Top 10 Government Schemes to Invest in India in 2021

(Published on 24-Nov-2020)

To encourage the habit of savings or investment, the Government of India has started multiple schemes for its citizens to invest. Most people either keep the money in cash or keep that in savings or Fixed Deposit Account. Savings account typically gives a return of around 3%-5% whereas Fixed Deposit can give a slightly higher return of around 6%. However, there are other factors such as Tax, Age etc. that should also be kept in mind while making these decisions. We have listed Top 10 Government Schemes for you to invest.

Top 10 Government Schemes to Invest in India in 2021

1. Sukanya Samridhi Yojana – Savings for Girl Child

As part of India's Government initiative Beti Bachao Beti Padhao campaign, the Sukanya Samriddhi Yojana (SSY), a small savings scheme, was launched in 2015. SSY is a scheme that revolves around the intention of the welfare of women and girl child in India. With the least amount of contribution of just Rs. 250, the scheme's applicants can avail higher returns of 7.6% along with tax benefits of maximum Rs. 1.5 lakh under section 80C of the Income Tax Act (1961). Sukanya Samriddhi Yojana calculator can assist in determining the returns you receive as per the invested amount and tenure

2. Public Provident Fund – Retirement Savings Scheme

PPF or "Public Provident Fund" is a retirement savings tax-free scheme, which is offered by the Government of India. The minimum deposit amount is Rs. 500 per annum and the maximum limit is Rs 1,50,000 per annum. A PPF account matures after the completion of 15 years from the end of the year in which the account was opened. At maturity, you can extend the PPF account indefinitely in blocks of 5 years at a time. The interest on the account is set every quarter and is paid by the Government of India. The applicable PPF interest rate for this quarter is fixed at 7.1%. The interest and maturity proceeds are exempted from tax, under Section 80C of Income Tax Act. The PPF accounts can be opened at any post office or in any authorized Bank. You can find out the maturity amount using PPF Calculator

3. Employee Provident Fund - Retirement Savings Scheme

Employees Provident Fund is another tax-free retirement benefit program primarily for all the salaried persons, especially belonging to the private/unorganized sector PF. It is a kind of savings scheme, where the employee contributes a specified proportion of his salary and an equal contribution is made by his employer, to form a retirement fund for the employee. On retirement, the employee receives a lump sum amount, including self and employer’s contribution, along with interest on both. Current PF interest rate is 8.5% at the moment. PF Calculator can help you determine total PF at retirement at the current interest rate.

4. National Savings Certificate (VIII Issue)

National Savings Certificate is an excellent investment for adults as it's safe (guaranteed by Government of India), pays guaranteed interest income (at maturity) and provides tax exemption under 80C. You need a minimum of Rs 100 to open an account and there is no upper limit to the investment. Currently, the rate of interest is 6.8%, which the government revises every quarter. NSC Calculator computes the interest gained and final maturity amount on your investment. This scheme is available through most of the post-offices of India. 

5. Post Office Recurring Deposit (RD)

India Post Recurring Deposit or RD Account provides allows individuals to open a 5-year post office recurring deposit account. The interest rates get revised periodically, and currently, you can earn an interest of 5.8% p.a. which can be checked via Post Office RD Calculator. The interest gets compounded every quarter and this ensures the sum of money multiplies when it reaches the maturity time.

6. Post Office Time Deposit or Fixed Deposit

Post Office Time Deposit, commonly known as Post Office Fixed Deposit, is a fixed deposit scheme that is similar to bank Fixed Deposit. You can invest a certain amount for a fixed period at a fixed rate of interest. The return from POFD is guaranteed and backed by the government of India and allows investments for a varied amount of times such as 1 year, 2 years, 3 years, and 5 years. Post Office Time Deposit calculator calculates of future savings based upon your deposit amount, post office’s interest rate and time horizon of investment.

7. Post Office Monthly Income Scheme (MIS)

Post Office Monthly Income Scheme (Post Office MIS) is one of the highest-earning schemes having an interest rate of 6.6% p.a., and maturity of 5 years. One can invest a maximum of Rs 4.5 lakh in a single account and Rs 9 lakh in a joint account. Check total interest earned using Post Office MIS Calculator

8. Post Office Senior Citizen Savings Scheme (SCSS)

Senior Citizen Savings Scheme (SCSS) is a savings tool for those above 60 years of age which provides senior citizens with a secure and a steady source of income after retirement. SCSS offers an attractive interest rate of 7.4% and is available at various Public / Private sector banks and in Post Offices. This scheme has a maturity period for 5 years which can be extended once by an additional 3 years as per Senior Citizen Savings Scheme Calculator

9. Kisna Vikas Patra – Fixed Income Investment

Kisan Vikas Patra (KVP) is a money double scheme of government of India where your principal grows at a rate of 6.9% per annum and gets doubled in 124 months. This scheme is available through most of the post-offices of India. You can use the KVP Calculator to compute the final amount that you can get at maturity

10. National Pension Scheme (NPS)

National Pension Scheme is a pension scheme to encourage adults to plan for their retirement. The scheme allows you to contribute regularly in NPS account during your working life. Post-retirement, you can withdraw a part of the corpus in a lumpsum amount and remaining in instalments to secure a regular income after retirement. This scheme not only provide good returns but also attractive tax benefits. This scheme has additional tax benefits of Rs 50,000 over and above Rs 1,50,000 under section 80C and 80CCD

Disclaimer

This data is for Academic purpose only. The data published on this post is just my opinion based on my own research and analysis and is provided as a general market commentary. As it does not take into account of your personal circumstances, please do not invest based solely on this information. By Viewing any material or using the information within this post you agree that this is general education material and you will not hold any person or entity responsible for loss or damages resulting from the content or general information provided here.

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4 Best Financial Strategies to be Considered for Your Personal Financial Planning in 2021

The year 2020 is really a full of surprises that no one has expected. This is really a nightmare to many across the Globe. The Covid-19 virus made the year 2020 as the worst year ever. Economies around the world collapsed, job losses are at peak and several stocks and sectors witnessed a doom. Apart from the Covid-19, Natural disasters and Political uncertainties between India and China leaded to further bloodbath in 2020. Many of us declared 2020 is a cursed year. Covid-19 taught us many lessons particularly with respect to finance. We still don't know when the vaccine would be available to every one in the country. Hence, we need to be more cautious about our financial planning in the coming year 2021. 

Why We Need Personal Financial Planning:

1. Financial Planning is nothing but the understanding of your financial goals which includes both short-term as well as long-term financial goals.
2. Financial Planning gives you a whole new approach to your budget and tell about improving control over your financial lifestyle.
3. The savings created from a good financial planning can prove beneficial in difficult times.
4. A good financial plan guide you in helping to choose the right types of investments to meet your needs.
5. Financial planning provides security to your family and provides peace of mind for you and your loved ones.

4 Best Financial Strategies for Your Personal Financial Planning in 2021:

Considering the worst scenarios happened in year 2020, one should accept that the times we are living is unprecedented and unpredicted. Hence, you may face additional challenges in your financial planning. You should reprioritizes your financial goals to meet any future uncertainties. Here I am suggesting 4 financial strategies to be considered for your financial planning to make the most of what's left of 2020 and set the stage for a more financially sound 2021.

1. Maintaining Emergency Fund:

The pandemic corona virus triggered an economic dip to many employees and self-employed. Any sudden job cuts or any medical emergency may damage your finances. So, if you aren't prepared for the unexpected challenges that life throws your way from time to time and find yourself in a very difficult spot. Hence, every one has to maintain an Emergency fund to meet any serious financial consequences. But how much you need? Thumb rule says, you should maintain a sum which is equal to a minimum of 6 months of your monthly salary. For eg. if you are earning Rs. 10,000 per month then your Emergency fund should be a minimum of Rs. 60,000. This will give you a cushion to meet your basic needs until you find a new job or business. Where to keep this amount? Many of us keep this amount in Bank Savings account or Bank FDs, but my suggestion is to keep this amount into a Liquid Mutual fund. A good Liquid Mutual fund yields better returns than a Bank savings account or some times Bank FDs. Apart from this, if you keep your funds in a Liquid fund for a period of 3 years then that amount will be considered as long-term capital and you will enjoy the tax relaxations on this. Liquid Mutual funds invest the money into Government Bonds and Securities, hence the security is high and completely insulated from stock market. You can also build your Emergency fund by investing into a Liquid Mutual fund through SIP approach. I suggest do not touch this amount unless you have any emergency situation.

Here's my suggested Liquid Mutual funds for the year 2021:

2. Maintaining Term Policy:

Because of Covid 19 there are around 1.3 Lakhs deaths happened in India. Among these deaths, most of them are bread-winners of their respective families. Just imaging, how the family will take care of the future financial needs in the absence of the family's head? Many of our Indians did not have awareness on the importance of having Term policy. The Term policy is an Insurance policy that gives coverage for a specified period of time through a guaranteed death benefit paid in case of death of insured during the specified time period. Premiums are calculated by the insurance company on the basis of an individual’s health, age and life expectancy. If the policyholder dies before the expiry of the specified time period of insurance- Payout will be the face value of the policy. If the policyholder dies after the expiry of the specified time period of insurance- There will be no payout. It is safe to take a Term insurance plan at least 10 - 12 times of your annual income. For eg. if your annual income is Rs 1,00,000 then your Term Insurance would be for the sum of Rs 10,00,000 - Rs 12,00,000. But one should not consider buying an Insurance plan as their investment. An Insurance plan is just to take care of the dependents and shouldn't be considered as return bearing investment. Do not forget to consider the Riders along with the Base Plan.

Some good suggested Term Policies:

3. Maintaining Health Insurance:

During these days, people are understanding the importance of having Health Insurance. The medical inflation rates in India are increasing day by day and it is becoming difficult to meet the medical expense for common people. Hence, every person / family should have health insurance. This will provide the risk coverage during emergency medical situations. Emergency medical expenses may result in severe financial distress. You may have to dip into your savings or sell your assets to meet such expenses. When you buy a health plan, you are assured of financial stability during a medical emergencies. Insurance providers offering different types of plans to maximize coverage and benefits. Some of the coverage includes pre and post-hospitalization expenses, hospitalization costs, day care processes, and domiciliary treatment. 

Here are some good Family Health Insurance policies:

4. Maintaining Financial Goals:

Your personal financial planning is incomplete unless you include your financial goals. Financial goals may have short-term as well a long-term based on the type of the financial target. Children's higher education, marriages, retirement needs are some of long-term financial goals. On the other hand, buying a vehicle / furniture, taking vacation etc. comes under short-term financial goals. If you have already set financial goals, this is the right time to review your existing Financial Goals and re-balance them with the upcoming challenges. For eg. you may have spouse, children or wishing a new Home or Vehicle. According to these new additions in your wish list, you need to add your financial goals accordingly. You may also get a promotion or a job change where there will be significant salary hikes. In this case, your allocation of funds should also be appropriate to maintain the current life style in future. Mutual funds are my top priority in choosing the right investment to your Financial goals. Be cautious about setting too many or unrealistic financial goals. Otherwise, you may not be able to accomplish any of them. maintain a checklist to keep track of how you are doing throughout the year, so that you can make any necessary modifications. Consider meeting with your financial adviser to review the goals and objectives that you have established.

Some of my suggested Mutual funds to meet your financial goals in 2021:

Conclusion:

We hope this new year will brings us new opportunities and usher this new year with new resolutions and challenges.

                            Wishing you a Happy and Bright New Year - 2021

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5 Best Government Job Exam Preparation Websites / Apps in India for Rural Students

(Published on 30-Oct-2020)

In India, most of the students' dream is to get a Government job by cracking the respective exams. Every year in India almost 7 crores aspirants are taking Public sector examinations for few Government jobs available. This shows the craze for Government jobs in India. Particularly students from Rural India the craze for Government jobs is even more. However, because of the limitations like lack of awareness, poor planning for preparation, poor communication skills, poverty etc. , cracking the Government job exams is more difficult for students in Rural India. To bridge this gap and to help the rural Indian students, some enthusiastic entrepreneurs started innovative start-ups to help students for preparation for Government job exams. 

Why Government Jobs Are So Crazy Among Students:

• Job Security as there is no possibilities of downsizing or employee cuts in government sector jobs.
• Even after retirement, the employee gets pension and retirement benefits
• Health Insurance Benefits through out the life
• Some Government sectors provide amenities like quarters, vehicles, servant etc.
• Respect in the society
• Easy Bank loans for home / vehicle / personal purposes at discounted interest rates

Top 5 Best Government Job Exam Preparation Websites / Apps in India:

There are many websites available in India for preparing various competitive exams. However most of them are not affordable to Rural or poor students. Also, some of these websites require high-end devices and bandwidths to access the sites. To overcome these limitations, some websites / apps using latest technologies, come up, which will work on low-end devices at lower bandwidths and are also available at reasonably low price subscriptions. 

1. Testbook:

Testbook is one of the fastest growing online Edtech startup helping more than 5 million students particularly from Rural and Semi-Urban areas, to ace Government job exams. Testbook is a one stop solution for government job aspirants, offering a 360° learning experience. Testbook was initiated by a bunch of IITian in 2014. Manoj Munna, Praveen Agrawal, Narendra Agrawal and Ashutosh Kumar who strongly believed that technology is the way forward to bring about massive transformation in education in India. Testbook has also launched the all-in-one “Testbook Pass” to support millions of students studying from home during corona lockdown to prepare for more than 100 government job exams sitting at home where they provided 100+ exams & 6500+ mock tests under single affordable subscription, starting from INR 149. Today Testbook has an annual run rate of over 30 crore with nearly 5 million monthly active users. Over 12 million aspirants of government jobs are today solving around 3.5 billion questions through Testbook App.

2. EduGorilla: 

This Lucknow based startup was started with the vision to make exam preparation easy for students and guide them. The EdTech startup offers Multilanguage online mock tests to students for competitive exams at affordable prices. EduGorilla aims to disrupt the unorganized market by applying better economical tactics and using technology to fast-track the process of curating mock tests. The startup has built a self-learning Artificial Intelligence algorithm that determines the operational profitability of various competitive examinations. Subsequently, EduGorilla claims to generate the test preparation content and mock tests for a particular exam in just 48 hours (which normally takes around 25-30 days) through automated workflow. Its AI-powered software automatically converts the test content to a book format that can be purchased via ecommerce platforms such as Amazon and Flipkart.

3. Pariksha Adda : 

Pariksha addda Academy for PCS, SSC, Banking & Other Govt.Jobs is another pioneering initiative of Pariksha Adda for Providing unmatched learning opportunities to lakhs of students who arc preparing for a career in Govt. Jobs (through SSC), insurance sector, teaching (CTET), CDS, CAPF-AC, NDA, Delhi Police etc. Pariksha Adda offers meticulously designed classroom programs to aspirants under the guidance of Success Guru Ajay Mishra. Pariksha Adda helps students with well-researched, structured and updated study materials, which are in line with the latest testing patterns of the examining bodies like SSC (Stall Selection Commission), CPO (Central Police Organization), CDS, CAPF, NDA (through UPSC) etc, endowing with requisite confidence and skills, necessary to get through competitive examinations. Currently Test series program is available and the Class Room Program will start imminently.

4. Gradeup:

Gradeup.co is one of the India's largest Government exams preparation website which helps to acquire the jobs in India's premium Public sector companies. Practice papers, online coaching and online test series are key for any competitive exam preparation. Thus, Gradeup personalized your learning and provide all the required materials for Banking, SSC, Railway, Teaching, UPSC, CLAT, CAT, GATE, JEE, Medical and other competitive exams. Engaging online classrooms allow you to formulate your preparation strategy and get a real classroom environment. These online live classes are presented by 100+ experienced mentors to coach you in the right direction and develop skills to match the competition at the same pace. To put your progress in action, numerous practice questions with in-depth solutions are mapped here in accordance with the latest syllabus & exam pattern. 24*7 support by their strong experienced faculties is provided to keep your productivity on track and spend your time wisely.

5. SarkariExam.com:

The name itself indicating that Sarkariexam.com Offers The Best Employment News Online Portal For Any Government Sector Exams. SarkariExam is the first dedicated government job portal in India emerged out with an objective of satisfying the demand of every educated individual to get a properly compensated job position in Indian Government sector. The candidates can subscribe the free job alert service on this job site, in order to get the latest alerts on the public sector recruitment exams and vacancies. The job alerts are sent regularly in the e-mails as well as SMS on the mobile numbers of the candidates. These e-mails and message alerts contain all the details and necessary information on the recruitment examinations. Thus, the candidates can never miss any government sector recruitment exams. This job site has millions of such subscribers all over the country. Solved examples of previous examinations, Assessment and practice test papers, latest Government employment news sections are some of the unique features of this website/app.

Conclusion:

There are many more good websites / apps available online. Students can search carefully and select 2 to 3 websites / apps which suits to their requirements. Some free websites/apps also available who are providing the exam stuff. But quality always pays.

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3 Best International Mutual Funds to Invest in India

(Published on 17-Oct-2020)

Many readers are asking about International Mutual funds and some good International Mutual funds to invest. International Mutual funds are one category of Mutual funds which primarily invest in stocks of companies listed outside India. These funds are high risk in nature, however for portfolio diversification purpose, one can look into these Mutual funds. Based on the risk appetite and time horizon, one can invest into these International Mutual funds accordingly. Because of the volatility in Indian Markets, the International Mutual funds came into focus and becoming attractive among the investors.

What are International Mutual funds?

International Mutual fund is one category of Mutual funds which invests in companies located out side India. These are high risk Mutual funds and are suitable for the investors who are having high risk profile. Hence, this is suggestable for younger generation and who are looking for better portfolio diversification. As these funds are investing in companies located out side India, the risk exposure is high, but at the same time one can expect the chances of higher returns. As the increase in awareness of Mutual funds, the International mutual funds are getting popular among young generation whose risk profile is higher than an average Investor.

Why International Mutual funds?

1. For tapping the earning opportunities out side the country
2. For portfolio diversification
3. For long-term alternative investment
4. For hedging against rupee depreciation

3 Best International Mutual Funds to Invest

1. Motilal Oswal NASDAQ 100 FoF:

This is one of the best performer of International Mutual fund category. This fund has been yielding 20% + profits consistently from the last 7 years. Last 1 year the yielding's crossed 50%. Around 99% of its portfolio consists of Equity exposure and the remaining in Cash and money market securities. Top 5 sectors of its portfolio consists Technology, Cons durables, Services, Communications and Healthcare. Apple, Amazon, Microsoft, Facebook, Alphabet are some of the companies in its portfolio. This fund is suitable for high risk appetite investors and who wanted to invest for long term in SIP approach.

2. Franklin India Feeder Franklin US Opportunities Fund:

This is also one of the best consistent performer of its category. Yielding 25%+ from the last 3 years. Total 100% of its portfolio consists of Equity based. Hence, it is riskier when compared to Motilal Oswal NASDAQ 100 Exchange Traded Fund. It is a fund of funds investing predominantly in units of Franklin U.S. Opportunities Fund, an overseas equity fund. It invests in US companies through Franklin U.S Opportunities Fund. This fund provides long term capital gains. The ideal investment horizon is 5 years or more. As it is fund of funds, taxation will be similar to a debt fund instead of any equity fund. In equity funds less than 1 year is classified as short term, while in debt funds less than 3 years it is counted as short term capital gain.

3. DSP US Flexible Equity Fund:

This is one of the good International Mutual fund which invests mainly in companies outside India. This fund will also invests in the units of other similar overseas mutual funds. Around 95% its portfolio constitutes Equity exposure and the remaining in Cash and money market securities. From the last 5 years, the fund is being yielding inflation-beat returns and is most consistent performer in its category. Investors who wanted to take high risk and better diversification can look into this Mutual fund.

Points to Remember While Investing in International Mutual Funds:

1. These funds are best suitable for High Risk appetite investors only.
2. Investors are suggested to invest with long term time horizon and through SIP approach only
3. As these are classified as fund of funds, the taxation will be similar to a debt fund instead of any equity fund.
4. These funds are suitable for portfolio diversification and should not be more than 10% - 15% of your total investment portfolio
5. It’s always better to invest with some professional guidance in the funds which is right for you and not just merely on last year’s performance to make quick bucks.

Disclaimer

This data is for Academic purpose only. The data published on this post is just my opinion based on my own research and analysis and is provided as a general market commentary. As it does not take into account of your personal circumstances, please do not invest based solely on this information. By Viewing any material or using the information within this post you agree that this is general education material and you will not hold any person or entity responsible for loss or damages resulting from the content or general information provided here.

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6 Best High Dividend Paying and Growing Stocks to Invest in India:

(Published on 25-Sep-2020)

Many conservative and Moderate investors generally look for regular income from the stocks. They cannot take high risk and cannot bear the volatility in the Market. For these investors, the dividend paying stocks are the good bet to invest into the stocks. Generally the investors think that the regular dividend paying companies are healthy in terms of finance as well as management. Can we consider all dividend paying companies are healthy? What are the factors we need to look before investing into Dividend stocks? Which are the best dividend paying stocks to invest?

What is Dividend?

Dividend in simple words is the money shared by a company to its share-holders on a frequent intervals based on their profits earned during that time intervals. Dividends can be paid out of the profits earned by the company in the relevant year or previous year. Some times the dividends may include capital profits. It means the sale of assets of the company and these asset profits can be used for paying the dividends.

Why to Choose Dividend Paying Stocks:

1. One can earn regular income from the stocks apart from the value appreciation of stock value.
2. Paying regular dividend is one of the measure of positive health condition of a company.
3. For diversification of one's investment portfolio.

Factors to Consider Before Investing into Dividend Paying Stocks:

1. Not all the companies paying dividends are really good healthy profits. Some companies may borrow the money to pay the dividends.
2. Need to look for the past 5 years dividend track record.
3. Need to check the growth rate and cash flows of the company.
4. Need to check the Line of Business and its future prospectus
5. Need to check the fundamentals and technical analysis factors of the company

6 Best High Dividend Paying and Growing Stocks to Invest:

There are many companies which are paying regular dividends to the share holders. However, we cannot say all these companies are healthy companies. Some of the companies may pay high dividend in the previous year and pay less in the current year. Because of the turbulances in the businesses, their profits may vary every year. Some companies will pay the dividends by borrowing the money from other financial resources. For some companies' Line of Business may not attractive in near future. So, we need to avoid all these factors and to come up with companies which not only having good dividend track record but also fast growing leaders in their respective sectors.

Based on my analysis, the following companies are good for investing which are leaders in their sectors and having good track record in paying high dividends. 

(*CMP as on 25-Sep-2020)

Conclusion:

Investors with long time horizon can invest into the above mentioned stocks through systematic approach. You even reinvest the dividends received from the respective companies to enhance your capital and to meet your financial goals.

Disclaimer:

This data is for Academic purpose only. The data published on this post is just my opinion based on my own research and analysis and is provided as a general market commentary. As it does not take into account of your personal circumstances, please do not invest based solely on this information. By Viewing any material or using the information within this post you agree that this is general education material and you will not hold any person or entity responsible for loss or damages resulting from the content or general information provided here.

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3 Best Mutual Funds to Invest for Children Higher Education

(Published on 16-Sep-2020)

The most important financial goal for every parent in India is children't higher education. Parents dream to see their children on top position in their education as well as their career. So, to give the best facilities like schooling, colleges, materials etc., every parent needs to plan to accumulate large amount of money. Today, there are many child investment plans available in the Market. One such good investment plan is investing in Mutual funds. The traditional investment plans like Bank FDs, Endowment Insurance policies etc. are considered to be safe investment plans, however these investments will not yield inflation-beat returns and may not meet the future expenses for your child's education. If any parent looking for Inflation-beat returns in the long run with calculated risk, then Mutual funds are the best answer.

Which Mutual Funds are Best for Children Education:

During these pandemic situation, the inflation impacted not only on the food and medical expenses, but on the education also. The education expenses has been abnormally increasing 15% - 20% every year, which is higher than the country's inflation. Hence, it is advisable to invest a portion of your investible money in good Mutual funds to beat the inflation and to meet your children's future education expenses. The following 3 are the best Mutual funds for your children's higher education expenses:

1. Mirae Asset Emerging Blue chip Fund:

This is one of the best Large & Mid cap equity fund with consistent inflation beat returns from the last 5+ years. If your time horizon is more than 5 years and you have long-term financial goals like Children's education, then you can think of investing into this Mutual fund. From the last 7 years, it has given 24.84% average returns and it has been in 1st rank in its category from the last 10 years. More than 50% of its allocation is in Large-cap companies and 35% in Mid-cap companies and the remaining small portion in Small-cap companies. Hence, the risk will be comparatively less and stable in long term. The top 5 industries of its portfolio consists of Finance, Technology, Energy, Auto and FMCG.

2. SBI Small Cap Fund:

Though it is more risky fund when compared to Mirae Asset Emerging Fund, but it has been giving decent and consistent returns from the last 10 years. Hence, I selected this fund for any long term financial goals like Children education. As the name suggests, its major portion of assets will be invested in good small-cap companies (67% of total assets) and the remaining in Large & Mid cap companies. Because of the high risk in nature, I suggest this fund to the investors who can have time horizon 7+ years and risk appetite is more. Top 5 sectors consists of Engineering, Services, Chemicals, Consumer Durables and FMCG.

3. HDFC Children's Gift Fund:

This is an aggressive hybrid equity fund, which invests 65% - 80% in Equity and the remaining in bonds. Because of this, the returns are less when compared to the above 2 funds. It has been giving inflation-beat returns since last 10 years. The only disadvantage is, it has 5-years lock-in period for any fresh investments. But, this gives the flexibility to the fund manager to allocate the funds into different portfolios. Those who are having 5+ years of time horizon with moderate risk appetite can look this fund. But if your time horizon is 7+ years with high risk appetite, go for any of the above 2 funds.

Factors to Choose these Mutual Funds:

• All the above Mutual funds are selected with 10 + years of consistent track record
• All the above Mutual funds are giving inflation-beat returns since 10 + years
• All the above Mutual funds are from reputed fund houses
• All the above Mutual funds are suitable for Systematic Investment plan (SIP) approach
• All the above Mutual funds are in 4-star or 5-star rating from the last 10 + years
• All the above Mutual funds are equity diversified mutual funds

Conclusion:

Investments for Children education is one of the most important financial goal for a parent. Hence it is always advisable to look for long term perspective. If you need inflation-beat returns then go for any of the above 3 Mutual funds and invest in Systematic approach for a minimum period of 5 + years.

Disclaimer:

This data is for Academic purpose only. The data published on this post is just my opinion based on my own research and analysis and is provided as a general market commentary. As it does not take into account of your personal circumstances, please do not invest based solely on this information. By Viewing any material or using the information within this post you agree that this is general education material and you will not hold any person or entity responsible for loss or damages resulting from the content or general information provided here.

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7 Useful Money Making Tips to Use this Year

(Published on 12-Sep-2020) 

The recent stock market crash of 2020 had initially put investors in jeopardy and projected an economy where making money would become severely challenging. However, since April 2020, SENSEX had started to move north, indicating a turn. Currently, the market is somewhat at a volatile stage, and investors need to be cautious while investing. 

Several individuals are, thus, on a quest to know how to make money this year and minimize losses. There are several investment avenues that new investors can tap into and expand their savings, irrespective of what their goals are. 

Here Are Few Tips That can Aid in the Process –

Tip 1: Consider Objectives and Goals

Before investing, individuals need to assess their objectives and goals. Some prefer to simply grow their wealth while others invest to meet expenses in the future, like children’s education or wedding, buying a car, down payment for a home, etc. 

Having a set objective and goal enables investors to plan accordingly – they can opt for low-risk schemes for growing their savings, or those with high returns to meet future expenses.

Tip 2: A Certain Degree of Risk is Necessary

Investment options, like deposit plans bearing zero risks, have recently considerably lowered their interest rates. For instance, bank fixed deposits are averaging a rate of interest of 5%. 

As such, for making money this year, individuals need to undertake a certain degree of risk.

Investing in regular or direct mutual funds can be an ideal option in this case. These enable an individual to invest in two ways –

1. Lump-sum – This involves a one-time investment of a sizable amount.
2. Systematic Investment Plan (SIP) – A particular amount is deposited every month.

In this regard, investing in mutual funds bearing moderate to moderately-high risk levels may prove to be lucrative. Large-cap and Bluechip funds can also be the options to go for since these invest in large Indian companies that are financially stable and have not been drastically affected by the recent downturn. 

Investors who want to invest in equities directly, can also look for fundamentally strong stocks. However, in order to invest in stocks investors need a trading and Demat account, which can be created through new age investment platforms like Groww.

Tip 3: Avoid High-Risk Investments

High-risk investments may offer high returns. However, it is advisable to avoid such schemes in uncertain times like these. 

Such investments must only be considered when investors have built a substantial quantum through low or moderate risk products and possess optimal knowledge of the market.

Tip 4: Opt for Short-Term Fixed-Income Schemes

Fixed-income schemes like bank FDs are currently offering some of the lowest rates. As such opting for such plans is surely not one of the brightest ideas to make money under the current scenario. 

However, individuals can easily invest in such schemes for short-term as an alternative to a savings account, which currently offers an average interest rate of 3%.

For those looking to know how to make money investing in fixed-income schemes can opt for corporate FDs. These are offered by financial institutions (other than banks) and companies. One of the drawbacks of corporate FDs is that the minimum investment is usually high.

Few corporate FDs that are offering the highest rates (as of August 2020) now are listed below –

 

Product	Minimum deposit amount	Annual rate of interest
Bajaj Finserv FD	Rs.25,000	6.90%
PNB Housing Finance FD	Rs.10,000	6.65%
LIC Housing Finance FD	Rs.20,000	6.00%

 The above is the minimum rate of interest for cumulative fixed deposits. Non-cumulative FD rates may be lower for monthly, quarterly, and half-yearly pay-outs. 

Tip 5: Review your Investments Frequently

It is essential to keep reviewing the performance of an investment, provided it is market-linked. 

Doing so is particularly necessary in case of stock trading. Stocks may be one of the simple ways to make money online, but investors have to remain cautious at all times.

Individuals will have to remain abreast of the company’s recent developments. Any major changes can affect its stock prices.
Hence, when learning how to make money, it is quintessential to keep reviewing and planning ahead to avoid losses.

Tip 6: Diversification is Essential

Diversifying investments essentially means to invest in several avenues. Doing so is necessary to maintain a balance between risk and return. 

One of the ideal ways to diversify is to invest in –

1. FDs for short-term.
2. Mutual funds and stocks for medium-term.
3. Other fixed-income plans (like PFF) for long-term.

Distribution of money across investments of different risk levels can help individuals to maximize their wealth.

Tip 7: Check the Charges before Investing

This tip may not directly be linked to making money, but it is essential to follow. When buying stocks or investing in mutual funds, investors may need to utilize the service of a stock brokerage company. Such companies usually charge a fee, which may be based on transactions. There might also be other charges involved. Hence, it is necessary to check all the charges of a brokerage company before going forward with it. Keeping all these tips in mind will help those looking to know - how to make money. It is recommended that beginners start small, especially in the case of investments that involve some risk. 

Disclaimer

This data is for Academic purpose only. The data published on this post is just my opinion based on my own research and analysis and is provided as a general market commentary. As it does not take into account of your personal circumstances, please do not invest based solely on this information. By Viewing any material or using the information within this post you agree that this is general education material and you will not hold any person or entity responsible for loss or damages resulting from the content or general information provided here.

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