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Are your bank FD safe with PSU banks?


The recent news of Bank scams and huge losses incurred by banks are making the common man jittery over the safety of one’s hard earned savings. Bank FD is the most natural option used by salaried class to park their savings to provide for the future needs. One, because the nationalised banks are owned by the government and its was indirectly a guarantee that your funds are in safe hands. Whenever there has been a doubt about the viability of a Bank, RBI has stepped in and ensured safety of investor deposit by merging of weaker banks with the stronger ones. Let’s have a look at the regulatory provisions to know how safe your deposits are.

Bank deposits in value terms are insured by the Deposit Insurance and Credit Guarantee Corporation of India (DICGC), a wholly owned subsidiary of the RBI. The deposit insurance covers all commercial banks, local area banks, regional rural banks and cooperative banks. You should be aware that only Rs 1 lakh of your savings is insured. This limit has not been revised since long. As an investor you should also know the worst-case scenario in case something untoward happens.


Merchant Navy – Life at Sea, wealth at home, really?


Quote from a merchant navy sailor: *
“If one has a bucket list, sailing on a merchant ship should be on it. It gives you the perspective of what is it like to witness the spectacular grandeur of 3/4th of our planet in a ship’s setting. The experience is very humbling.”

Sounds exciting… but other than missing the family life, there is a big-gap in terms of financial planning, investments& execution. More so with the fact that, half a year (or more) they are sailing, without having any access to the advisors, markets or simply, how to manage their finances?

Aashish, a 42-year-old merchant navy captain, currently navigating a LNG vessel, somewhere between Korean& Russian ports, says: “One day I sat down to calculate my last 12 years of earning, and wondered where all that money had gone…”.

Merchant navy or mariners, enjoy non-resident (NRI) status, if they are sailing for more than 6 months, hence their income becomes tax-free. The job involves high-risk, with high compensation; but with a peril of possible physical injuries, resulting in end-of-career & future earnings. Common FAQ.

Once they are back (on vacation), they would want to catch-up on investments & options available. Where most of the time, their financial planning or investments, are influenced by the family members or Bank RM’s, without involving plans or data-driven advice.

Therefore, Merchant Navy joiners need, a true hand-holding with advisors, who are not just selling financial products, but first creating plans based on their lifestyle & future. And the crucial area which needs coverage, involves advisory access (online & offline), wealth management and execution services, all under one umbrella.

*Quote Link:

MWP Act – Married Women’s Property Act 1874- INSURANCE TERM PLAN


One interesting & great legal tool in hand, but hardly been pushed by anyone.

What it means; at the time of initiating (buying) a term insurance policy, one should also sign this document. This document legally ensures that, post the policy holders demise, only wife will receive the policy cover value and not the creditors (policy holders outstanding with others) or relatives.

We take Term-Plan, to ensure the well-being of our family, specifically wife and children in case of any unforeseen events. Therefore, ensure that you sign this document.

Once a policy is availed under the MWP Act, it may not be attached by courts for repayment of your debts. Only your wife and children will be entitled to the Sum Assured in the event of your demise.

Market Meltdown: Shall I Invest or Wait?

Market Meltdown

“Alice: Would you tell me, please, which way I ought to go from here?
The Cheshire Cat: That depends a good deal on where you want to get to.
Alice: I don’t much care where.
The Cheshire Cat: Then it doesn’t much matter which way you go.
Alice: …So long as I get somewhere.
The Cheshire Cat: Oh, you’re sure to do that, if only you walk long enough.”  – Lewis Carrol, Alice in Wonderland

Every time the stock markets react, I’m reminded of the above dialogue. Firstly, many who look upon stock market as source of wealth creation have not decided their financial goals. Secondly it is important to sit back and understand the event that lead to fall or even rise, instead of reacting. Let’s look at each of the above points further deep.

Achieving a financial goal means deciding with clear time and resource target. Financial planning is the most talked jargon but little understood. In simple words, one should have clarity of how much wealth is required to live and monetary and non-monetary goals in life. There are few financial planners in Mumbai /India who can guide you about it. Once the goal and resources are known, the direction becomes clear.


Frequently Asked Questions (FAQs) – Taxation of Long Term Capital Gains (LTCG)

  1. What is the meaning of long term capital gains?
    Long term capital gains mean, gains arising from the transfer of long-term capital asset. The Finance Bill 2018 proposes to provide for a new long-term capital gains tax regime for the following assets:

    • Equity Shares in a company listed on a recognised stock exchange;
    • Unit of an equity-oriented mutual fund; and
    • Unit of a business trust.

    The proposed regime applies to the above assets, if the assets are held for a minimum period of twelve months from the date of acquisition.

  2. When will the tax be levied?
    The tax will be levied only upon transfer of the long-term capital asset on or after 1st April 2018.
  3. What is the method for calculation of long-term capital gains?
    The long-term capital gains will be computed by deducting the cost of acquisition from the full value of consideration on transfer of the long-term capital asset. (more…)

How Mutual Funds will be taxed now – Budget 2018-19


How Mutual Funds will be taxed now – Budget 2018-19

Equity Mutual Funds

Fund Type Short Term Capital Gain Long Term Capital Gain (> 1 year) Dividend Tax
  • Equity Fund
  • ELSS Fund (tax saving)
  • Hybrid Fund – Balanced (Aggressive or Equity oriented)
  • Arbitrage Fund
  • Gain up-to 1Lac–Zero Tax
  • Gain > 1lac – 10% Tax
    without indexation
  • Cost on oldinvestments
    based on 31st Jan 2018 closing price##

## Which means, if you have invested INR 100 on 1st Jan 2016, and if you redeem on 2nd Feb 2018 @ INR 155, LTCG will be calculated based on the price on 31st Jan 2018. Let’s say on 31st Jan 2018, the value was INR 150, in-short you have to calculate LTCG on INR 5 only, provided the total gain exceeds 1lac.

** Dividend Tax; after adding 12% surcharge & 4% cess = 11.65%
** Capital Gain tax calculated(Short term or Long term), will also include surcharge based on your total income and 4% cess.


Budget Simplified – FY 2018-19

budget 2018-19

Talking to people around on budget this time; most of them are unhappy, as budget has not kept pace with the expectations, like for a salaried (US), no announcements on tax slabs, or tax exemptions 😉.

But for a budget, with elections just around the corner, our dear finance minister has maintained a fine balance on populist measures, economic growth & stability.

Let me highlight, key takeaways from the budget:


Financial Planning for Woman

financial planning for women

We have always seen our mothers on the front-foot, towards managing the house, family, husband, kids, or virtually everything in the house. Also referred as a “Tiger-mom” towards handling kid’s education, other activities, with a selfless motive, to ensure that kids just excel. And the story continues,with our dear spouse as well (wife). 😉

But when it comes to finance or investments, they just give it up, either it’s the father, or the dear husband, who becomes the driver on managing investments.

But I still recall, whenever one need handy cash or some contingency funds, pop comes the money, mostly as cash or some unknown Bank FD/ deposit.


SIP – Stop, Switch, or Increase, what do I do?


With market at an all-time high, we been getting queries in all possible formats from our customers, on what do I do with my SIP (systematic investment plans) in Mutual Funds?

My suggestion; find your own reason on what you want to do with your SIP. But strictly, do-not get swayed by the market jump or the recent surge, or even a dip in the future(which can also happen). As per studies conducted on the human behaviour, most of the time we react or make panic decisions based on the external factors,and miss out on the larger picture, or the long-term benefits.

My understanding on all SIP’s is that, they are started with some purpose(goal) in mind, therefore one should follow the simple rule of Start-and-Forget for your SIP… i.e. irrespective of the market movement, High-or-Low, you are not to be bothered, till the time the purpose (goal) date is approached 😉

Even though market is all time high now, but looking at the internal & external factors governing our economy, India is poised towards a great growth, not just for now (2018), but for many years to come, at least 10 to 15 years from now. India is the next China.

INCREASE SIP: if your cash-flow is permitting you to commit more per month, definitely it’s The Best Idea. Do not wait further, and right away take the decision to either top-up (increase) your existing SIP, or choose the next best fund to start another SIP.

SWITCH SIP; based on your study (and I mean proper study)or after consulting a qualified advisor, ONLY, one can look at a switch, i.e. to close the existing SIP and start with a new SIP fund(same or higher amount). Overall, just by looking at newspaper/ TV info & ads, one should strictly avoid such decisions/ switch.

STOP SIP; strictly a big NO. As suggested earlier, you are starting an SIP for a purpose (goal) & not to time the stock market, therefore one should not look at stopping SIP. Even if you want to stop, ask this simple question, where would you invest that money now?


Mutual Funds Disclaimer: Investment in mutual funds, is subject to market risks, including the potential loss of principle and fluctuation in value. Past performance does not guarantee future results. You should consider the Investment objectives, risks, charges and expenses of investment securities carefully before investing. Read the prospectus carefully before investing.



Article published in Mumbai Mirror (Times of India) on 5th Jan 2018. Link:

“Spend less, save more” is a great resolution, but how do you actually achieve it? An expert offers advice.

The definition of insanity is doing the same thing over and over again and expecting a different result. Yet, when it comes to finance, that’s exactly what most of us do. If you’re determined to make this the year when things finally start to go your way, all it requires is some sensible shifting — which means, move out of wrong loans, investments, expenses and move into the right ones. Here are a few suggestions on how to achieve this.

Credit card payments

One of the biggest mistakes one makes is to pay off only the minimum amount due towards credit card debt. It’s vital to remember that you’re paying an annual interest rate that’s upward of 36 per cent on the rest of the amount; plus, if you’re doing this regularly, your debt is steadily mounting too. Consider the fact that if you have an account (a deposit) with the same bank, the amount in it will earn no more than around 6.5 per cent annual interest (current rate). Paying out 36 per cent when you’re earning only 6.5 per cent is the quickest way to go bankrupt.

What if you don’t have the money to pay off the debt you’ve accrued on your card? Take a personal loan from your bank to pay it — the annual interest on a personal loan will be around 10 to 12 per cent. You could also take a top-up loan on your existing home loan — the interest rate will be around 8.5 per cent to 10 per cent annually. Use this to repay the entire credit card debt in one-go and promise yourself that you will only use credit cards for revolving credit henceforth.


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