is required, the reason why one wants the loan and the most important is the borrower’s personal credit score.

While most people try to keep their personal life and work life balanced and separate, this becomes highly impossible for those who own small businesses. Now, when it comes to acquiring a business loan a number of banks do take the owner’s personal credit score into account. Thus, one does not only have to ensure that their business papers and balance sheet are on point, but also have to make sure that their personal credit score and history are made to the satisfaction of the bank.

What is a credit score and why does it matter?
A credit score is a number that is designated by a certain institution that examines and analysis one’s credit history. The higher the credit score, more are the chances of the lenders sanctioning a loan. A good credit score will make a borrower more eligible for a loan, while a bad credit score will make him less eligible.

Thus, when it comes to a business loan, especially a new business loan banks make sure to check the personal credit score of the business owner. One’s credit history and score directly reflect on their capability to return the amount along with interest. If a person cannot take care of their personal finances properly, it is assumed that they will not be able to take care of the business finances well.

Banks scrutinize the personal credit score of new business owners more carefully than old business owners, to ensure that they are creditworthy.

Individuals, who have a bad credit history are less likely to get approval for a business loan. Thus, it is extremely important that one checks his credit score and credit history before applying for a personal loan. If there are a few problems such as pending credit card bills etc. make sure that they are cleared before sending in the business loan application.

Is mobile banking the future of digital banking?

With the ever growing access to smart phones, more and more consumers are choosing to go mobile. Banking services have been made easier with the growing use of online banking. Mobile banking apps offer several advantages over the online banking system. Apart from completely changing the traditional banking scenario, mobile banking is fast becoming the new future of digital banking after online banking.

Here are some of the benefits you can enjoy through the mobile banking app today:

Manage banking better:

Traditional banking process requires you to go to the bank to make any transaction, even for something as simple as depositing or withdrawing money. ATMs made this easier, and online banking brought these activities right into the comfort of your home. However, with mobile banking, you have much easier access to your funds from anywhere and at any time. Just log into your account with your unique customer ID and password and make the required transaction. This takes away the need to be present near a computer.

Simple banking tasks:

For simple banking tasks like checking balances and transactions, you would have to go to the nearest ATM, or open your computer, log in and perform the task. This is tedious and time-consuming. However, with the mobile banking system, you can do this within seconds wherever you are. The mobile banking app is used to sign into your bank account, and you have direct access to your banking account history, transactions made, as well as the final balance, right at your fingertips.

Get real-time alerts:

The mobile banking apps are designed to track all the activity of your bank account. These include activities like funds in the account reaching a particular value or a certain amount of funds being withdrawn or deposited, etc. Since the app is directly linked to the account through the ever-present internet network, you can get instant alerts. Developers have designed the apps to provide real-time alerts for selected activities, allowing you to customize the alerts to your preference. As your mobile is portable and you can carry it around with you, you are instantly updated about your account wherever you are.

Greater security:

In order to access your bank account through mobile banking apps, you need to sign in with a unique customer ID and password, which you can change later. Keep your login details to yourself, and no other person can have to access your account. In the unfortunate event, you lose your mobile, your account will still be protected, as your personal information is password protected. At the same time, it is secured by other additional identity confirmations, like fingerprints, facial recognition, etc. Some devices and apps also have features with which you can remotely wipe out all your login details in such cases.

How to avoid these mistakes with the auto loan calculator

Innumerable banks and non-financial institutions offer car and auto loans today! While various types of auto loans are available in the market and can be easily availed, one should be careful when finalizing the terms and conditions of the loan.

Calculating the EMI of the auto loan, tenure, rate of interest and other technical details can be quite tricky for most individuals. In order to avoid calculation mistakes, one can take the help of an auto loan calculator.

An auto loan calculator is a calculating formula which allows one to play with numbers with just a few clicks. Here are a few mistakes that one can avoid with the help of the auto loan calculator-

• A number of individuals avoid making a fair comparison between various types of auto loans because they do not want to deal with the hassle of complicated calculations. This is a big mistake!
Comparing loan details and offers is extremely important so as to get the best deal in the market. An auto loan calculator allows an individual to make a fair comparison between various loan deals, the EMI, interest rate and overhead charges that will work the best for them.

• While some individuals definitely take out time and energy to make a comparison of various loan offers, calculation mistakes can lead to wrong decisions which are later regretted.

With the help of an auto loan calculator, one can definitely avoid calculation mistakes. All an individual needs to do is go online, locate a reliable car loan calculator, fill in the required spaces and hit the calculate button for prompt answers. Thus, an auto loan calculator has not only made calculation fast but 100% accurate as well.

With the help of an auto loan calculator, one can effectively negotiate the terms and conditions of the loan. The calculator often comes in handy when one wants to try out a combination of options to find out what works best form them.

In fact, the auto loan calculator is of great help when one wants to negotiate the rate of interest on a car loan. One can quickly calculate the EMI and tenure of the loan on the particular interest rates, and renegotiate with the lender on the spot.

Thus, it is very important that a borrower makes use of the auto loan calculator to avoid certain essential mistakes when availing a car loan. Make an effective comparison and be careful to negotiate the loan terms and condition, keeping in mind that the interest rate and overhead charges are fairly incorporated.

Why do more women need to buy health insurance?

An individual’s health insurance should essentially be formulated as per specific needs. Thus, it should be tailor-made depending on a person’s finances and the health issues that he is likely to suffer from. This is primarily why men and women should have separate health insurances.

Recent studies have revealed that about 80% of the women in the country do not have their own health insurance, even though they are financially independent. But one has to realize that a medical emergency or a chronic illness does not really announce itself before it arrives. Medical treatment today can really drain out one’s hard earned money. Therefore it is important that both men, as well as women, apply for medical insurance.

Here are a few reasons why women generally do not get themselves covered by medical insurance-

1. financial dependence
Most of the women in India are well educated and literate. In fact, they may be earning a good sum of money as well. But women in the country even today generally depend on their spouses or a male member to take decisions that concern budgeting and finance.

While prior to getting married it is their father, after marriage it is generally the husband making money-related decisions.

2. No awareness
In India, health insurance is not given much importance because many people are yet not aware about the perks of being insured.

3. No employment, no insurance
In India, the only insurance people seek are group covers which are generally offered by corporate or public sector employers. While women who work do enjoy the benefits of this type of insurance a majority either work from home or are full-time wives or mothers, without an insurance plan.

Here are a few reasons why women should opt for a health insurance-

• Their lifestyle is comparatively more sedentary.
• Women are more susceptible to critical diseases like breast cancer, diseases of the heart or osteoporosis.
• Most health insurance companies also offer maternity benefit as a part of the plan. This may come in handy in case a C-section is needed at the time of birth.
• Accidents are also covered by a health insurance plan.

Opting for a health insurance does not only offer a person medical security, but a chance to make a positive investment- an investment towards one’s well-being. Moreover, it is also a great way to save taxes, as medical insurance generally provides a number of tax benefits to an individual. 

Choose a reliable insurance company offering and effective health insurance plan for women today!