S&P BSE Sensex*	Re/US $	Gold Rs/10g	Crude ($/barrel)	FD Rates (1-Yr)
34,969.70 |554.12 1.61%	66.91 |-0.80 -1.21%	31,289.00 | -16.00 -0.05%	74.74 |0.96 1.30%	5.00% - 6.90%

 

Do you get an SMS when your bank transaction fails for any reason?

But have you heard of someone getting a similar intimation from the Employees’ Provident Fund Organisation (EPFO) on the failure of the employer to deposit contributions in your Employees’ Provident Fund (EPF) account?

Recently, EPFO took another step to improve transparency. It decided to intimate subscribers through email or SMS every time their employer fails to deposit its contribution. To access the press release, click here.

Why did EPFO take such a step?

In the past there have been instances where employers not only skipped their contributions deliberately, but also didn’t deposit contributions deducted from the employees’ salary.

And, such unethical incidents have been steadily on the rise since FY 2012-13.

Defaulting employers…

(Source: The Hindu Business Line)

Tamil Nadu and West Bengal have reported the maximum cases of such deliberate defaults.

What happens when your employers deduct your contribution, but don’t credit it to your account?

• If it remains outstanding for more than two months, but less than four months, then the employer has to pay 10% p.a. interest along with the amount due.

• For a delay of more than four months but less than six months, the interest penalty increases to 15% p.a.

• If contributions remain un-deposited for more than six months, then the employer has to pay 25% p.a. interest along with dues.  

Despite such stringent laws, employers refuse to pay heed. An employee remains under the impression that since the amount is deducted from his salary, the employer must have credited this to his/her EPF account.

At present, you can only check your credit balance. But with this initiative of EPFO, you will be able to track the contribution frequency of your employer as well.

 

Do you solely depend on EPF for your retirement planning ?

Ideally, you shouldn’t. There’s no doubt that EPF is one of the most attractive investment avenues from the retirement planning perspective, since it fetches you perhaps the higher tax-adjusted yield in the fixed-income category.

However, depending entirely on it would severely constrain your portfolio.

First, try to estimate the corpus you might require at retirement using PersonalFN’s retirement calculator. You may use PersonalFN’s calculator to do this exercise.

Second, depending on years left for your retirement and your risk appetite you should create a personalised retirement plan. You should also take into account your existing kitty of retirement savings.

Want PersonalFN to help you accomplish your goal of blissful retirement?

Yes?

Do not hesitate to call us on 022-61361200.

You can also Schedule a Call with our investment consultant, or even drop a mail at info@personalfn.com and we will be happy to help you.

 PersonalFN is a SEBI registered investment advisor. We will handhold in the path of wealth creation and living a blissful retired life.

How good is the idea of investing in mutual funds for retirement?

It’s imperative for you to invest in assets that keep pace with inflation. In other words, you should have exposure to assets such as equity and real estate. But as you know, investing in real estate requires a considerable capital commitment, for which many of us aren’t ready always.

This makes it all the more critical for you to invest in equity oriented mutual funds to create a dependable corpus for retirement. You should invest in them through a Systematic Investment Plan (SIP) route.

Retirement is a significant financial goal and you should not ignore, plan for it today!

Factors To Look At While Investing In Bank FDs

In the world of financial engineering and exotic investment products, bank Fixed Deposits (FDs) still remain one of the sought-after investment avenues.

However, when you invest hard-earned money to clock a better rate of return, it is important pay attention to the following factors:

• Issuer – The financial health of the issuer (or the issuing bank) is of prime significance for the safety of your capital. Taking undue risk for want of higher returns may not be a prudent approach. You ought to judge the credibility and financial strength of the issuer.

  Therefore look for a respectable promoter history and decent credit grade (with a stable outlook) from rating agencies –– although bank FDs unlike corporate FDs are not really dependent of ratings; they are regulated by the Reserve Bank of India (RBI).   

• Rate of interest – While the interest rate on bank FDs vary across banks, care should be taken not to get lured by the ones offering an extraordinarily higher rate than the market rate, otherwise you would risk your capital.

  Stories of some co-operative banks offering an unusual higher rate of return and then going bust are ample. So, learn from them, and remember that with higher returns comes high risk.

To read many more factors, click here.

Want To Retire Comfortably With A Solid Mutual Fund Portfolio? Read This!

You are going to spend every Indian summer in Europe post-retirement.

How does it sound?

You will really have to be a monk or an insipid person to call it a bad deal.

Do you want to know the secret of rich and peaceful retirement?

Frankly, there’s no secret.

Successful retirement planning is a science.

✔ Start early

✔ Estimate your post-retirement inflation-adjusted cash-flow requirements

✔ Consider your life-expectancy

✔ Take into account your risk appetite too

✔ Invest regularly and intelligently

✔ Review your portfolio periodically

And…you are done!

To read more on how you can plan your retirement, please click here.

Aggressive Hybrid Fund or Balanced Advantage Fund, Which Is A Better Option?

Until a few months ago, Balanced Funds were synonymous with equity-oriented Hybrid Funds that invested over 65% of their assets in equity. Clearly, Balanced Funds were not true to their name.

But there was a reason for this lopsided allocation. In order to qualify as an equity scheme, a minimum equity allocation of 65% is required. Since, equity schemes enjoy a tax advantage over debt schemes, an additional 15% exposure did not seem to do much harm. At the end of the day, investors would benefit.

However, most schemes classified as Balanced Funds were free to vary their exposure to equity, ranging from a minimum 65% to as much as 80%. This drew a lot of flak from the regulator.

After years of deliberation, the regulator had its way by coming out with the Categorization and Rationalization of Mutual Fund Schemes. This reform has the sole objective to create uniformity among the different categories of schemes managed by various fund houses.

To read more and Personal FN’s views, please click here.

Why You Should Not Ignore Personalized Asset Allocation While Investing

If celebrity investors lose a few millions, it seldom matters to them.

But for you it may be a significant loss. 

This is because each one’s risk appetite, financial circumstances, investment objective, investment time horizon and financial goals are different, and there choices of investments vary.

Mohan is a head honcho. He is the promoter of a mid-sized chemical company which does an annual turnover of over Rs 500 crores.

He is a very ambitious investor too. He rarely places money in bank fixed deposits. The worth of his family-owned assets——gold and real estate—— runs in multimillions. Of late he’s been investing only in equities.

Being a businessman, Mohan understands the risks involved in various businesses and industries. For higher returns, he takes calculated risks. He has a brave heart. He consults numerous equity analysts and wealth management firms, but personally decides what to buy and sell.  

To read more and Personal FN’s views, please click here.

How To Switch From Mutual Fund Regular Plans To Direct Plans

You have probably come to realise that regular plans of mutual fund schemes work out to be a costly affair for long-term investments.

If you invested in mutual funds before January 2013, the only plan option available was regular plans. Effective January 1, 2013, each mutual fund scheme that was available for subscription offered direct plans with a lower fees or expense ratio.

Direct plans, as the name suggests, are for direct investors who skip the intermediary or distributor. Due to which, these plans exclude distributor commissions, hence, are available at a lower fee to investors.

The difference in costs may seem like a few percentage points, but over the long-term, it could work out to lakhs of rupees.

To know more about the benefits of direct plans, do read: Mutual Fund Direct Plans - Everything You Need To Know

Over the past five years, many investors who realised the benefits may have already made the shift to direct plans.

To read more and Personal FN’s views, please click here.

Franklin High Growth Companies Fund Renamed Franklin Focused Equity: A Change In Strategy?

On April 19, 2018, Franklin Templeton Mutual Fund announced its proposal to change certain features of its schemes as a part of the categorization and rationalization guidelines issued by the market regulator. In line with this, Franklin India High Growth Companies Fund will be classified as a Focused Fund, with effect from June 4, 2018. The scheme will then be renamed to Franklin India Focused Equity Fund.

What has changed? Nothing critical really, Franklin India High Growth Companies Fund will continue to remain a multi-cap oriented fund focused on companies and sectors with high growth rates or potential.

While Franklin India High Growth Companies Fund did not have a restriction on the number of stocks, it maintained a focused portfolio of 30-35 stocks in the past five years. Hence, the fund house rightly classified the scheme as a Focused Equity fund investing in maximum 30 stocks.

Click here to read the complete note.

With the aim of encouraging retail participation in the government securities market, the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) have planned to launch an online platform for retail investors. Through the non-competitive bidding route, retail investors can now bid for government securities.

Your Guide To Insurance

All-Cap Fund: An all-cap fund is a stock fund that invests in a broad universe of equity securities with no capitalization constraints.

The term "cap" is shorthand for capitalization. The investment community measures a company's size by its market capitalization, which is calculated by multiplying the number of a company's outstanding shares by its current stock price. Companies are generally characterized as small, medium or large.

Quote: "Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.”‒Albert Einstein