Tuesday, December 20, 2011

How to make change in address details in mutual fund investment???






Since KYC is now mandatory for all the investments irrespective of the amount the investor needs to submit the Change of Address details request to PoS of CVL using KYC Change detail form.


 For mutual funds, you will have to update your know-your-customer (KYC) document. You can intimate your change of address to any convenient point of sale. You will have to quote your permanent account number (PAN) and submit it with an address proof. It will take at least 10 days for the change of address to be effective with all the mutual funds with whom you are invested. You don’t need to write directly to the mutual fund or its registrar for the change of address. The specified form can be obtained from the Association of Mutual Funds in India, mutual fund houses and Central Depository Services (India) Ltd’s (CDSL) website. All details of the holders in the mutual fund records will be replaced by the address details available in the CDSL Ventures Ltd record.

 
  






Once the address details are updated at CVL, the same will be automatically updated in AMC database.





How to change or update bank details in mutual fund investment??



  • Request letter (preferably in our standard format or as near thereto as possible) signed by all the unit holder(s) according to the mode of operation.
  • Cancelled original cheque of the new bank account.

In respect of the existing (old) bank account, any one of the following documents:
  • Cancelled original cheque of the old bank account (bearing account number and first unit holder name printed on the face of the cheque).
  • In case such bank account is already closed, a duly stamped original letter from the banker on the letter head of such bank, confirming the closure of such account.

  • Original bank account statement. A true copy of the old Bank Account Statement can also be submitted if the original bank account statement is brought to the Designated Investor Service Centre ("DISC")  for physical verification, in which case the original bank account statement will be returned across the counter after due verification.
  • A true copy of the old Bank Pass book. However, the original bank passbook should be brought to the DISC  for physical verification, which shall be returned across the counter, after due verification.
  •  Only for genuine cases, after due verification of the Investor: In case the bank account details mentioned in the original application form were erroneously mentioned of a non-existent bank account, then an undertaking in the standard format.

Dividend in Templeton India Pension Plan



Franklin Templeton Mutual Fund has announced declaration of dividend under the dividend option of Templeton India Pension Plan. The quantum of dividend will be Rs.1.25 per unit.

The record date has been fixed as December 23, 2011.

Sunday, December 18, 2011

How can one exit from New Pension System (NPS)



If a subscriber wishes to exit from NPS before attaining the age of 60, he/she can withdraw upto 20% of the sum accumulated till that point of time. The subscriber has to buy annuity with the rest of the money.
The commencement of the annuity depends on the annuity plan / scheme offered by the ASPs. If minimum contributions are not made as stipulated, the account will be frozen and can be reactivated only by paying the penalty.

If a subscriber dies before attaining the age of 60, the entire sum goes to the nominee. The beneficiary submits a withdrawal request to the associated POPSP who will enter the request in the CRA system. After the request is processed, a cheque is issued favouring the beneficiary and forwarded to the associated POP.

How to apply for the NPS scheme launched by the government?



You will need to visit a point of presence (PoP), fill up the prescribed form with the required documents. Once you are registered, the Central Record keeping Agency (CRA) will send you a Permanent Retirement Account Number (PRAN), along with telephone and internet passwords.

 Submit the Subscriber registration Form with KYC documents (as mentioned in the Form) and the NPS Contribution Instruction Slip (NCIS) and minimum contribution amount to any of our authorized branch, an Initial contribution amount of Rs.500/-. The subscription Form and Contribution Slip will be available at the branches. The same can also be downloaded from http://pfrda.org.in/.

   


What is the procedure for registration of Subscribers in the CRA system?

Any Individual who wants to get registered as a subscriber and wants to open a Permanent Retirement Account (PRA)(Tier I and/or Tier II) in NPS would submit the duly filled form (Composite application form for subscriber registration) with other supporting KYC documents to POP-SP. For only Tier II account, an individual with an active Tier I account needs to approach the associated POP-SP and submit a copy of the PRAN Card along with Tier II activation form (UOS-S10).



PRAN Card is despatched to the registered address within 20 days from the day of receipt of duly filled registration form at the CRA-FC office. During this period, a subscriber can go to https://cra-nsdl.com/CRA/ and check the status of PRAN kit in CRA website https://cra-nsdl.com/CRA/ using the 17 digit receipt number provided by POP-SP. The subscriber can also contact his / her associated POP-SP. In case the application form is not filled with all the required details, CRA-FC will not accept the registration form. CRA-FC will intimate subscribers POP - SP regarding rejection of forms.


The salient features of the New Pension System (NPS) are as follows : 


  • It is a pension system for the non-Government sector.
  • It is open to anyone from 18 years to 60 years of age, including NRIs.
  • The minimum contribution is Rs. 6,000 per year, at Rs. 500 per transaction.
  • There should be a minimum of one transactions per year.
  •  There is no maximum contribution.
  • A subscriber must compulsorily select a pension fund manager (PFM). 


Subscriber has the option of chosing any one of following entities appointed by PFRDA to manage the investment:

  • ICICI Prudential Pension Funds Management Company Limited
  • IDFC Pension Fund Management Company Limited
  • Kotak Mahindra Pension Fund Limited
  • Reliance Capital Pension Fund Limited
  • SBI Pension Funds Private Limited
  • UTI Retirement Solutions Limited

  • Under NPS, two types of accounts are available to the subscriber- Tier I and Tier II. The contributions in Tier I account are savings for retirement and are non-withdrawable. Tier II account is a voluntary saving account. 
  •  The PRAN holder can contribute to his/her PRAN a/c through any of our designated Branch.





The Benefits to the subscribers under NPS

 What are the tax benefits of NPS?

At present, the investment is covered under section 80CCD of the Income Tax Act and a tax will be levied if you withdraw the money. You can avoid paying tax by transferring the entire corpus to the annuity service provider. 
 
The tax treatment for contribution in Tier I account is EET, "Exempted-Exempted-Taxed" i.e., the amount contributed is entitled for deduction from gross total income upto Rs. 1.00 lac (along with other prescribed investments) as per section 80C (as per the provisions of the Income Tax Act, 1961 as amended from time to time). The appreciation accrued on the contribution and the amount used by the subscriber to buy the annuity are not taxable, Only the amount withdrawn by the subscriber after the age of 60 is taxable.

How can NRIs keep track of their investments?




NRIs are urged to register their e-mail IDs while making a purchase.

This would entitle them to a host of online services and facilities offered through www.camsonline.com.

NRIs can get consolidated account statements, portfolio valuation statements and a lot more.

Power of Attorney (PoA) to invest on behalf of the NRI investor?


Yes. A Power of Attorney (PoA) has the authority to invest on behalf of an NRI and sign documents for first and additional purchases, as well as redemptions. While subscribing for units the PoA holder should submit the original PoA, or a duly notarised copy of the same. The same will be registered in the folio.

Can NRIs invest on a repatriable basis?




To invest on a repatriable basis, the amount representing the investment should be received by inward remittance through normal banking channels (cheque or rupee-denominated demand draft, if it is from an overseas account) or by cheque drawn on or debited to an NRE/FCNR account of the non-resident investor.

Redemption proceeds/dividends will be credited to the NRE bank account or paid out by cheque in Indian rupees.

The redemption proceeds and/or dividend can be repatriated in full.

How can an NRI redeem investments?



The redemption proceeds get processed in the normal course by the investor submitting the redemption request form.

The redemption proceeds will be paid by cheque or credited to the first unit-holder's account.

Where the purchase of units is made on a non-repatriable basis, the maturity proceeds/repurchase price of units (after payment of taxes) will not qualify for repatriation and may be credited to the NRO account.

Saturday, December 17, 2011

Guidelines for investing in Mutual Funds by an NRI.



Please explain the guidelines for investing in Mutual Funds by an NRI. 

For an NRI to invest, it is mandatory that he/she maintains a bank account in India.

NRIs can invest in Indian mutual funds through their NRE/NRO/FCNR accounts.

The investment has to be made only in Indian rupees. The NRI may also send a rupee cheque from abroad, payable at a bank in India. The ‘investor status' in the form should be marked as ‘NRI' and the bank details of the NRE/NRO account have to be mandatorily provided.

For an NRI to invest, it is mandatory that he/she maintains a bank account in India. AMCs do not accept an NRI application with an overseas bank account detail. NRIs should be KYC-compliant to invest in mutual funds. 



AMFI Circular dated October 14, 2011 on Non-renewal & Suspension of Brokerage of Payment ...



The Association of Mutual Funds in India (AMFI) released unified guidelines for AMFI Registered Mutual Fund Advisor (ARMFA) on October 14, 2011.
This has reference to  circular no. CIR/ ARN-09/ 08-09 dated July 18, 2008 on the following subject


1. Clarification/ Modification in Declaration of Self Certification, (Clause no. 5.6)

2.  Suspension of Payment of Commission (Clause No. 6.3 a and b)


 As per the circular  CIR/ ARN-13/11-12 dated October 14, 2011
 
Suspension of Payment of Commission;

a) On non-renewal of ARN:

The payment of commission on business procured by Agent/Distributor after expiry of validity period of ARN to be suspended and the same can be released only on receiving intimation/status about renewal of ARN from AMFI.

ARN Holder has been given Six Months' time for renewal of ARN. In case, ARN is renewed after Six Months of expiry date, ARN holder will not be entitled for commission/trail commission on business mobilised during the period when ARN is invalid i.e. from the date of expiry of ARN till the date of renewal of ARN. Information regarding invalid ARN and its subsequent renewal will be sent to the AMCs by AMFI.

The following example narrates the action required to be taken by the AMCs under various circumstances as mentioned above :



 b) On non-compliance of Annual Certification requirement:

AMFI has already issued guidelines for obtaining self-certification from Agent/Distributors on Annual basis. It is recommended that in case ARN holder fails to comply with the requirements of the annual certification, the payment of commission be suspended till the time ARN holder complies with the requirements of the Annual Certification.


Source:Amfiindia



Wednesday, December 14, 2011

Monday, December 5, 2011

BSE in Collaboration with Morningstar Launches Mutual-Funds Website


BSE Ltd. (formerly Bombay Stock Exchange Ltd.), Asia’s oldest stock exchange, in collaboration with Morningstar India, launched a dedicated website to empower investors with relevant information and tools on evaluating mutual fund investment opportunities.

According to Morningstar India, the website would provide rich content to the users and would make available our proprietary data points, including our style box, star ratings and analyst ratings


BSE StAR MF is the leading stock exchange's traded mutual fund transaction platform and allows subscription and redemption in 29 MFs. These mutual funds together account for over 92 per cent of the industry's Assets Under Management.


The URL of the website is:
http://bseindia.morningstar.in

How to Change your name in your PayPal account


Changing your name in your PayPal account

Please make sure that the name associated with your PayPal account exactly matches the name on your bank account statement. Otherwise, transfers to and from your PayPal account will not go through, and a return fee will be charged.

Personal and Premier account holders

Contact Customer Service if you need to change the name we have on file for you. Click Help on any PayPal page and select Contact Us.You may make this change for reasons such as a legal name change, a spelling mistake, or to add a secondary last name. For security reasons, you will need to provide supporting information. It’s not possible to put your bank account in another person’s name.

Business account holders

If your bank account is in your own name, you’ll need to switch to a PayPal Premier account to make transfers. The only difference between a Business and Premier account is that with a Business account you make transactions using a company or group name, and with a Premier account you make transactions using your own name. Please contact Customer Service to switch to a Premier account or to change the contact name for your business account. Click Help on any PayPal page and select Contact Us.

Friday, December 2, 2011

No nomination in PPF will result in paying only one lakh irrespective of amount you have in your PPF account???


what happens to a PPF account in event of the depositor's death? If a PPF account holder dies and there is no nomination, who gets the deposited amount?


 Nomination is very important in PPF. If you have Rs 10 lakh in your public provident fund (PPF) account and you have not nominated anyone for your PPF account, your legal heirs will get maximum of Rs1 lakh only! Yes, it’s so important to have a nominee.
 If the amount is up to Rs. 1 lakh, the accounts office will pay it to the legal heirs of the deceased on receipt of application in prescribed form.


PPF Rule related to Nomination & repayment after death of subscriber



(1) subscriber to the fund may nominate in Form E or, as near thereto as possible, one or more persons to receive the amount stading to his credit in the event of his death before the amount has become payable or, having become payable , has not been paid.


Note:- Nomination may also be made in respect of an account opened on behalf of a Hindu Undivided Family (HUF).


(2) No Nomination shall be made in respect of an account opened on behalf of minor.

(3) A nomination made by a subscriber may be cancelled or varied by a fresh nomination in Form F or , as near thereto as possible by giving notice in writing to the Accounts Office in which the account stands.

(4) Every nomination and every cancellation or variation thereof shall be registered in the Accounts Office and shall be effective from the date of such registration, the particulars of which shall be entered in the pass
book.

(5) If any nominee is a minor, the subscriber may appoint any person to receive the amount due under the account in the event of the death of the subscriber during the minority of the nominee.



(6) Notwithstanding the provisions contained in paragraph 9- which says





a. If a subscriber to an account in espect of which a nomination is
in force dies, the nominee or nominees may make an application in Form G or, as near thereto as possible, to the Accounts Office together with proof of death of the subscriber and on receipt of such application all amounts standing to the credit of the subscriber after making adjustment, if any, in respect of interest on loans taken by the subscriber shall be repaid by the Accounts Office itself to the nominee or nominees. Provided that if any nominee is dead, the surviving nominee or nominees shall, in addition to the proof of death of the subscriber, also furnish proof of the death of the deceased nominee.


b. Where there is no nomination in force at the time of death of the subscriber, the amount standing to the credit of the deceased  after making adjustment, if any, in respect of interest on loans taken by the subscriber, shall be repaid by the Accounts Office to the legal heirs of the deceased on receipt of application in Form G in this behalf from them.


Provided that the balance up to Rs. 1 lakh may be paid to the legal heirs on production of (i) a letter of indemnity, (ii) an affidavit, (iii) a letter of disclaimer on affidavit, and (iv) a certificate of death of subscriber, on stamped paper, in the forms as in Annexure to Form G.


(7) A subscriber to the Fund cannot nominee a trust as his nominee.


Thursday, December 1, 2011

Deduction under section 80CCF

Section 80CCF: Infrastructure Bonds – (maximum Limit Rs. 20,000) 


Budget 2010 has introduced one more avenue for you to save tax – Infrastructure Bonds

An investment upto a maximum of Rs. 20,000 in infrastructure bonds would be deductible from your taxable income. Thus, your taxable income would reduce by the investment you make in these infrastructure bonds, subject to an upper limit or ceiling of Rs. 20,000.

In accordance with Section 80CCF of the Income Tax Act, the amount, not exceeding Rs. 20,000 per annum, paid or deposited as subscription to Long Term Infrastructure Bonds during the previous year relevant to the assessment year beginning April 01, 2011 shall be deducted in computing the taxable income of a Resident Individual or HUF.

Please remember that the deduction with the investment in these Bonds is over and above the tax deduction of Rs. 1,00,000 available under Section 80C, 80CCC and 80CCD read with Section 80CCE.

The budget did not specify the exact bonds that qualify for investment under section 80 CCF – these would be notified by the government from time to time.

However, infrastructure bonds issued by both public sector / state owned companies as well as private sector companies would qualify for investment under this section. This is unlike the past trend – till now, only government entities were allowed to issue infrastructure bonds.

The money raised through these bonds would be primarily invested in infrastructure projects – building of roads, ports, airports, power plants, etc. These investments are of long term duration, and therefore, these bonds too are expected to have long tenures – 10 years or more.

Wednesday, November 30, 2011

NRI - TDS on redemption of Mutual Funds??



Will TDS be deducted on the redemption of units? If yes what will be the basis of deduction of TDS.



 i) Resident Investors TDS is not deducted on the sale proceeds for Resident Indians. As per Central Board of Direct Taxes (CBDT) Circular No.715 dated 8th August 1995, in case of resident unit holders, no tax is required to be deducted from capital gains arising at the time of redemption of the units.

ii) Non-Resident Investors
In case of NRI's, TDS will be deducted on the sale proceeds. The TDS will deducted depending upon whether it is a short-term capital gain or long term capital gains.

TDS For Equity Funds for NRI

Long-Term Capital Gains on Equity Funds :
No tax is deductible from the proceeds payable to non-resident investors from long-term capital gains arising out of redemption of units of an equity-oriented fund.

Short-Term Capital Gains on Equity Fund
s As per Part II of the First Schedule to the Finance Bill 2010 {Clause 1 (b) (i) (C)}, the mutual fund is liable to deduct tax at 15% on short-term capital gains. The TDS is to be increased by applicable surcharge.
Illustration: 
TDS rate for Short Term = 15% (A)
Surcharge = A x10% = 1.5% (B)
Education Cess = A + B x 3% = 0.495% (C)
TDS to be deducted = A + B + C = 16.99%

TDS  For Non Equity Funds (Debt, Gold ETF fund) for NRI


Long-Term Capital Gains 
TDS rate = 20% with indexation benefit. (A)
Surcharge = A x 10% = 2% (B)
Education Cess = A + B x 3% = 0.66% (C)
TDS to be deducted = A + B + C = 22.66%

Short-Term Capital Gains


TDS rate = 30% (A)
Surcharge = A x 10% = 3% (B)
Education Cess = A + B x 3% = 0.99% (C)
TDS to be deducted = A + B + C = 33.99%

NFO Launch : Kotak FMP Series 68



The New Fund Offer of the scheme opens on December 05, 2011 (Monday) and closes on December 07, 2011 (Wednesday).


MINIMUM INVESTMENT during NFO:
Rs. 5,000/- and in multiples of Rs 10 for purchase and switch-ins.


OPTIONS:
Growth and Dividend Payout.


INVESTMENT OBJECTIVE:
The investment objective of the Scheme is to generate returns through investments in debt and money market instruments with a view to significantly reduce the interest rate risk. The Scheme will invest in debt and money market securities, maturing on or before maturity of the scheme.


LISTING:
The units of the scheme will be listed on BSE on allotment. The units of the scheme may also be listed on the other stock exchanges.


BENCHMARK:CRISIL Short Term Bond Index.


LIQUIDITY:
Units of this scheme will be listed on Bombay Stock Exchange. Investors may sell their units in the stock exchange(s) on which these units are listed on all the trading days of the stock exchange. The units cannot be redeemed with KMMF until the maturity of the scheme.


MATURITY:
370 Days after the date of allotment of units.



COLLECTION CENTRE
Purchase : At KMAMC Authorized Collection Centre’s indicated on the back cover of the SID.

Switch :
At KMAMC Authorized Collection Centre’s, CAMS Investor Service Centre’s & CAMS Transaction Points indicated on the back cover of the SID.



For any investor related queries, request you to please call on our toll free number- 1800 222 626 / 66384400 or write at mutual@kotak.com. For any distributor queries, please feel free to contact your relationship manager or write back to us at advisorhelp@kotak.com.

e-safe facility for icici direct customers..


What is eSafe?
eSafe helps you with the convenience and flexibility to store and retrieve your important documents when you need them. You can store scanned copies of your Passport, PAN, Agreements or even medical reports securely under your ICICI direct account account.

eSafe helps eliminate your need to carry copies of your important documents either as a physical photo copy or in storage devices like Compact Disks, USB token etc.


With eSafe, you can store documents in one central secure location and know that your documents are just a few clicks away.

Esafe facility will offer 25 MB free online space to each of its customers for storing their documents. ICICIdirect eSafe can also be utilized to store scanned copies of passport, permanent account number (PAN), important agreements, medical reports and more such documents.

Key Benefits:

  • Secure and Accessible - Your eSafe ensures that your documents are secure and accessible only via a secure login.
  • Anywhere, anytime access - Your eSafe is available to you from anywhere, via an Internet connection under your ICICI direct account login.
  • Durability and Longevity - Storage of documents in CD's or other portable media is prone to handling them with care, your eSafe lets you store your documents online, which ensures durability and longevity.
  • No storage or retrieval hassles - Since your documents are stored in a digital format under your ICICIdirect account, the account is available to you wherever you go.
Source: icici direct.com

How to go ahead with PayPal for Indian PayPal Users!



I am getting lot of queries related to PayPal as how to go ahead with PayPal. Here are some terms which help you to understand paypal in better way..


1. What is Paypal?
If you're new to PayPal, you've come to the right place.PayPal is an American-based global e-commerce business allowing payments and money transfers to be made through the Internet. PayPal is a service that enables you to pay, send money, and accept payments without revealing your financial information. PayPal encrypts your sensitive financial information so the only person who can see it is you. PayPal enables global ecommerce by making payments possible across different locations, currencies, and languages.
Example: You are from India, and working online in different websites,(you earn in different currencies like dollar, euro, pound,  so you get paid money in PayPal and then after you can easily transfer that money from paypal to your Indian bank account.


2. Please Explain process for opening PayPal account for Indian PayPal users?? What things are required to open paypal account?
In order to create paypal account you need to click the link to sign up 
or visit https://www.paypal.com and click the link for sign up.

After that you need to select type of paypal account which suits you the most. PayPal offers three types of accounts for Indian PayPal users:

1. Personal account is for online shoppers to make the payments or even you can able to receive funds in PayPal, for the beginners its good to start with PayPal personal account.   Recommended for individuals who shop and pay online, or wish to send or receive personal payments for shared expenses such as splitting of dinner bills or rental charges.

2. Premier PayPal account is for casual sellers who occasionally buy online.

3. PayPal Business account is for merchants with a company or group name and high transaction volumesRecommended for merchants who operate under a company/group name. It offers additional features such as allowing up to 200 employees limited access to your account and customer service email alias for customer issues to be routed for faster follow-ups.

You can upgrade any time, so don't worry if selected Personal account when started (created) your paypal account.

How to upgrade:
Here's how to upgrade to a Premier or Business account:
  1. Log in to your PayPal account.
  2. Click Upgrade Account in the Enhance Your Account box.
  3. Click Upgrade Now.
  4. Choose Business or Premier account.
  5. Click Continue.
  6. For a Business account, fill in your business information and click Continue.

What is required for Indian PayPal users for creating PayPal Account:
1. Email account
2. Pan number details
3. Bank account
4. Mobile Number
5. Your complete address

Please make sure when creating account add the correct details and not give wrong details as it will create problem in future if you created account with wrong details.

The name registered on your PayPal account must match the name registered on your bank account. Each time you make a transfer request, PayPal automatically includes your registered name with your bank information.

For PayPal customers who have a Business account, the Business name is automatically matched with the bank information added to the account.


About Email address
Your email address registered in PayPal is your login detail as well as the important as when receiving or sending money,  you use that email address.
PayPal allow to add up to eight email addresses in your PayPal account.

About Pan number details
PAN or permanent account number refers to a 10-digit alphanumeric combination issued in the form of a laminated card, by the Income Tax Department in India. You can find the 10-digit number printed at the front of your card.
PAN is compulsory for all financial transactions in accordance with Indian laws and regulations.
You need to have a PAN (made mandatory by the Income Tax Department) in order to file for return of income as well as on all correspondence with any income tax authority in the country.
To apply for a PAN card all you need to do is submit the application form number 49 A to the Indian Revenue authorities.
To download PAN application forms or to learn more, visit http://india.gov.in/outerwin.php?id=https://tin.tin.nsdl.com/pan/form49A.html.

About Bank account Number:
You shall have or open a functional bank account. After registering for the PayPal Service, you shall have to provide "Your Information" as contemplated under this Agreement and any other information including but not limited to your bank account number and the relevant Indian Financial Systems Code which may be required by PayPal in order to verify and authenticate your bank account and activate the PayPal Service. 

What are the fees for PayPal accounts?

Opening an account:
PayPal doesn't charge a fee to open a PayPal account.

* If foreign exchange or currency conversion is required to complete any transaction, this will be performed by a licensed financial institution. The foreign exchange rate is adjusted periodically on a daily basis to reflect market conditions and includes a 2.5% processing fee which is retained by PayPal. The exact exchange rate that applies to your transaction will be displayed to you at the time of the transaction.

How to Verify a PayPal Account 
Log into PayPal and go to the "Overview" page of your account.

Click on the link under your name labeled "Get Verified."


Choose the method you wish to use to verify your account.

PayPal currently offers two options for verification:With Bank details

With credit card

Add bank details, click the link to verify your PayPal account, paypal will send two small amounts in your bank account, check those details by visiting your bank account and confirm the same in paypal to get the account verified.



Provide a valid credit card in your name.Enter the required credit information and then click "Continue. Verify that you have entered all information correctly and then click the "Confirm" button. Submit the form after the final verification page loads, then check your email for additional information from PayPal.Monitor your credit account that you are using for the verification process. Two small charges will be placed on your credit card if that is your chosen verification method.


Log into your PayPal account to report the deposits or charges after they appear on your statement.

Go the "Get Verified" link again and enter the deposits that were made into your account.

Alternately, enter the charges on your credit card at the website along with the codes printed next to them on your statement.


PayPal will credit your account back for the charges made.


Your account is automatically verified after entering credit card charges.

Saturday, November 26, 2011

Types of risks associated with Mutual Fund Investment!!



Risk is an inherent aspect of every form of investment. For Mutual Fund investments, risks would include variability, or period-by-period fluctuations in total return.

Market risk: At times the prices or yields of all the securities in a particular market rise or fall due to broad outside influences. This change in price is due to 'market risk'.

Inflation risk: Sometimes referred to as 'loss of purchasing power'. Whenever the rate of inflation exceeds the earnings on your investment, you run the risk that you'll actually be able to buy less, not more.

Credit risk: In short, how stable is the company or entity to which you lend your money when you invest? How certain are you that it will be able to pay the interest you are promised, or repay your principal when the investment matures?

Interest rate risk: Interest rate movements in the Indian debt markets can be volatile leading to the possibility of large price movements up or down in debt and money market securities and thereby to possibly large movements in the NAV.

Other risks associated are:
  • Investment risks 
  • Liquidity risk 
  • Changes in the government policy

PPF will get higher rate of return from December 1, 2011


PPF account holders will get higher rate of return from December 1, 2011. The government today notified increase in interest rates on public provident fund (PPF) to 8.6 per cent from 8 per cent now, and also raised ceiling on annual contributions to the fund to Rs one lakh from Rs 70,000.
Other changes in Small Savings Schemes and Kisan Vikas Patra (KVP)

1. Interest rates on Post office deposits would also see a rise in interest rates from 3.5% to 4%.

2. The sale of Kisan Vikas Patras (KVP) will be discontinued from November 30, 2011.

3. Monthly income schemes will earn an interest of 8.2 per cent, but accounts opened on or after December 1 will not be entitled for bonus.

4. Monthly income schemes (MIS) would see a reduced period of maturity from 6 to 5 years



Friday, November 25, 2011

Dematerialization of Mutual Fund Units!!






Dematerialization of Mutual Fund Units means holding mutual fund units in demat form. SEBI now allowed mutual fund investments to be held in dematerialized form. It means that investors will have the option to convert their existing mutual fund investments into dematerialized form and buy/sell units through stock exchanges.

Investors desirous of receiving the allotment of units in dematerialized (“demat”) form under various options of the Scheme(s)/Plan(s) offered by the Fund will now have an option in the subscription form to provide their demat account details. Currently, the option to subscribe/hold units in demat mode is not available under the Daily/Weekly/Fortnightly Dividend Option(s) and for Systematic Investment Plan (SIP) transactions.

A demat account for mutual funds will be similar to the one for shares. You can subscribe to mutual fund units through your stock broker using the stock exchange platform. On subscription, the asset management company (AMC) or Registrar and Transfer Agent (RTA) will credit the mutual fund units to your demat account.


For existing mutual fund holdings, you have to obtain a conversion request form from your Depository Participant (DP). After verification , the AMC or RTA will credit the mutual fund units into your demat account. It enables you to subscribe to mutual funds units through a stock broker, using the stock exchange platform.


It is to be noted that the demat holding will entail a charge. It may either be a flat fee based on a time period or may be linked to the Assets Under Management (AUM). The brokerage and demat transaction fees could vary with the broking firm, depository and DP. This apart, while trading in equity mutual funds through exchanges, you will have to pay the securities transaction tax (STT) as well.

Thursday, November 24, 2011

IDFC MF launches Fixed Maturity Plans
















IDFC Mutual Fund launches two Fixed Maturity Plans IDFC FMP Yearly Series 56 and IDFC FMP 2 Year Series 2.

Details:
IDFC FMP 2 Year Series 2










IDFC FMP Yearly Series 56 





What is the procedure to REDEEM / REPURCHASE Mutual Fund Units?



If the fund is open ended, the investor has to send the repurchase(redemption) requisition slip, duly completed and signed, to mutual fund or register (cams or karvy after checking which accept redemption of particular AMC(mutual fund). It is possible to lodge repurchase requests on the Internet also. The redemption can be done for all units, partial units, or for an amount.

Redemption proceeds can be either be directly credited to the investors account OR cheques are issued with the investors bank details printed on them mandatorily. This is to prevent fraudulent encashment of repurchase cheques.

Forms






Forms:

Common Transaction Slip of Mutual Funds For  Redemption:  **Click image to enlarge

 In Karvy mfs website, we have option to create transaction slip by adding our investment detail.
Visit  
https://www.karvymfs.com/karvy/Investorservices/General/transactiondetails.aspx  
 add details and Generate Transaction Slip 

Know your Credit Score Online by paying Rs. 450


Credit Information Bureau India Limited (Cibil) will now provide customers their credit reports and scores online. Individuals can now access these through a three-step process.

In the first step, customers would have to fill an online form,  with personal details like name, licence number and contact details. The second step would involve a payment of Rs 450, by way of debit, credit cards, net banking or cash cards.

The third step would involve authentication and this would pose five system-generated questions. To prove their authenticity, customers would have to answer at least three questions. The questions would be objective, and would also carry a few options. The questions would be very personal, and can be answered only by real customers. In case the customer fails to answer three questions correctly, he/she would have to go through the normal procedure of sending the hard copy of the documents to complete the know-your-client procedure.

The main advantage of obtaining the report from Cibil is that borrowers can find out in advance how good their score is. If the overall score is low the borrower can strive to improve his profile by paying all future dues on time and bringing down his overall borrowing. Also borrowers can take corrective action if there has been misrepresentation by lenders.

FAQ related to Mutual Fund Consolidated Account Statement!!!



Consolidated Account Statement is a single account statement that consolidates financial transactions in all folios of an investor across all schemes of all mutual funds.

The first CAS statement shall be issued by November 10th, 2011 covering transactions processed in October 2011.


FAQ related to CAS(Consolidated Account Statement)

Why is Consolidated Account statement (CAS) being issued now?
Consolidated Account Statement (CAS) is being issued consequent to amendment in SEBI Regulations and introduction of sub-regulation (4) under regulation 36, which interalia states
that.." the asset management company shall ensure that consolidated account statement for each calendar month is issued, on or before tenth day of succeeding month, detailing all the transactions and holding at the end of the month including transaction charges paid to the distributor, across all schemes of all mutual funds, to all the investors in whose folios transaction has taken place during that month.”


What will be the basis for consolidation of folios to be considered for CAS?
A PAN is considered valid if the PAN details are matched with income tax website or KYC is completed by CVL. So only those folios that have valid PANs for all the holders (including joint holders)and also the order of all joint holders is similar will be consolidated while issuing a consolidated account statement.



What happens if there are no financial transactions in a particular folio for the month?
CAS will include only the folios with financial transactions and hence these folios will not reflect in the statement.


What details of the investor will not be provided in CAS?
Apart from non financial transactions, sensitive information like registered bank account details, PAN and contact numbers will not be included in CAS. Mobile number will be provided however will be masked to maintain for confidentiality and privacy.


What will be the frequency of CAS?
CAS will be sent on or before the 10th calendar day of the following month for folios which have been transacted in the previous month. Currently CAS will be sent only via physical and not electronic mode.


How will CAS be sent? Will it be sent via email?
Currently CAS will be sent by regular post, even if an email id is registered in any or all folios. After few months, CAS may be sent via email using any of the email id registered in any of the folios.
Hence, strongly advise investors to verify their email ids (registered in each folio and also printed in CAS against each folio) and update a single email id across all folios.


Will the investor get any individual statement from the AMC?
Yes. Folios with email id will continue to get regular fund specific account statements electronically after each financial transaction within 5 working days. Folios with no email id will get a monthly CAS.


What if some of the folios are not reflected in monthly CAS? Will the investor get any individual statement from the AMC?
If investors find some of their folios are not reflected in CAS, they should check the following and act appropriately
a. Whether the folio has any financial transaction, as CAS includes only the folios with financial transactions?
b. If yes, whether the PAN of all the unit holders has been updated in the folio?
c. If no, they should get PAN of all the unit holders updated in the folio/s for future inclusion in CAS.
d. If PAN is already updated, investor should check with respective mutual fund or the registrar about the discrepancy.



In case of any discrepancy in folios related details in CAS, what should the investor do?
Investor should approach respective mutual fund or the registrar in case of any discrepancy in financial transactions, folio details printed in CAS or for any other queries.

Source: Amfi India

Wednesday, November 23, 2011

Gold Investment options in India!


Gold is the oldest currency in the world and is coveted across continents and cultures for a variety of reasons and is a remarkable hedge against inflation and hence tends to retain the purchasing power across time. It takes care of the 'preservation' part of any portfolio. Gold has been making waves since S&P downgraded credit rating of the United States from AAA to AA+.  As all other investment options are in deep stress, gold is attracting fresh investors, pushing the prices to new high, people are looking for gold for investment, however, buying gold in physical form like jewelery is a big problem due to impurity and resale value issues.
Experts suggest that at least 10% of your investible portfolio should be in gold. As it happens, for many Indian families gold often represents a large percentage of the family assets, given the socio-economic and cultural factors in play. Whatever be the reasons, an investment in gold is worth considering.

Here are some of methods which can be considered for investing in Gold.

1. Gold ETF 
The Gold Exchange Traded Funds is one of the best option to consider for investment in gold, for investors who want to invest in gold but without storing them. To start investing in Gold ETF all you need is "Demat Account". Your gold remains safe and you don’t have to go to the market to sell it. Gold ETFs give you tax benefits too. The best part is that you don’t need too much money for this.

Tax treatment for Gold ETF

The NAV is displayed periodically for the gold ETF just like mutual funds.
The advantage of Gold ETF is that you do not need to worry about the safety and storage as you would in case of physical gold.This is also very liquid compared to physical gold as the physical gold has to be taken to the buyer and sold.
Performance of Gold ETF Funds (click image to enlarge)


2. E-Gold
E-Gold is a new type of investment in Gold in India introduced by NATIONAL SPOT EXCHANGE LIMITED from April 2010 onwards.
Website link of NSEL: http://www.nationalspotexchange.com/index.htm

This facility allows investors to buy gold in a dematerialized form.

The trading session is from 10am to 11.30pm and hence investors can do it at their convenience.

Investors can buy in the lot in one unit of e-Gold which is equivalent to one gm. of gold.


Investors can invest in Gold in small denominations and they can hold it in demat and electronic form. e-Gold is demat Gold units. 0ne unit of e-Gold is equal to 1gm of Gold. You can buy Gold in small quantities like 1gm.

Dematted Gold units can be converted to physical units if you want it. No need to get out from home if you have an Internet connection at your home to buy, sell e-Gold units.
All you need to do is to go to the NSEL website and find a list of the depositories to open a demat account for this. You need a separate demat account for gold E-gold investment. Once you have that, it becomes very easy to trade with gold online.
  Difference between cost structure when investing in Gold ETF or Egold


Taxes for Egold from NSEL in India

No Taxes like VAT and Excise taxes on buying and selling of e-Gold in electronic form. If you are taking delivery of e-Gold, then you have to pay the VAT @ 1% and other local taxes applicable.

Long Term and Short Term Gains

If e-gold is held for less than 36 months, then it is a short term asset. Short term capital gain tax is applicable as per slab rates
If e-Gold is held for than 36 months, then e-Gold is long term asset. Capital gain tax applicable at 10%.

Wealth Tax
Wealth tax- Wealth Tax for e-Gold in India is applicable at 1%, if the net wealth exceeds 30 lakhs.

3. Gold Funds or Gold Fund of Fund
Gold funds are like mutual funds run by a fund house. The best advantage in investing in gold fund is that investors do not need a demat account to invest in a gold fund. Investing in Gold Funds or Fund of Fund don't require demat account like in Gold ETF or Egold. You get all the same facilities from gold funds as you get from other gold investment options with demat account.
With low penetration of demat account in India, Gold fund is a good option for people who do not have a demat account. This gives you all the benefit of virtual gold such as no storage cost and safety concern. The NAV of the fund will be bench marked against the price of gold.

Gold Fund of fund invest in gold ETF fund where as gold funds invest in companies which invest in gold mining companies.

4. Gold deposit scheme
The gold deposit scheme announced by the Indian Finance Minister aims to draw out a part of country's vast gold holding in private hands and thus reducing India's dependence on importation of gold. In this scheme they issue interest bearing certificates against gold collected from households, temples and trusts.

Under this scheme, the owner of gold gets a certificate against delivery of the physical gold with the designated banks. Here you can tender gold in the form of gold bars, coins and even jewellery.

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