S&P BSE Sensex*	Re/US $	Gold Rs/10g	Crude ($/barrel)	FD Rates (1-Yr)
34,046.94 |-95.21 0.39%	65.26 |-0.16 -1.86%	31,460 | 1055.00 -0.56%	64.73 |-0.67 1.66%	5.0% - 6.75%

 

But this notion has been proven wrong by a number of government departments. Don’t you get your passport effortlessly these days and pay utility bills online and raise grievances through digital channels? All this has become possible due to the early adaptation of technology by a few government departments.

It seems, the Employees’ Provident Fund Organisation (EPFO)—India’s largest retirement fund manager—has been undergoing sea-level changes.

Not only is it becoming more aggressive with its investment preferences, but it’s also trying to match the efficiency of the private sector. It has set the deadline of August 15, 2018 to go completely paperless.  

How EPFO aims to go paper-free?

• Subscribers must file online claims for the withdrawals above Rs 10 lakh from the Employees’ Provident Fund (EPF) and payouts above Rs 5 lakh from the Employees’ Pension Scheme (EPS).
   
• In March and April 2018, it aims to run an aggressive campaign to seed Aadhaar with subscribers’ accounts. This will help it eliminate paperwork from almost all processes including enrollment and withdrawal.
   
• Shift all administrative and procedural work from paper-format to e-format. In simple words, it aims to use more e-records rather than using physical files.

As stated in the EPFO circular, “All Zonal and Regional Offices are advised to take earnest action in achieving paper-free office as well as default-free EPFO system. The focus on enrolment also needs to be kept up to achieve the mandate of social security to all." 

"EPFO is getting ready with customer friendly facilities to serve the tech savvy young generation of workers. Database has been updated up to the mark and growing use of e-services will streamline hiccups of transforming the benefit delivery mechanisms in times to come”, the circular stated further.

Going digital will improve the efficiency of the EPFO, thereby resulting in better service to its subscribers.

If the EPFO walks the talk, investing in EPF , handling investments and withdrawing money would become exceptionally easy for its subscribers. As there would be no need to move files from one table to another, red tape will automatically get eliminated. More importantly, digitalisation of the EPFO will attract the novice and younger investors who often feel investing in EPF is inconvenient.

Nonetheless, smoothness in handling EPF accounts is one thing and the role EPF can play in your financial planning is another.

As you must be aware, EPF is a tax-free investment instrument for salaried citizens having an Exempt-Exempt-Exempt Status. The contributions made by the employee is eligible for tax deductions under Section 80C, the interest earned on the total investments and the withdrawal (including partial withdrawals for specific expenses) are exempt from the purview of taxation.

EPF plays an important role in one’s retirement planning. But you shouldn’t entirely depend on it to take care of your retirement savings needs. Seriously consider creating a personalised plan for yourself which includes your post retirement needs and takes into account your risk appetite as well.

Editor’s note: Want to create a personalised retirement plan? Want to know which are best investment avenues for retirement? Looking for assistance to walk the path to a blissful retired life? PersonalFN's Financial Guardian will assist you in planning your retirement. You can reach out to PersonalFN on (022) 61361200, or write to info@personalfn.com Depending on your age, your risk profile, number of years left to your retirement; PersonalFN will help you define your asset allocation and draw a personalised financial plan, so that you can fulfil your dream of living a comfortable retired life. To know how much you need to live a comfortable retired life, use PersonalFN's retirement calculator. It is an online tool that produces results in less than a few seconds.

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EPFO Reduced Minimum Investment In Debt. Here's How PF Subscribers Will Benefit…

 

The Indian Public Sector Banks (PSBs) are in the midst of reporting serious cases of frauds and Non-Performing Assets (NPAs).

The equity investors of these banks are going through one of the worst phases they might have seen with these institutions.

Although, the time for depositors to press the panic button hasn’t arrived, given that the government is still committed to protecting their money, they need to be cautious.

Invest less in debt securities—this has been the implied message of the Ministry of Labour and Employment, to the Employees' Provident Fund Organisation (EPFO).

Recently, it amended the investment pattern applicable to the Employees’ Provident Fund (EPF). According to which, the minimum investment limit for the Debt instruments and Related Investments has been lowered to 20% from the 35% earlier. The maximum ceiling remains unchanged at 45%.

Change in the investment pattern of EPF
If you observe closely you would realise, if EPFO prefers to allocate 20% of its corpus to the debt instruments and related investments, it will fall short of investment avenues despite exhausting the upper limits of other categories of investments.

Therefore, the recent move seems to be the precursor of it (government) increasing the ceiling on equity investments by at least 10%.

Equity investments generate better inflation-adjusted returns vis-à-vis those generated by debt instruments. For this reason, the global pension funds typically invest about 30% to 40% of their corpus in equity and related investments.

So far, the EPFO has adopted a passive route—by investing through Exchange Traded Funds (ETFs)—to deploying its corpus into the equity markets.  It’s estimated that the EPFO has managed to generate 13% annualised returns on equity investments.

EPFO has an AUM (Assets Under Management) of over Rs 9 lakh crore. Nearly 5 crore subscribers will benefit if EPFO manages to generate higher returns by investing incrementally in equity markets.

In FY 2015-16, it began investing in equity markets and deployed Rs 6,577 crore. If the ceiling on equity investments is raised to 25% indeed, it will end up investing around Rs 50,000 crore in a financial year.

Should You Opt For Daily SIPs In Mutual Funds? Know Here…

Exercising everyday vs exercising once a month can make a huge difference to your health.

So when it comes to creating wealth,  what would be advantageous?

Investing daily or investing monthly?

Some mutual fund houses seem to think investing daily works better.

While investment in mutual funds through Systematic Investment Plans (SIPs) with a monthly frequency was the norm, fund houses even offer a daily and quarterly frequency under SIPs.Which is the best SIP frequency?

Last month, the LIC Mutual Fund offered investors the option to invest in mutual funds through Daily SIP with as low as Rs 300 per day. This facility is available in five equity schemes viz. LIC MF Equity Fund, LIC MF Growth Fund, LIC MF Midcap Fund, LIC MF Infrastructure Fund, LIC MF Index Fund and two hybrid schemes viz. LIC MF Balanced Fund and LIC MF Monthly Income Plan.

“Through Daily SIP, the fund house is trying to promote the habit of investing daily and the aim is to create wealth through investing daily with a minimum sum of Rs 300 across 22 working days, which will lead to a monthly investment of Rs 6,600,” the fund house explained.

To read more about this story and Personal FN's views over it, please click here..

How Many Investors Prefer ELSS Over Other Tax Saving Options? Know Here…

We are heading towards the end of FY 2017-18.

Those who are still to make their tax-savings investments will have to rush now. 
Equity Linked Savings Schemes (ELSS) are getting popular with investors.

But they still perceive it as a risky and complicated investment proposition.

As a result, despite witnessing steady inflows, ELSS remains a less preferred option for the purpose of tax-saving vis-à-vis other tax-savings investment options—especially life insurance.

Unit Linked Insurance Plans (ULIPs) and traditional life insurance policies neither offer you optimum protection nor do they make a good investment. They are loaded with various charges and eventually eat into your returns. Therefore, it’s better to keep insurance and investments at arm’s length.

To read more about this story and Personal FN's views over it, please click here.

How To Select Best Liquid Mutual Funds For 2018 And Why You Shouldn't Ignore The Risk

 

Before you rush to invest in the best liquid mutual fund, read this…

At the beginning of 2013, bond yields were on a gradual decline. The Reserve Bank of India (RBI) had embarked on a rate-cutting spree.

The central bank, in a series of rate cuts, reduced the benchmark repo rate by 75 basis points from 8% at the beginning of January 2013, to 7.25% in May 2013. Bond yields dropped and debt investors were rejoicing.

Investors were optimistic, predicting further rate cuts by the central bank.

Towards the end of June 2013, US Federal Reserve chairman Ben Bernanke said the central bank is preparing to scale back its bond buying program if the economic recovery remains on track. This led to a sell-off in emerging market currencies, stocks, and bonds.

To read more about this story and Personal FN's views over it, please click here..

Should You Invest In Mirae Asset Short Term Fund?

Mirae Asset Mutual Fund has launched a New Fund Offer – Mirae Asset Short Term Debt Fund. The offer opens on February 23, 18 and closes on March 09, 2018.

The investment objective of the scheme is to seek to generate returns through an actively managed diversified portfolio of debt and money market instruments with Macaulay duration of the portfolio between 1 year to 3 years.
Being short term debt fund it will invest upto 100% of its net assets into money market and debt instruments.

For in depth review of Mirae Asset Short Term Debt Fund click here.

Mirae Asset Emerging Bluechip Fund: A Cautiously Managed Midcap Fund

Mirae Asset Emerging Bluechip Fund is one of the most successful schemes of Mirae Asset Mutual Fund. The fund management may have adopted a cautious approach of restricting fund inflows given the high market valuations and liquidity constraints, but it has certainly not disappointed on the returns front. The fund management has been prudent in its decision, thus enabling the scheme to avoid stock investments at unfavourable share prices.

As the name suggests, Mirae Asset Emerging Bluechip Fund focuses on investing in high growth oriented stocks in the mid cap segment. The fund seeks quality businesses that can provide decent growth in the long-term. The midcap fund has consistently been a top quartile performer that has outperformed its benchmark index by distinct margins in the past. Since its inception in July 2010, the fund has grown at 23.40% CAGR and has generated superior risk adjusted returns for its investors.

Click here to read the complete note!

 

Technology is a great enabler. Using appropriate technology not only improves efficiency but can also help avert potential frauds and misappropriations. The Securities and Exchange Board of India (SEBI) seems to have taken lessons or two from the recent instances of bank frauds. It is pondering on tightening up Know Your Customer (KYC) compliance processes for the registered intermediaries, brokerage houses and private banks. It’s considering the possibilities of using blockchain technology which operates on the concept of distributed ledger of records.

Everything You Need To Know About Credit Score    

Time Value of Money: The time value of money (TVM) is the idea that money available at the present time is worth more than the same amount in the future due to its potential earning capacity. This core principle of finance holds that, provided money can earn interest, any amount of money is worth more the sooner it is received. TVM is also referred to as present discounted value.

Quote: "An asset is worth what someone is willing to pay for it; and the value of an asset is the cash it will generate over its life."‒John Kay