LIC Jeevan Labh Plan : Reviews/Features/Return Sheet

The expected returns are in between 5.6% to 6.8%.

Similar to the earlier post regarding ‘LIC Jeevan Shikhar”, this plan i.e., LIC Jeevan Labh Plan also has a similar kind of offering.

LIC Jeevan Labh is a limited premium, non-linked with profit endowment insurance plan which was launched on 4th January, 2016 for the sole purpose of attracting individuals who want to avail taxation benefits. The plan is suited to those who want premium commitment for short duration having life coverage and benefits for a longer period.

The limited feature in this plan lets you chose among the three variants of policy terms (duration) i.e., 16,21 & 25 years and premium paying years are 10,15 & 16 respectively.

Features & Benefits:

Minimum Entry Age: 8 years

Maximum Entry Age: 59 years

Minimum Sum Assured: Rs.2,00,000

Maximum Sum Assured: No LIMIT

Policy Term & Premium Payment Term(years) : 16 (10years), 21(15years) & 25(16years)

Maximum age at Maturity : 59/54/50 years

Payment option Facility :3/6/12 months

Additional Premium Benefit : Optional Rider as Accidental Death & Disability Benefit

Term Insurance Rider Benefit : Increases the Death Benefit with sum assured

Loan Facility – Duration 3 years

Surrender Benefit – Post 3 Years of premium

Though the tenure is 16,21 & 25 years you need to pay premiums only for specific period

Maturity Benefit : Sum Assured + Bonus + Final Addition Bonus

Death Benefit : Sum Assured + Bonus + Final Addition Bonus Sum Assured (Not less than 105% of total premium paid as on date of the death occurred)

Commencement of Risk : Immediate

Fixed Premium Deduction every year

Grace Period : 1 month

Bonus Rates (per Rs.1000 Sum Assured) of LIC Endowment Plans are in the below range:

• <11 years - Rs34 • 11years-15years – Rs.38 • 16years-20years – Rs. 42 • >20 years – Rs.48

LIC Terminal Bonus Rates:


Source : LIC Website


If a 35 year old individual opts for a sum assured value of Rs.2 lacs for term 21 years for a premium paying term of 15 years then after completion of 22nd year he would receive maturity benefit of Rs.4.21 lacs(Inclusive Sum Assured + Accrued Bonuses + Final Addition Bonus.

The expected returns are in between 5.6% to 6.8%.

Higher the Age — Higher Premium — Lower Returns

Lower the Age — Lower Premium — Higher Returns


The main intension to buy Endowment plans is avail the money back option, risk aversion & insurance plus investment benefits. The combination of Insurance + Investment is not a good option to invest as you get minimum Insurance coverage & minimum return on Investments. Therefore before buying any endowment product, check for two most important things, insurance coverage on which all diseases & return on investment.

Hence, buying LIC Jeevan Labh Plan is not a right decision for people looking for more than 10% returns p.a on their investment, over a lock in period of more than 10 years.

Why NPS is not a good investment option

National Pension Scheme : Long Term, Illiquid, Taxable

What is National Pension Scheme?

Pension Scheme is launched by Government Of India where a particular amount is invested regularly till the age of 60 years and a lump sum is received at your retirement and a fixed monthly income for lifetime. Investments are market linked and asset classed are predefined by the government which are into government securities fund, fixed income instruments and Equity Funds.

NPS deductions comes under section 80CCC & gives deduction upto 1.5lac under the overall ceiling of section 80C. The only attraction of this scheme is that it gives an additional tax deduction of Rs. 50000 which puts the overall deduction upto Rs. 2 lacs This scheme is specifically designed for risk averse people, though the scheme is market linked but allocation of investment in the asset classes happens on the basis of your age. The more your age, the less weights of riskier assets will be applied to your investment giving you less returns.

Example : A youth aged 18 years wants to invest Rs. 1000 per month will have to compulsively invest for 42 years i.e., till the age of 60years.The Pension wealth on retirement would be Rs. 504000 and as per the rule 40% i.e., Rs. 201600 of the pension wealth is to be kept invested in life annuity on retirement which gives you less flexibility in your investment.This investment should be totally discarded by the youth.


Criteria & Issues of NPS :

Age Bracket of 18years to 55years

Minimum Investment : Rs.6000/year, Fund Management Charges : 0.009%

Risk option : Investment in Equity to the maximum upto 50% The older your age the less investment in Risk bearing products like Equity, Government securities, Corporate Debt etc which provides returns between 8-10%

Exit option : Withdrawal at the age of 60years but only upto an extent of 60%, rest 40% has to be invested in an annuity with IRDA.

Premature Withdrawal can be only at an extent of 20% of the accumulated savings rest 80% to be invested in an annuity.

The Withdrawal amount is taxable

Returns on NPS are not guaranteed and returns gained are taxed as capital gains

Funds change option is restricted to only once in a year

Investment Ratio Example : Mr. X aged 40 years wants to invest Rs. 10000 in NPS. Since his age is on a higher side the asset allocation will be as follows :

– Equity portion 40%, (Return : 12-14%)

– Credit Risk portion 25% (Return : 8-10%)

– Government Securities 35% (Return 6-7%)

So to average out Mr. X can achieve a maximum return of Rs. 1000 p.a at ROI of 10% p.a

In my opinion it is better to invest your hard earned money into Balanced Mutual Funds having both Equity & Debt option, Systematic Investment Plans, Employee Provident Fund which can be withdrawable after a period between 2months to 58years or in Equity Linked Saving Schemes, Bank Fixed deposits, National Saving Certificates etc which have a 3 to 5 year lock in period.

To conclude NPS is not a better investment option since there are far better investments than NPS which give benefits of less lock in periods, flexibility, taxation benefits, higher returns and many more.

LIC Jeevan Shikhar Plan : Tax Saver or Loser

As per the Insurance companies data it is said that 70% business is generated in the last financial quarter i.e., January to March where people want to save maximum tax by opting tax saving instruments.

LIC Jeevan Shikhar Plan is one of them mainly to target people who invest in tax saving instruments on the last call & end up paying premium due to lack of tax planning. It is a newly launched endowment plan (Benefit of Insurance and Investment) which is currently available for sale for a limited period between January to March, 2016 period.

How does Jeevan Shikhar work?


1. Minimum Entry Age: 6 years
2. Maximum Entry Age: 45 years
3. Minimum Maturity Sum: Rs.1, 00,000
4. Maximum Maturity Sum: No LIMIT
5. Premium Payment Mode : Single Premium Only
6. Policy Term : 15 Years

lic jeevan shikhar

LIC Jeevan Shikhar is targeting young individuals below the age of 40, Hence the below illustration is being taken of a 30 year old individual:

lic jeevan shekhar illusrtation


1. Long Waiting period : loyalty additions after 5 years of 15years policy term.

2. Loan granted in the policy term is 55% till 3RD Policy Year and 85% after completion of 13TH Policy Year.

3. Benefits of Loyalty Additions are variable depending upon the performance of LIC therefore assumed Loyalty returns at 10% are not guaranteed.

4. For Investment purpose, the policy should not be opted as it offers Return of 6.3% after 15 years of duration where a fixed deposit, PPF etc (safest & liquid investments) offers a higher return.

5. For healthy individual who pays more than 40% premium has received a sum assured of Rs.1 lac that too after 15 years. Even after considering Inflation at 5.5% constant for 15 years the future cost inclusive of inflation will be Rs. 98,505. Hence, it does not really matter if we invest Rs. 98,505 after 15 years because the value of the investment isn’t appreciating.

6. Any cancellation request will attract stamp duty charges, medical charges, service taxes, underwriting charges and proportionate risk premium for the period of cover.

Therefore to summarize Endowments policies should be opted carefully by going through a quick checklist i.e., returns, surrender terms, risk cover, tax coverage, bonuses, etc. To achieve your financial & personal safety goals wisely, better keep investment and insurance separate as per the analysis. There are many products available in the market which provide Insurance and Investments like Term Plan & PPF, Term Plan & ELSS, Term Plan & ELSS, Term Plan & National Pension Schemes, Term Plan & Tax Free Bonds etc which give better yields over the period of time.

Invest Smart and Safe

Protect a Lady by Gifting Health protection

It say’s “Family, Nature & Health all go together”, the three things which matter the most in an individual’s life especially in a women’s life who is gifted with inborn qualities of being kind, nurturing,brave,perfectionist,vivacious but at the same time she is delicate, sensitive who requires special care in her hectic lifestyle.

As per IRDA (Insurance Regulatory & Development Authority), India continues to have the highest levels of under-penetration in the world, with only 0.16% of the total population insured for health. Little wonder then that 70% of healthcare expenses are met from one’s pocket.

According to the 2015 survey by insurer ICICI Lombard, only 39% of the women are covered by proper Health Insurance. This also pointed out that women were prone to an increasingly succumbing to chronic ailments like anaemia, metabolic disorders, arthritis and cancer as compared to men. Of the 39% women who were covered, only 22% purchased policy by themselves while a large share around 63% was owned through husband or father with the rest sponsored by employer.

With the Government Program Initiatives like Indira Gandhi Matrtiva Sahyog Yojna, Indira Gandhi Maternal Relief Scheme etc., which has almost doubled the budget from Rs.230 crore to Rs.400 crore which compensates women who don’t receive maternity leaves. This initiatives gives relief on the monetary portion for a specific period at a later stage. But it does not relieves on huge initial costs like hospitalisation expenses, medicines cost, routine check-ups etc. which hence should motivate a women to attain a health insurance policy to protect against the initial monetary burden of the disease.

In low and middle-income countries like India which has 72.2% of village population, many deliveries occur at home without the assistance of trained attendants which increases the infant & maternal mortality rate. This is purely due to bad hygienic conditions, less infrastructural facilities, lower income, safety issues, less trained professionals etc. By protecting women by health insurance which compensates 50% of the monetary costs, women with less income will be facilitated to avail better facilities which will protect its overall primary health care.

In the current scenario of mental stress where a woman is demanded with multiple roles in her life being a supportive wife, a caring mother, a successful corporate leader or a successful businesswoman leads to increase in illness like Polycystic ovary disease, osteoporosis, Blood Pressure, Diabetes, Cancer at an age as early as 25 years and surprisingly less than 0.1% of the people opt for any health insurance facility at this age. Hence, this can be solved by availing a health insurance policy at an early age to benefit with maximum coverage and include critical illnesses which are not covered at later stages of age.

An illustration given below shows you the difference in medical premium between Family Floater or Individual Plan in accordance to the age of the family members.

Health Insurance

Source: Insurance Companies

This shows that a family floater plan will cost more with less coverage of illness vis-a-vis separate individual plans which customise as per your eligibility and requirements.

Therefore, to conclude it is of utmost importance to insure your health along with climbing up the pyramid in this challenging role of life to have a Wealthy and Healthy Living.


Nobody in the world gives anything as a charity to anybody without his / her own interest or benefit. Zero percent interest schemes are same. Normally on eve of any festival or for major stock clearances normally either manufacture or dealers launch such schemes for which they tie up with the banks/ NBFC’s for these types of schemes.

It is a major gimmicks and that the reason people should read the brochure very carefully before finalizing the option. Prices are always fixed for these types of schemes & companies / dealers do not allow any negotiation or cash discounts or any benefits in any other form of which a person paying in cash enjoys. Normally tenure of loans are almost fixed in some slabs & remains available from 3 months to 12 months for the small value items & up to 36 months especially for the high value house hold electronic and Furniture items.

How do these schemes work ?

Firstly these zero percent schemes have hidden costs inbuilt in them. Perhaps the biggest loss for you would be forfeiting the cash discount on a product that you could have otherwise got if you had bought it on full cash. This apart you will also be paying a transaction or processing fee under the zero percent scheme and consequently more money through advance EMIs.

For example, you decide to buy an Philips 40″ PFL3750 LED colour television that costs around Rs. 34,990. ( after Retailer discounts ) You decide to buy it using the zero percent finance scheme. Under this arrangement you will pay the entire cost in ten EMIs of Rs. 3490 for ten months. This works out to be Rs. 34,990 spread over 10 months. Now here’s how you end up paying more! To begin with you pay a processing fee of Rs. 1,000. And since you are buying the LED on a zero percent finance scheme you are not entitled to the cash discount of Rs. 8,000! ( Please check with snapdeal,PAYTM etc.. )

zero percentage

So here’s how it looks in the above example. The LED costs Rs. 34,990 ! Add up the Rs. 1,000 processing fee that you pay initially and Rs. 8,000 that was lost out on cash discount. A total of Rs. 9,000! This means you get a net finance of Rs. 25,990 only! Now you pay an EMI of Rs. 3,490 for 10 months which totals up to Rs. 34,990. So at the end of ten months you pay Rs. 9,000 more for what you got.

People can easily identify the hidden component of interest in these schemes by just calculating the price offered for spot payment (i.e. cash payment) & price offered for “ZERO INTEREST SCHEME” which is always the maximum price. Besides this, the interest is collected in the form of handling charges /documentation/services enabling charges & people remain unaware of these hidden charges. People should compare the payback period & amount payable in its comparison. It is always better to keep payback period minimum.

The RBI through its circular asked all banks to discontinue all zero interest EMI schemes on all retail products for violating the fair & transparency pricing practices, & because of which such schemes lowered significantly. Now those which are still continue are by tying up with NBFCs, because central bank has asked to discontinue such scheme & not the NBFCs.

The central bank has also asked such companies to bring more transparences in terms & conditions & total gross mount customer would end up making.

People should compare between consumer loan offered by the banks or finance companies & extended offer by manufacture or dealers & if possible people should prefer loan from banks than finance companies because of their transparency by & large extend & can be made accountable by RBI.

For high value loans such as car loans finance or banks check the CIBIL score of the customer which has to be very good i.e. 750 & above besides their other income criteria. This CIBIL & other conditions restrict large section of prospective buyers & only ten percent of the society become eligible for such schemes & those people can avail loans easily. For high cost items manufacturer incorporate the interest component in its sales price & in the form of significant amount of down payment collects it from the customer & pays it to the a banks or finance companies.

Budget 2016 : Sector Impact

Positive for Insurance

Foreign investment in insurance, pension sectors up to 49% via automatic route ( IIFL Hold )

Proposes Rs 5,500 cr for crop insurance scheme for FY17 ( Bajaj Fins,L and T Fin )

NBFC shall be eligible for deduction to extent of 5% of its income in respect of provision for bad debts ( SKS Micro, IIFL,NETWORK 18 )

Propose to launch new health care scheme with Rs 1 lakh as cover per family

Positive for general Insurance companies ( Reliance capital, Kotak )

Target of amount sanctioned under Pradhan Mantri Mudra Yojana (SKS Microfinance, Satin Creditcare )

Amendments in SARFAESI Act 2002 to enable sponsor of an ARC to hold up to 100% stake in ARC

Positive for fertiliser companies

Unified agri market scheme to enhance farmer access to markets (Coromandel Fertiliser,Chambal,GSFC )

Have to give farmers income security, aim to double farmer income

Negative for Auto

To levy 1-4% infra cess on cars, SUVs, higher engine capacity vehicles and 2.5% tax on diesel vehicle

Tax to be deducted at source at rate of 1% on purchase of luxury cars exceeding value of Rs 10 lakh ( Tata motor,Maruti,M&M )

Negative for PSU Bank

FM says Rs 25,000 cr for bank recapitalisation (less than expected, so negative for PSU banks) ( SBI,BOB,PNB)

Positive for PSU Bank

Goverment has option to reduce stake in IDBI below 50% ( IDBI )

Positive for Engineering

Will commission 9 km/day of broad gauge lines in FY18 and 13km/Day by FY19 ( Kalindee rail )

Positive for IT companies

Digital depository for school leaving certificates, college degrees ( TCS,Infosys,Wipro )

Positive for Software and training

set up high education financing agency with Rs 1,000 cr capital ( APTECH , NIIT, zee learn )

Regulatory architecture to be provided to ten public and ten private cos.


Positive for food processing cos

100% FDI to be allowed through FIPB route in marketing of food ( Nestle , Britannia,)

4 new schemes to enhance dairy farming in India at Rs 850 cr ( prabhat dairy )

Positive for Hospitals & Medical Services

Allocation of Rs 1.5 lakh cr for social sector including education, healthcare ( Aptech,Apollo hospital,Fortis,Narayan hrud )

Positive for Ceramics & Granite

FM allocates Rs 9,000 cr towards Swachh Bharat Mission (Nitco Tiles, Kajaria Ceramic, HSIL, Cera Sanitary )

Positive for Chemicals

e-Platform to connect wholesale agri markets ( pdiilite,Tata chem )

Negative for Cigarettes

To raise excise duty on most tobacco products by 10-15%. (ITC, VST Industries, Godfrey )

Positive for Construction & Contracting – Housing

Propose 100% deduction to undertakings for construction of affordable housing (DB Realty, NBCC ,Ashiana Housing , Peninsula Land, Nila Infra )

Raise personal I-T house rent exemption to Rs 60,000 from Rs 24,000/year. ( DLF,Oberoi Reality)

Positive for electricals

All major stations to have CCTVs in phased manner, 311 railway stations currently under CCTV surveillance (Zicom , Bharat electronics, Genus Power, Centum Electron )

Positive for Infrastructure

Investment in road sector, including PMGSY allocation, would be Rs 97000 cr in FY17.

( IRB, ITNL, HCC, Sadbha, L&T, NCC, Ashoka Buildcon )

To issue guidelines for renegotiation of PPP contracts ( L& T,Bhel,Adani ports,Siemens )

Allocate Rs 55,000 cr for roads & highways excluding Rs 15,000 cr NHAI bonds (MEP Infra, MBL Infra IRB Infra, J Kumra )

Improvement of suburban transport systems ( BEML )

Will set up 2 Locomotive Factories at the cost of Rs 40,000Cr (BHEL, BEML)

Positive and Negative for Mining & Minerals

Propose to scrap export duty on low grade iron ore. ( NMDC )

Clean energy cess for coal Rs 400/tonne (- ve for JSW, Coal India)

Plan to establish wi-fi services in 100 more stations in 2016 and 400 stations in 2017, ( D link )

Positive for Oil Drilling And Exploration

Cess on crude reduced from Rs 4500/MT to 20% ad valorem. ( ONGC, CAIRN INDIA)

Positive for pharma

FM propose to exempt parts of dialysis equipment from basic customs duty ( opto circuit )

Positive for Plastics

Propose to spend Rs 86,500 cr on irrigation projects in 5 years,28.5 lakh hectares will be brought under irrigation, Allocation for Accelerated Irrigation Benefits

Programme at Rs 17,000 cr for FY17, Allocation to farming sector at Rs 35,984 cr (Jain Irrigation, EPC)

Positive for Power – Generation & Distribution

Propose Rs 8,500 cr for rural electrification (Power Grid, NTPC, PFC, REC)

Target is to commission 1000 MW of Solar Capacity in next 5 years (Indowind Energy)

Positive for Power – Transmission & Equipment

Government committed to achieve 100% village electrification by May 1, 2018 (KEC international, L&T, Kalpataru Power

FM allocates Rs 9,000 cr towards Swachh Bharat Mission (A2Z Infra)

To up FY17 allocation for electrification by 50% (Kalpataru Power, KEC Intl, Siemens)

Electrification of 2000 Km (KEC international )

No reimposition of custom duty on crude

Negative for Textile

Higher excise on readymade garments priced at Rs 1,000 or more (Arvind)

Positive for Transport & Logistics

Basic custom and excise duty on refrigerated containers reduced to 5% ( snowmen )

Negative on Aviation

Excise duty on aviation fuel increased to 14% from 8% (SpiceJet, Jet, InterGlobe)

Positive for Transport & Logistics

Mission to provide LPG gas connection to women household members (Aegis Logistics)

Positive for Transport & Logistics

Propose to set up 3 Freight Corridors (Gateway Distriparks)

Is APRIL a month of Tax planning ??

YES, is certainly not the activity to start in the last quarter of the financial year. It is a part of the financial planning which is suppose to start from the first month of the financial year i.e. APRIL & is ongoing process.

Through out our career we take life mammoth efforts to earn money for the betterment of our today & future including post retirement life. But hardly we pay attention in investing it in right instrument at right time.

We all are well aware of ELSS scheme of mutual funds but for one stroke investors (not opting SIP) timing is equally crucial while investing in capital market for either entry or exits. Investment made at last minute in hurry may not be a best option for investment or may not generate expected return in comparison of schemes in the same group. People who prefer investing in bank’s tax saver schemes difference of 0.25 per cent in interest rates makes considerable amount of difference due to its long tenure of five year’s.

Investment in tax saving instruments such as post office/ NSC/Kisan vikas patra etc are much talked about & well known, ways of investments. These investments have its own merits & demerits such as long lock in period, interest is not tax free but safe nature of investment. But these options are not the only options. Over a period of time new options have also immerged & can play game changer roll if effectively used it in right manner.


Such as “GIFT”, spouse if not working or his/ her earning is below the taxable limit or one partner in the third level tax slab & his or her spouse is in the first or second tax slab then this option comes handy because person can give a gift up to Rs:-50,000/- per year to the parents, spouse, children as per the income tax act. Though even if prima fascia it appears small amount but for the next year person can get rid of the liability of interest it will generate if invested, which one needs to consider under the head of interest from investment at the time of calculating the tax liability for filling IT return.

As per the judgment given in the case of Bajrang Prasad. VS. Asst CIT husband can pay rent to his wife on couple of conditions laid down as under

A). The flat would be in the name of the wife.

B). Person should actually incurred expenses on rent in respect of the residential accommodation occupied by him i.e. in short person should actually make a payment of rent to his wife.

it is advisable for People who wants to avail this option, to make its payment through cheque & better if it gets reflects in wife’s income tax return under the head of “ income from other sources”. Also normally tenant born the electricity expenses & it is better husband should pay of electricity bills from his own account.

Another not much discussed option is about the increasing employee’s contribution from the existing 12 % to maximum up to 20% but convenient for people who have made adequate amount of contingencies provisions, medical insurances, all major upcoming responsibilities are well taken off. Benefit of this option is that the person can increase the tax free corpus of provident fund & reduce burden of the next years which it will generate from its investment.

Another popular investment option is public provident fund but it is good to start in the beginning of the carrier because of its 15 years long tenure & strict withdrawal limits. Considering the long tenure & good interest rates in fact parents should open account for there adolescent children to built up a corpus for their education, marriage.

For some specified diseases defined under section 11 DD of the income tax deduction up to Rs:- 40,000/- or actual paid whichever is less OR Rs:-60,000/- actual paid whichever is less for senior citizens are exempt under section 80 DDB.


Abatement in the bank interest rates, inflation (CPI) remains above the comfort level & range bound volatility in the share market compelling people to look for other avenues of investments. Company deposits is one the options people consider & priorities in this criteria instead of debt funds or bonds. But there some pros & cons for every investment which needs to be consider before investing into it.

Companies required capital for various purposes such as for the business expansion, as a working capital, which they manage with sources such as bank loan, director loan, corporate bonds, commercial papers etc. Companies are allowed to collect deposits from public known as company deposits. People misperceive these deposits with banks deposits .These deposits are governed by the companies acts, where as banks are governed by the Banking regulations act under strict control of the Reserve bank of India. Moreover cooperative banks have duel control i.e. RBI & respective state act administrated by the cooperative department of the every state.

A significant difference between bank & company deposits is that for companies deposits are unsecured loan in its nature so if company comes into problem, repayment of principle & interest may get delay or even differed & in case of bankruptcy investor may lose their money.


So whether people should invest in banks or companies. Answer of this question varies from person to person depending upon various factors such as investor’s age ,income, willing to take the extra risk for better returns, appetite in case of delay or deferred repayment of principle by the company,. Inspite of all these issues it is advisable that total allocation of such risky investments shall not be more than 10 % of the entire portfolio.

Not necessary that all companies shall have higher interest rates than banks. Some major well known, well market capitalization, financially well placed companies (i.e. well leveraged balance sheets companies ) are conservative & offers interest rates at per with banks. Companies belong to these categories are better & comparatively safe than other companies. Difference of 4 to 5 % interest rates between bank & companies interest rates required critical analysis as those carries excessive risk & in the absence of this analysis better to avoid investing in to it. So it is crucial to have some criteria such as regular dividend paying company, companies with diversified businesses, companies offering unusually high interest rates, private limited companies while selecting the companies.

In case of any problem with the company FD’s, much time consuming & limited options are available to the investors. Because of its nature of unsecured loan, available legal remedies are such as filing complaint with company law board, filing complaint with SEBI, registering the complaint with ministry of corporate affairs, or filing petition with the EOW( economic offence wing) of the high court. But these remedies too have its limitations such as litigations takes years in the high court & there are several practical problems such as complaint has to be filed with concerned jurisdiction of the high court where the company is registered & the concerned zonal office of the CLB. Travelling for every hearing is practically difficult, time & money consuming as well. So for investors better to prefer investing in the companies registered in their own states.

Thanks to the recent amendments in the company’s act, accordingly companies are required to obtain rating for company FD’s from the credit rating agency, which will help to maintain transparency.

While investing in cooperative banks, people should pay attention to some basic aspects such as banks history, dividend history, total bank deposits sectorial loan allocation of the banks (again thanks to RBI for making stringent rules for banking sector to maintain transparency), size of the bank as one high value loan account becomes non performing assets can put small bank into jeopardize. Similarly though FD holders of the cooperative banks do have a protection of insurance up to rupees one lakh but insurance companies procedures, rules , regulations are very stringent & very time consuming even it takes years if bank comes in to problem, as well as insurance company gives priority to the repayment of small deposits such as up to Rs.10,000/- & keep waiting to the medium, high value depositors.


Giving a gift on a valentine day is what a common trend in these days. Undoubtedly it is a symbolic act of love with each other & important as well. For years we are celebrating it in a same way. But are we ready to move one step ahead by way of joining financial planning & ready to give an emotional security to our spouse in its true sense especially in the time of uncertainty instead of only symbolic acts.

Today in some families husband & wife are distributing an expense such as EMI, grocery, taxes, electricity bills will be incurred by one partner & other partner shall take care of remaining expenses, gives a feel of live in relationship instead of good healthy relation.

Financial planning for valentine couple

Every one of us is very emotional about his or her earning/savings & vigorously reactive even in discussing about it but instead of that can we be more open & candidly start discussing about our future plans & ambitions, should set a common goal & prepare a plan accordingly. In the process difference are bound to erupt but by accepting & respecting those differences we should set the common goal for big achievement because we understand a basic principle i.e. united we stand.

Yes, sharing entire income may not be possible for both the partners but at least we should share some amount & should transfer that amount to joint account & incur all the expenses through that account.

Equally it is good for better investment planning such as avoiding repetition of investment schemes/ product offering same benefits. If plan together with joint account will open wide range of investment products of different benefits for different tenure & at minimal risk.

Its importance increases more in a relationship where one partner is working & the other partner is taking care of home. It helps to create true a strong bonding in the relation & gives a feeling of togetherness besides the financial security. It is especially beneficial in the emergency when the other partner may not be available for some genuine reason. These small steps develop trust, confidence in each other & results into emotional attachment.


Many fund houses & there number of schemes are operating in the financial market. Launching new schemes, merging of the existing schemes & closing of the schemes is ongoing continuous process in the market. Closely monitoring the performance of these schemes & to keep its track record is interesting but tedious work.

Though there are more than 5000 scripts in the Indian market but investable & tradable scripts from mutual fund aspects are approximately not more than 2000 (on the basis of company’s performances & future prospects).All the fund managers more or less invest in these scripts only as per there scheme’s objectives but inspite of it when we check & compare scheme’s performance with other schemes in the same segment we find significant amount of variation.

Various factors affects the scheme performance & to understand it, one should know the working of these fund houses & their fund managers.

Every fund house has their own panel of investment comprising CEO, number of experts & analyst, which selects the stock for investment after screening of the company balance sheet, fund flow & cash flow statements management’s objects & guidelines, past performance, future targets. Members of this panel even conduct several rounds of discussion to get the clear ideas of the company policies, & its strategic implementations to achieve the set goals.

mutual fund

On the basis of this analysis of every individual stock by its expert panelist, fund houses prepare the list of stocks comprising between 125 to175 scripts for their fund manager’s investments. Expert of these fund houses continuously monitor the major decisions & performance of these companies. Addition & deletions of the scripts from the approved list on the basis of their performances & economic trends is continues ongoing process.

This panel also closely monitor & keep the track record of the existing schemes of their fund houses operating under various fund managers. They check the nature & objectives of the scheme, portfolio size & in its line investment decisions taken by the fund manager, return on investment, portfolio turnover, risk exposure, expenses ratio. If required frequently they interact with fund managers, share views with each other’s & provide some valuable inputs as well.

From the given list of approved stocks fund, managers are suppose to select stocks for their investments & are strictly not allowed any other stock not approved by the fund houses.

But there some areas in which fund houses say remain final such as cash holding, risk analysis, maximum holding in any company, portfolio turnover etc. There are principle guidelines of every fund houses extend to their fund managers but it does not restricts fund manager’s scope & freedom.

Fund manager’s have liberties to select any stock from the given list, to decide about the sector’s weightage, investment to any company to the maximum permissible limits ( as per SEBI & fund house guidelines),purchase, repurchase of stocks, determining the holding period & sale of these stocks. They can consider high valuation stocks with good returns or economic stocks with risk free growth potential.

Fund managers are suppose to take their decisions in all the above mentioned issues, keeping in mind the nature & object of the scheme, risk factors analysis, & expected return on investment. For e.g. :- Balance fund’s manager is not suppose to have aggressive equity investment approach compare to pure equity fund.

Fund managers are allowed to use any strategy for their investments. Mainly there are two strategies used by the fund managers. First is Top-Down strategy (means analysis of the economy & accordingly anticipate the industry/ sector will drive more benefits, generate better returns & investing in the companies belonging to those industry/sector. Whereas the second Bottom -Up strategy focused more in the fundamentals of the company emphasis on the balance sheets analysis, peer group analysis, PE ratios, PE multiples, with logic that company will perform on the basis of strong fundamentals regardless the economic conditions & trends.