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Everything you should know about Breaking your Fixed Deposits before Maturity

Posted on by Jagoinvestor

Today let me share the procedure and some points regarding the premature breaking of your fixed deposits. We have seen, that due to the ease of creating fixed deposits online, more and more investors create them if they are not able to find the right purpose of their surplus money and then in case of emergencies, they have to break their fixed deposits prematurely.

are you thinking of breaking you fixed deposits before maturity? here is the procedure

Procedure for Breaking Fixed Deposit Before Maturity

Now the procedure for breaking the fixed deposit is fairly simple and much faster. However, the whole procedure can vary across PSU banks and Private banks. The procedure can also vary if you take into consideration online vs. offline

When you create a Fixed Deposit or Recurring Deposit, the bank sends you Deposit Certificate or receipt after some days of opening it (In case of many PSU banks, you need to collect it manually by going to branch). This is just a receipt or a proof of deposit. Now you can carry this deposit certificate to branch and ask the bank official to break your FD, they should be able to process your request.

However in case you do not have the deposit receipt or have lost it somewhere, you don’t have to worry much, in that case, you will have to give them a letter or fill up a premature FD breaking form available at the bank branch, read further to know about it. Read about Requirement of Fixed Deposit on Opening Lockers here

Online Procedure of Breaking Fixed/Recurring Deposits

A lot of banks allow you to open create fixed deposits online from your net banking account.  I have seen that most of the private banks allow you to break your fixed deposits online itself, all you need to do is go to “service request” section of your net banking and you will see a section where you can break the fixed deposit before maturity.

In ICICI, when you go to “service requests” section, on the right-hand side you can see “Fixed/Recurring Deposits related”, you can go to that section and choose “Premature Closure of Deposits” and then choose the FD/RD number and cancel it.

Your request will be processed in the next working day and you will get the money in your account. Check the screenshot below which shows you that.

Breaking Fixed Deposit before maturity Online

Offline Procedure of Breaking Fixed/Recurring Deposits  by visiting the Branch

A lot of PSU banks do not allow breaking your Fixed deposits or Recurring Deposits online. You will have to visit the branch itself and manually break it. Here is what you need to do

  • Step 1 – Write an Application mentioning you want to break your FD/RD, mention the Deposit Number and account number where it should get credited. At times, you have to fill the premature FD Breaking form available at the bank itself. In almost all the cases, the fixed deposit is broken instantly, the bank official must be able to do it with a click of the button.
  • Step 2 – Attach an ID proof (PAN etc). Private Banks have the Xerox machines inside the bank itself, so you just need to carry the original id proof and they will help you with the photocopy.

Below is a sample letter stating wish to break the fixed deposit or recurring deposit prematurely.
Breaking Fixed Deposit or Recurring Deposit Letter

Do I need to pay fine on Breaking Fixed Deposits before maturity?

When you break fixed deposits prematurely before maturity, you will not get the same interest rate offered originally. You will get the interest rate which is applicable for the tenure you actually ran the FD for. For example, suppose you opened the FD for 1 yr originally, and the interest rate offered was 9 %.

Now if you closed the FD in let’s say 3 months, and if the interest rate for 3 months FD was 7%, then you will get only 7% interest for the period of your fixed deposit. Also in several cases, there might be penalty charges which are nothing but another reduction in your interest rates.

Like the bank, rules can say that if your FD was opened for 1 yr, and if you break it before maturity, you will get 1% less interest than offered. Many a time, there is no penalty for short-term fixed deposits.

Best practices before you create Fixed Deposits!

  • If you already have few commitments in near future, avoid creating long-term Fixed deposits, create short-term FD’s
  • Instead of creating one large FD (example 5 lacs FD), better create 2-3 FD of small amounts like 2 lacs + 2 lacs + 1 lacs. This way if you need a partial amount (let’s say 3 lacs or 2 lacs or 1 lac), you will be able to break the FD’s partially. It won’t affect the full amount
  • You can take a loan against Fixed Deposit or overdraft against your FD.

Some Important points to know

  • There is various kind of fixed deposits products, at times there are fixed deposits which also allow you to withdraw the FD money instantly through Debit Card itself, like for example Kotak bank Flexi-Deposit.
  • Also, if your fixed deposit is under Sweep In Account, then you should be able to withdraw the money instantly without manually breaking it, read more about the sweep in accounts here.
  • For some banks fixed deposits (private banks mostly), the some FD’s get broken if you issue a NEFT/RTGS transfer to some bank account. Like if you have a 2 lac FD in Kotak Bank (Flexi deposit) and if you transfer Rs 2 lacs in another account through NEFT/RTGS/IMPS, then the transfer happens and the FD is broken.
  • In the case of companies with a current account, company seal will be required along with signatures of partners.
  • In worst cases, your Fixed deposit breakage might require some approval from the main branch, but it should not take more than 2-3 days in worst to worst cases.

Share your personal experience about breaking the Fixed Deposit in the comments section if any!

4 FAQ’s about Investors Bootcamp Answered – which might be stopping you from joining !

Posted on by Jagoinvestor

Its only 5 days left for our investors bootcamp and we got some interesting questions from some our readers regarding Investor’s Boot camp that we are starting from 12th August. It is possible that you might be having same questions in your mind and so we thought of compiling questions for all. The concept of investors boot camp is new and it is perfectly fine if you have doubts or queries.

4 FAQ’s about Investors Bootcamp (Only 5 days LEFT)

Question 1 – I am a procrastinator by nature. If only I wasn’t a procrastinator, I know I could be a STAR Investor. I’m on jagoinvestor  from many months and I also follow other blogs on personal finance, I know I should be buying adequate life cover and health cover and be more goal driven but I am failing at taking actions. Can this boot camp be of help to me as an investor. I trust you guys fully and paying 4k is not an issue for me.

Answer:  “This boot camp is designed for procrastinator and for those investors who are struggling to take actions in their financial life. As a boot camp participant we will assign you simple actions every week and you will be reporting directly to us and we wont tolerate any kind of casualness from any participants. We are going to be extremely demanding and direct with all participants and will make sure you get strong on the action part. This boot camp is an opportunity for you and so don’t miss it.”

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Question 2 – I am kind of person who will do a lot of research and always find myself in “Crossroad situation”. I am always confused as I have more than one option in front of me. I want to get out of my research mode and want to take many actions. Will this group be of help to me. Please send me details

Answer: The problem you are facing is faced by many investors. Investors are getting drunk on information on the name of investor education which is dangerous from wealth creation point of view. As boot camp participant we won’t dwell into intense intelligent discussions. We won’t over load you with more information. We will simply ask you to do X every week and you will complete X actions in your financial life. Let’s make things simple and do what is required to live a good financial life

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Question 3 – I am very new as an investor and I have no personal finance knowledge. I have bought one of your books but still have not completed reading it. I am into job from last 1 year and want to start investing. Can this boot camp help me?

Answer: This boot camp has to be seen as a strong starting point. It does not matter whether you are new or an experienced investor. The content of each week will be generic and something that will be useful to all kind of investors. We will provide you with a structure and an environment where you will start to think and act in your financial life. We will help you to plant right seeds in your financial life that will be of help to you. We look forward to serve you.

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Question 4 – I am still not clear how a boot camp can happen on a facebook group. I mean how will you guys help so many people in taking actions. The group will have people from different backgrounds and age level. I want to join and I know when you guys come-up with something it will be high on value but can you throw some light on how will you manage this boot camp. Thanks in advance

Answer: This is a very good question. The beauty of this structure is it’s simplicity. Anyone from any location can be a part of this boot camp. We have chosen facebook as most of the people have facebook account. This is new and first of it’s kind bootcamp but we will make sure that participants will create immense value. Every Monday we will upload one action sheet (Excel based) and will post weekly actions for all group members and on Saturday people will report their results.

The actions and material provided will make action taking extremely simple. We do not intend to create great investors in this boot camp but we want make better investors. Investors who are busy and want and extra helping hand in their financial life. In past we have done such groups for advisors community and we know the dynamics of how to help people move forward as a group

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Even after reading these questions you have any further doubts or questions feel free to write us. We will be more than happy to answer your queries. And if you are clear this boot camp will be of help you click here and complete your registration. We invite all the readers to be a part of this Investor’s Boot camp

Are you getting fooled and paying extra money on your restaurant Bills ?

Posted on by Jagoinvestor

Do you know that you might have lost thousands of rupees in paying extra money on restaurants bills over last few years, just because you do not understand what does service charge, service tax and VAT actually means and how are they calculated. Most of the times customers take it for granted assuming that hotel must charged it in right manner and as per rules laid down. Lets learn about these 3 concepts today so that next time you pay a hotel or restaurant bill, you exactly know what you are paying for and raise your voice if something is wrong.

When the Bill Arrives

Just before the bill arrives, I have this habit of running “guessing competition”. Whoever is with me, I ask him/her – “Guess, what would be the bill amount be around ? Give the range , whoever is close wins !” .

Almost all the time I am very close to the actual amount, but then I am not close to the final amount to pay, because I always forget to consider various tax and charges applicable, which always inflates the bill by 20-30% . Imagine you eat worth Rs 1,000 and pay Rs 1,260 finally ! . You know that feeling :).

So if you look at your bills when you eat at hotels and restaurants, you will see 3 kind of charges namely “service charge” , “service tax” and “VAT” . Lets decode them one by one and see what exactly they are

Service Tax and VAT on Restaurant Food bills

1. Service Charge

Service Charge is a charge levied by restaurant for the service provided to customers. This is generally 5%-10% of the bill and restaurant owner is free to charge whatever amount he/she wants as service charge. Its up-to you to decide if you want to eat there or not. The service charge has to be displayed in Menu, only then it can appear in the final bill. If you do not see it on Menu, it means it was not communicated to you and you cant not be charged service charge.

Service Charge at Barbeque NationActually service charges are to be distributed among waiters and staff and its kind of compulsory “tip” to be paid. So if there is service charge on the bill, you are not suppose to tip officially to any one. So don’t feel awkward not paying the tip, because you have already paid it in form of service charge, however most of the hotels and restaurants never tell you this explicitly. However one of the exceptions I know is restaurant called “Barbeque Nation”, I could clearly see it was written in their menu that “We will levy 4% service charge on the final bill, and you are not suppose to tip any one (strictly prohibited), because service charge will be shared among the staff” . The ethics quality was as high as their food quality 🙂

So if your food bill is Rs 1,000 and service charge is 10% , then your final bill will be Rs 1,100 .

2. Service Tax

The important thing, you should be aware about is how service tax is calculated! . Do you know that, Service tax is only applicable on 40% of the bill amount, not the total amount. As the service tax is around 12.36% at the moment, the final tax you need to pay is only 4.944% (12.5% X 40%) on the bill (inclusive of service charge).

The next important thing you should know is that, only AC restaurant can charge service tax. If there is no AC in restaurant (fully or partially) , they cant charge service tax at all. This service tax goes to Govt of India. The service tax is payable on the bill amount + service charge. So if Bill amount is Rs 1,000 , and service charge was Rs 100 (10%), then your sub total would be Rs 1,100 . And your service tax will be computed on Rs 1,100 (not Rs 1,000).  4.944% of Rs 1,100 will be Rs 54.38 and your total bill after service tax would be Rs 1154.38 . A lot of unprofessional and small restaurants are found to charge service tax on the full bill and most of the customer pay because they have no idea what is wrong and what is right. Here is official Note on service tax

Note – On 3rd Nov 2012 , Bar Council by mistake interpreted that service tax is to be paid only on service charge, and it starting circulating over facebook and emails. But note that it was a mistake and later clarified that service tax is to be charged on 40% of the bill amount also. So dont fall for wrong information . Even some one posted it on our jagoinvestor forum and I myself believed it to be true !, but later decided to investigate it.

3. VAT – Value Added Tax

VAT is Value added Tax collected by State Govt. VAT is only applicable to the food items which are prepared inside the restaurant, because they “added some value” and then hand it over to you. So make sure you do not pay it on packaged items which are not prepared by Restaurant like Packaged food items, water bottles etc. A lot of times you eat at restaurant and also take a lot of packaged items, in which case VAT should be applicable not on final bill, but only sub total of the food items you consumed.

VAT Charges vary from state to state, but generally lie in the range of 10% – 15% . Like in Maharashtra its 12.5% , and in Karnataka its 14.5% . VAT is to be charged only on the main bill + service charges. It CANT be charged on the amount after service tax. So in the same example we looked about, the final bill after service charge was Rs 1,100 , so VAT at 12.5% will be Rs 137.5. Now total bill amount would be

  • Food Bill – Rs 1,000
  • Service Charge – Rs 100
  • Service tax (4.944% of 1,100) – Rs 54.38
  • VAT (12.5% of 1,100) – Rs 137.5
  • Total – Rs 1,291

29% higher Bills compared to Cost

You can see how various charges and tax can increase your final bills by 25-30% . So next time you pay your bills, just make sure your check, if all the taxes and charges are computed properly and as per rules.

Any personal experiences ?

20 terms which will Super Charge your Real Estate knowledge !

Posted on by Jagoinvestor

The biggest tool an investor has is knowledge on his side. But when it comes to real estate, we can see a lot of investors do not pay a lot of attention to smaller details which can create big problems for them. Today I want to hand over to you a real estate terminologies toolkit, which will explain various things to you in most simple and shortest way. When you go out to buy your home next, you will not need anyone on your side to have conversation with the builder and you will give him the feeling that you know more than him. It should help in someway.

Real Estate Terms and Termninologies

18 terms which will super charge your Real Estate knowledge

Here are those 18 terms and terminologies.

1. Carpet Area – When you buy a flat, you actually area on which you can lay carpet is called as “carpet area”. Note that builders advertise the property based on other parameters, but as a buyer this is what you are going to actually use for next many decades. Higher the Carpet area, better space you get.

2. Built up area – Built up area is the area which covers Carpet Area and the Walls and doors . A good 15-20% of space goes into walls and doors and your super built up area is generally 20% higher than carpet area. Ideally the rate quoted by builders is based on “built up area”.

3. Super Built up Area – A lot of times you will come across a term “Super Build Up area” , which is nothing but built up area along with all the space common to all the residents of society like Corridors, staircases, parking area etc . So Super Built up area is higher than Built up area. A lot of builders also use “super built up area” to advertise the projects which gives an artificial picture of property. Never rely on that

4. Sub-Registrar Office – For Registrations of Properties, there is an official department called “sub registrar office” , you can visit it to get your properties registered and also obtain any legal documents related to properties and land. If any officer tells you to “pay for Chai Pani” there, tell him you are filing a RTI and putting his name in the application for the “request” he made to you and ideally he behave properly with you. Note that you can get sub registrar office address online. Example – for Delhi its here

5. Capital Gains – When you sell a property after 3 yrs, the amount of profit you make is called “Capital Gains” . Tax will be applied on this Capital gains after applying Indexation. Also you can avoid paying this tax if divert the profits part in another property or another way of saving tax on that amount is investing in NHAI or REC bonds.

6. Encumbrance Certificate –  Encumbrance Certificate is an evidence of free title or ownership of property. This document clearly tells you if there is any legal or monitory dues on property. So if you are going to take a home loan against a flat, bank will need Encumbrance Certificate to be sure that there is no other loan going on for the same property. You can get the Encumbrance Certificate from the Sub-Registrar Office (where registration of properties take place). You can ask for upto 30 yrs of data (if available) . It takes around 15-20 days at times to get it after you have put a request to get encumbrance certificate . Read more about Emcumbrance certificate here

7. Title Deed – A title deed is a legal document used to prove ownership of a piece of property. So if you are buying property from Mr. Manish Chauhan, make sure you check the title deed. Title deed is something which you can get from Registry office of the concerned jurisdiction. Title deed is something which one must always obtain and check if you are buying an old property, because at times land and property is owned by some one old and children claim that its in their name just to speed up the process, but at times it gets ugly later. Important Tip – Never rely on Xerox Copies of the Title Deed, get it examined in original because sometimes the seller might have taken a loan and given in the original deed to lender (and does not tell you about this) .

8. Stamp Duty – Real Estate Stamp Duty is the tax collected by Govt . The stamp duty payable differs from one state to another. In some states its 3-4% and some has it at 8% also. The Stamp duty is payable on Agreement Value. So a lot of times buyers and sellers do the property agreement at lesser value and involve black money in the transaction. Its important to factor in stamp duty cost as per of your home purchase plan, because its quite a huge amount . For a Rs 50 lacs property, it can be in range of Rs 2-3 lacs. Important point is that women in many states have to pay lesser stamp duty compared to men.  For instance, in Delhi, a women need to pay a stamp duty of 4% compared with 6% for men. Thats 2% saving and for a 50 lacs house, its a saving of Rs 1 lacs” .

9. Franking Charges – When you go for home loan, there is a small charge called as “franking charges” paid you buyer to Bank . Franking (incase of real estate transaction) is actually the activity to stamping a document which proves that the Stamp duty has been paid to govt. Its an official seal kind of thing which is to be done in sub-registrar office for a small fees (Few Hundreds), this is done by the bank and they collect those charges from buyer.

10. Registration Charges – Just like you pay Stamp Duty, you also pay Registration Charges when you register the property in your name and the charges again depends from state to state . In Maharashtra, the registration charges are 1% of property or Rs 30,000
whichever is lower.

11. Gift Deed  – Generally you “sell” the property in exchange of money. But when you have to transfer the property rights to some one without taking the money like what happens in families, then you should to pass it on as GIFT and a Gift Deed should be prepared to document the process. Note that Stamp duty is to be paid even if the property is transferred through Gift Deed. Learn more about income tax on gifts here

12. Power of Attorney – A lot of times you will find that someone is trying to sell you land or a flat, based on power of attorney, which is a legal way of transferring your rights to someone else. But Supreme court has now banned all the real estate transactions based on power of attorney. So next time someone tells you that the owner of land is outside India and hence assigned him power to sell the flat, do not get fooled, only deal with someone with clear title deed.

13. Sale Deed – A sale deed is one of the most important legal documents in a purchase or sale of a property. Once its signed by the seller and buyer only then the sale is assumed to happen legally. The registration of property and stamp duty payable is based on sale deed only. A sale deed will also contain property details , measurements and other important details.

14. Service Tax and VAT – Service tax needs to be paid only for under construction properties untill complition certificate has been obtained by builder. Because till the flat is under construction, its regarded as “service”, so service tax is applicable (3.09% at the moment). But once the construction is over and complition certificate has been obtained by Builder, then the property like “goods” , where the service tax is not applicable. In the To be Paid for Under Construction Flats. VAT again is applicable for under construction properties, but only in those states where state govt has asked for VAT. Not all states have VAT applicable.

15. Conveyance Deed – Conveyence Deed is a legal document which a builder executes in order to transfer the land title to Housing socities formed. This is generally done once all the flats are sold in a project. This step is extremelly important because if this is not done, the title of land still remains with Builder and incase in future something happens, there is unnecessary legal battles. So make sure that once the society is formed, the conveyance deed is executed.

16. Completion Certificate – Once the project is completed, the local authority visits the site and inspects the construction and various things and awards completion certificate to Builder. so Completion Certificate is kind of certificate from local authority, that now the work is complete. This is the moment a builder can officially declare about the project completion. There still can be few last minute things which might need to be addressed.
17. Possession certificate – Possession letter is issued by the Builder which is actually the official permission to take possession of property. Generally its given to those who booked property during under construction. If its a ready to move in flat, the sale deed is enough and will work just like possession certificate. Note that a builder can give possession certificate only after he has obtained completion certificate.

18. Ready Reckoner Rates or Guidelines Value – For each area, there is a official govt defined rates for property which acts like the  base price. The minimum registration and stamp duty charges has to be on those guidelines value. Builders generally charge premium over these guideline values . Read more here

19. FSI (Floor Space Index) – It is the ratio specified by local authority (generally municipal corporation or urban development authority) which governs how much area one can build over a specific plot of land. i. e. if FSI for an area is 2 and you have a 1000 sq ft plot, you can build (2 X 1000) 2000 sq ft building over it. Generally, common areas like staircase, lift, passage leading to the flat door, service ducts outside toilets and kitchens, etc. are not considered in this 2000 sq ft FSI area, which means, you can construct these areas over and above the permitted FSI area. At macro level, this magic ratio called FSI determines how much construction will come up in a city.

20 – OC (Occupancy Certificate) – Well, generally CCs (Completion Certificates) are issued by municipal corporation in stages. i. e. a 25 floors high building may be issued CC for every 5 floors depending on its design. However, building is considered to be ready-for-occupation after builder has not only completed the construction but has also made it habitable by bringing in all services like electricity, water supply, drainage connection and fire fighting facilities. The corporation, after receiving NOCs from all concerned dept. will issue OC. Ideally, builder should / can issue Possession Letter only after receiving the OC. In reality though, several (not few) buildings have OC even after years of completion and being occupied. Buildings not having OC have higher outgo towards water bill, electricity charges and property tax.

Thanks Mehul for adding last 2 points as contribution

Please add more terms

If you are aware about some other thing which you have come across or feel can be added here, please add it in comments section.

Also let us know if you feel like a “pro” now in real estate terminologies or not ?

Investors Bootcamp for 8 weeks – Report to Manish and Nandish Directly

Posted on by Jagoinvestor

Do you want to change your financial life in next 8 weeks and want to work with Manish and Nandish in a group oriented program online ? Read on ! .

People get on our blog, buy our books, select our services and purchase our products because they want to live a “Good Financial life”. Our mission as a team is to help every investor to live a Good FINANCIAL LIFE. We love what we do and it has been a sheer pleasure sharing personal finance insights with investor’s community every week on our blog. A smile on an investors face is our greatest reward; we want everyone to be prosperous. We see every reader as our extended family and we will always come-up with something new that you can engage with to grow as an investor.Today, we would love to share our internal commitment with you (This is what we STAND for as a team)

We as a team will always be of service to every investor. We as a team will design products and services that will help people to grow wealth. We will author books that will touch people’s heart. We will measure our life not with how much money we make in life but how many people’s financial lives we influenced with our work and thought process. We want to engage with projects and work which helps us to share our GIFTS with the world. We will always be surrounded and associated with powerful and empowering people in our life. We will set-up GAMES that helps us grow personally and professionally.

We thank every reader for always being with us and for helping us to stick to our internal commitment all the time. Your encouragement and love truly matters!

We have two BIG ANNOUNCEMENTS for YOU!

Announcement #1 – 8 Weeks Boot Camp for investors

The word boot camp comes from the realm of military. It is where all the tough training takes place. In a boot camp ordinary people dust their casualness and are trained to produce extraordinary results. We want to create such boot camp for investors who need assistance in living a good financial life. We are absolutely committed in helping those who want to actions in their financial life. We will be with you, guide you and will help you to design project called “Good Financial Life”. Listen to the audio below to understand more about this bootcamp (direct link)

With the help of this project you will get a chance to be with many other investors who will be taking actions with you every week. You will get an opportunity to learn from other’s financial life and experiences. Inside this project we will be with you for full 8 weeks and will assist you to take your financial life to the next level. As program participant we will provide you with the material, tools and support. Every participant will be assigned a buddy to work with during the project and you will report your weekly results to us directly on a closed facebook group. Your weekly results will be tracked and the structure of this boot camp will be extremely simple and effective. The mission of this boot camp is to “Live a good financial life” and nothing else. The only thing we will sell you for all 8 weeks or rather remind you constantly is the possibility of living a good financial life.

investor-bootcamp-2013-ji

Apply for the Investors Bootcamp

Choose 1 ticket and click on Register Button below for making the payment. You will get a payment confirmation email after you register. First 10 members can use BOOTCAMP2013 for 1,000 discount

Announcement #2 : 8 weeks – Women Investors Empowerment Program

We feel a lot of work needs to be done for women investors and we don’t want to wait any more. We are starting a special small group for women investors. This program is designed to empower women investors. The program will help women investors in understanding personal finance in a better way.

If you a man and want your wife to learn about personal finance, this is a program you should gift to your wife. This group is for those who hate numbers, it is for those who are really bad with personal finance, it is for those who are afraid of personal finance jargons, and it is for those who think “personal finance is not my cup of tea”. Listen to the audio below to understand more about this bootcamp (direct link)

Once you complete this program you won’t become an expert but you will surely get comfortable and more confident in the world of personal finance. You need to see this program as your first baby step that will help you to become an empowered women investor. As program participants you will have to engage with short weekly assignments which will help you to improve yourself as an investor, you will learn to know your rights better and you will learn to get in control of your own finances.( At least some key areas for sure). Every week we will have FREEDOM DAY where you get a chance to ask the world’s most stupid question and we will be of full assistance to you. It is going to be a safe and fun zone for women to participate fully and an opportunity to kick start their journey as an investor.

women-investors-empowerment-program-ji

Apply for the Women Empowerment Program

Choose 1 ticket and click on Register Button below for making the payment. You will get a payment confirmation email after you register.

Let’s look at what it takes to be a part of this PROJECT

To participate you need a small financial commitment, an open mind, a facebook account and lots of commitment to live a good financial life. So, if you want to be with us, you want us to assist you, guide you just be a part of our project “Live a good financial life”. You can click here and find out more about our new initiative and if you have more questions feel free to leave your comments in the comments section.

Only 18% of single working women make their own investment decisions

Posted on by Jagoinvestor

I thought of sharing an interesting survey done by DSP BlackRock along with a research Agency. An overwhelming 77% of working women depend on spouse and / or parents for their investment decisions, says the new DSP BlackRock study conducted by global research agency Nielsen.

Only a minuscule 23% of the surveyed working women claim to be sole decision makers, when it comes to their own investments. This figure is even lower (18% and 13% respectively) when it comes to the proportion of single working women and married working women who take their own investment decisions.

Women and Money decisions - survey

The study, ‘Understanding Women – Usage and attitude towards financial products’, is based on a pan-India survey of more than 4,750 women spread across 14 cities (6 metro cities and 8 non-metro cities) to understand the women usage and attitudes towards financial products.

The study also examined factors that facilitate or impede their investment decisions, besides their attitude & expectations from financial products. The survey covered working and non-working women between 21 – 60 years of age, and included divorcees and widows.

According to the survey, while 92% of working women claim to be involved in the investment decision-making process, 70% of these women are actually joint decision makers and a majority of these, at 52%, are only informed about the investment decisions which have already been made.

Women are reluctant to Take Risk

The main reason why women don’t take investment decisions is that they are safety oriented and reluctant to take risk, the survey notes. Husbands also seem to dominate the investment decision making among working as well as non-working women.

While the proportion of Sole Decision Makers among working women is similar in metros at 24% and non-metros at 20%, in case of non-working women, sole decision makers are confined mostly to metros. The survey also observes that the proportion of sole decision makers among working as well as non-working women is significantly higher among the divorced and widowed.

While analyzing women’s main reasons to invest, the survey notes that future security and child’s education form the key reasons for investments, especially amongst women in non-metros. Although the desire to invest with an objective to become rich is lower compared to the other reasons, it is observed to be higher among women in metros.

Tax does not feature as a primary reason for investments among women surveyed.

Women feel controlled and disciplined about their spending

The survey also highlighted the safety aspect when it comes to women and investments. Women are inclined towards safety while investing and hence put more money in instruments that yield fixed returns. Most of the surveyed women also feel that they are controlled and disciplined about their spending.

When it comes to trusting various financial institutions, it was observed that women trust nationalized banks (88%) almost twice as much as they trust Indian private banks (43%) and foreign banks (24%).

Aditi Kothari, Executive Vice President and Co- Head Marketing, DSP BlackRock Investment Managers Pvt Ltd said, “This research was part of our Winvestor initiative to gather crucial data that can be used to spread awareness regarding financial independence amongst women.

We hope that this study is an eye opener to the alarming lack of women’s involvement in making their own investment decisions; and motivates them to take more interest in managing their own money.”

‘Winvestor’ is an Investor Education Initiative by DSP BlackRock Mutual Fund that aims to encourage women to start taking well informed financial decisions on their own by encouraging them to meet an advisor and to get interested in their personal finances.

What do you think about this survey and study done ?

Why Investors are from Mars and Financial Advisors are from Venus

Posted on by Jagoinvestor

This article is a must read for every investor and financial advisor. The best part of this article is that it is about YOU (the investor) and it is about them (financial advisors). I and Nandish always discuss how financial advisors cant live without investors and vice-versa, but still their world are very different from each other. Both Investors and Advisors think very differently. It is extremely important for both to understand each other’s world and that is what today’s article is all about.

Right now I think advisors and investors both share love and hate relationship and the world of investment is structured in such a way, that they are inseparable. Even if they want, they can’t avoid having interaction or association with each other. Their thought process are at times very different, they view the game of investment from completely different place. Just imagine How magical the world can become if these two entities engage powerfully?. What can happen if they come on the same page and start to respect each other’s world. Such oneness can spread prosperity all over.

Before I write further, I want to make one thing clear that the world right now is full of good and bad financial advisors and investors both.

Step into Each Other World

Unless both Investor and Advisor step into each other world, its really not possible for help and co-exist with each other in a happy way from long term basis. This article is like ticket for both advisor’s and investors to step into each other’s world, it is an opportunity to embrace each other’s world and to accept their mistakes or the damage that they have done to each other’s world.

From last few months, We have closely observing and interacting with both advisor’s and investors community and have come-up with some differentiation. Some of the observations, you might agree and some of you might not. No need to react to them, but just see if you agree to them or not.

Investors and Advisors difference

The intention of this article is to help you get in touch with each other’s world. Let us know what you think about this ?

Get your Income Tax Return Prepared by TRP at Home for FREE

Posted on by Jagoinvestor

Do you know that Income Tax Department offers your tax filing services at your door step with help of a trained and certified professional who can help you with tax filing and in many cases totally FREE of cost or at a small fees ? Let me introduce to the concept of TRPS (Tax Return Preparer Scheme) . Just like you have CA , you have something called as TRP or “Tax Return Preparer” trained by Income Tax Department for helping a tax payer in preparing and filing his income tax returns.

TRPS Tax return preparer scheme

What does a Tax Return Preparer (TRP) do ?

Mainly a TRP (Tax Return Preparer) helps a person to file his income tax returns. But lets see it in detail. Mainly a TRP shall

  • Prepare the return with due diligence;
  • Affix his signature on the return prepared by him;
  • Furnish the return with the Assessing Officer having the jurisdiction over the concerned assessee or to any other officer or agenc as may be directed by the Resource Centre with the approval of the Board;
  • Hand over a copy of the return to the person whose return is prepared and furnished by him;
  • Retain a copy of the acknowledgment of having furnished the return;
  • In respect of returns prepared and furnished by him during a month, maintain record of the following, namely
    • the name of assessees whose returns of income have been prepared and furnished by him during that month;
    • the permanent account number of such assessees;
    • assessment year;
    • date of furnishing the return;
    • acknowledgment number;
    • jurisdiction of the Assessing Officer;
    • amount of income declared in the return;
    • amount of tax payable;
    • amount of tax paid;
    • The fee charged and received by him

How to Find a TRP for yourself ?

Note that you can find a TRP in your home town or near you and he will visit your home/office and do all the work for you. You can visit this webpage and find out a TRP in your city. Or you can fix an appointment by filling up this form and a TRP will call you back to confirm your appointment. Even if you are doing everything on your own and want some help on filing your ITR (download this ITR FAQ guidebook), you can tax online help by asking question here and you will get back a call for help.

You can also call the helpline at 1800-10-23738 or mail to [email protected]

How much does a TRP charge as Fees ?

Now this is a little interesting and you should know this. Income Tax Department knows that most of the individuals do not file their ITR, because they have no idea how to do it and hence they either dont pay tax or just keep delaying it. So if someone knows that he will get help in filing the Income Tax Return (ITR) at his door step, the chances are many people will give it a try and hence the tax revenues will go up for Govt.

So Income Tax Department pays incentives to TRP for every returns filed by them. The amount of incentive depends on how many tax returns you have filed till now . If you are filing it for the first time, then the incentive is 3% of the tax paid . If a person is filing his returns for 2nd time in life, then its 2% incentive and for 3rd time its 1% . The higher incentive is given when someone files his return for the first time, because its his entry into tax filing world and generally people shy away from that first time only. A TRP will not get any incentive from govt if a person has already filed his returns more than 3 times. So in a nutshell, TRP’s incentive is directly linked to how many more tax payers they can add to the pool of tax payers.

Upto Rs 250 as charges 

However TRP’s are also allowed to charge upto Rs 250 from the income tax payer if he wants to . So some TRP’s charge the fees and some dont if they know that their incentive will cover their charges.

To explain to you with an example. Lets say if a person has paid Rs 20,000 as income tax. Then as an incentive , a TRP will be 3% of 20,000 – which is Rs 600 . Now a TRP might not charge you directly because he anyways is going to get it from govt, or if he feels – He can still ask your for some money as fees (subject to maximum Rs 250) .

However lets say your income tax payable is just Rs 2,000 , in which case 3% of 2,000 is just Rs 60 and surely the TRP will ask you for his fees . However its always a good idea for you to know how he is being paid so that you can tell him and get it negotiated. But I think if they do a good job, there is nothing wrong in paying their small fees , at the end they give you door step service.

Note that these TRP’s are actually trained by Income Tax Department with help of third party companies like NIIT. This step was taken by Income tax department to raise awareness level of tax filing among tax payers, to give them door step services and at the end help in generating self employed through this scheme. There are various TRP’s who have filed tax returns for thousands of individuals and now serve a big client base.

3 reasons why you enjoyed Pocket money more than your Salary !

Posted on by Jagoinvestor

Just put your hand on your heart and ask yourself what did you enjoy more! – Your Pocket Money which you used to get or your current Salary? I have asked this simple question to many people and the majority of them said “Pocket Money”. Yes, that is the answer I have got!.

That small amount that we used to receive from our parents or guardians was managed very well by us. We had very little knowledge about money or anything in life, but still, we were highly effective and careful with our pocket money, compared to what we are today with our salary or overall financial life. A lot of you might be giving pocket money to your kids or to some family members, just see how effectively they are with managing money. Here are 9 tips to make your kids respect money

Pocket Money vs Salary

Why we enjoyed our pocket money compared to Salary?

Here are some of the reasons why we enjoyed and took care of pocket money in a much better way than our salary today are as follows.

Reason 1#: You were so excited to receive it

The amount was not important but we were excited to receive the pocket money that we use to get. When you receive salary you feel – “That idiot is paid more than me, this company really does not care for me, I am really underpaid”. All these conversations inside your mind actually kill your excitement. You are unable to enjoy the money that comes into your life and obviously you can’t manage what you are not very excited about. As kids we never compared, we loved what we got, we were so content. We would put a small amount in our piggy bank and would make the most out of the money that we received. The pocket money was a GIFT!

Reason # 2: We were absolutely clear on what we will do with our pocket money

When the mind is clear it helps you take good decisions. Each month we knew what we will do with our pocket money. Before the pocket money came in our pocket, we knew where it’s going to go and how much!. We knew what to buy from our school or college canteen? How many movies we can watch? What to buy for our friends on their birthdays? It was making the most of the resources that got into our life.

Reason #3: We were accountable to someone

At the back of our minds, we knew that we are answerable to someone. We were accountable to the people who gave us pocket money. I remember buying stuff from my school canteen was so much fun. Today you are not accountable to anyone in your financial life. You start your SIPs without asking anyone and even stop or redeem them without asking anyone. I always suggest our financial coaching clients get accountable in their financial life. I ask them to see their spouse as their co-pilot. Imagine your wife won’t allow you to step into the house until you buy your term plan? Imagine your wife won’t allow you to enter the house till you don’t start your investments? Can you see the rigor it can bring into your overall financial life?

Pocket Money vs Salary – The Experiences and Feelings

When I get on a call with my clients, I keep asking them to share with me what kind of feeling they had when they got their pocket money and when they used to handle it and the same thing for the Salary they get. Here is the kind of responses I get from them. I am sure these would be true even for your case.

Pocket Money vs Salary Comparision

We want you all to do this exercise. Make a table and on one side write your experiences with your pocket money and on the other side your salary.

Here is an amazing sharing from a reader Pankaj Kapadia on his experience

When I had Rs.500/ in my pocket.in 1993…I used to feel that i was richest man on the earth. I could buy pepsi Rs.2.5/-, watch movie 15/-. have bhelpuri 3/- . Give party to all friends 100/- travel by bus Rs.2/- and still had funds. Now with 50k salary and 20k emi, 8k school fees, 5k maintainance , 20k groccery bills I am left with nothing. From life of my own now I have kids and wife to look after along with parents. I am responsible for 4 more financial dependents and hence all their dreams are mine. Their education, clothes, entertainment, illness are mine.

I agree pocket money gave me more satisfaction and salary less. I also admit my son with rs.100/month is much more happier than myself. It has more to do with carrying responsibility on my shoulder. My dad did for me and I must do it for my childrens

Conclusion

It is really not important how much money comes into your life what really matters is how happy you are to receive that amount and how grateful you are with that amount and what exactly you do with the financial resources that come in your life because that’s what is in your direct control. The experience we had while we received pocket money and our first salary was the same, we can choose to have similar experience all our life if we want to. Today the good news is that you are your own boss and the bad news is that YOU are your own boss in your financial life. Report to someone what you are doing and not doing in your financial life.

We have created 100moneyactions.com program so that you can be dedicate your 20 weeks for your financial life and complete almost all your financial life actions pending till date. This will really bring in a lot of accountability and will source your financial life with action. Do share how you are going to bring in a NEW level of excitement in managing your salary money the way you use to enjoy your pocket money.

This article is written by Nandish Desai.

10 tricks you can play to avoid unwanted marketing calls from Financial Companies

Posted on by Jagoinvestor

We all get unwanted calls related to credit card, insurance plans, newly launched policies, to upgrade our prepaid connection to post paid and god knows what all. I am generally regarded as a “super-cool” kind of guy within my group, these callers even try to break that good part of me. However, over the last few years, I have realized that no matter what you do they still come back to you with full dedication.

Tricks to Avoid Unwanted Marketing Calls

When I posted one simple trick on my facebook wall to get away from these calls, people connected to me reciprocated back with few other tricks which they try to shoo away marketing calls. Let me share those with you, so that next time you get that unwanted call asking you for making some investments or taking some policy or whatever reason, the chance they will leave you for next few months increases.

10 tricks to avoid Marketing Calls

Before I share those simple tricks with you (which are actually shared by others with me), I want you to know that the callers will only leave you when they come to know you are a “worthless guy” or you irritate them to the core.

Trick #1 – When you get a random call from banks, insurance companies for “a special offer only for you” . Tell them – “Sir, I lost my job yesterday” . You will instantly become UNTOUCHABLE for them .. and they will leave you in peace (for some months at least)

Trick #2 –  And if a life insurance agent calls I tell them my wife is a LIC advisor. In my case, he blacklists it immediately. There is no second call

Trick #3 – I just put my phone on loudspeaker mode and keep it aside…I put in an ok intermittently… finally the other person gets bored and hangs up…!!! Donno if the job lost trick would really help, but I would listen to the offer for sure !!!

Trick #4 –  I just say I’m not interested in marketing calls and request them to add my number to their blacklist. Again if someone calls me with same request I threaten them saying I am going to raise a complaint. This has worked well for me.

Trick #5 – Once I told them this is a police officer and a body is in front of me. have u killed him/her ?

Trick #6 –  I got a call from ICICI Bank selling credit cards. I denied and he asked for a reference. I gave him the mobile number of their CEO whose contact I had from a meeting 2 yrs back

Trick #7 – When they ask “How are you today?” Tell them! “I’m so glad you asked because no one these days seems to care, and I have all these problems; my arthritis is acting up, my eyelashes are sore, my dog just died.”

Trick #8 – If they say they’re John Doe from XYZ Company, ask them to spell their name. Then ask them to spell the company name. Then ask them where it is located. Continue asking them personal questions or questions about their company for as long as necessary.

Trick #9 – Tell the telemarketer you are busy at the moment and ask them if they will give you their HOME phone number so you can call them back. When the telemarketer explains that they cannot give out their HOME number, you say “I guess you don’t want anyone bothering you at home, right?” The telemarketer will agree and you say, “Now you know how I feel!”

Super Trick #10 – Tell them – “Wait a minute, can you hold on for 10 sec … and then pass it on to your 2 yrs old kid and ask him to talk to Uncle”.

Watch this youtube video below ( and you will get some good ideas on what to do?

Ashish shares his incident

Also it reminded me my interesting conversation with one of the tele caller, when she called me to ask if need Credit card from her bank .. I was going to railway station in my office cab and was getting bored in cab as it was not my usual cab route when this call came on my cell.. I listened and interacted very carefully what she had to say for trying to get me signed for credit card.. Replied all her queries about salary, work info, company info etc without allowing her to realize that all details were fake .. then she explained what all documentation was required in order to apply for this credit card.. I then asked her many questions which made her believe that i am really interested.. However she got shocked for my reply when she asked me: Sir, when shall i send my executive to collect all the documents?
I replied in very sweet and simple voice: Next year M’am :P .. She took a pause for few seconds before she realized what had happened, then she said thank you (in frustration) before disconnecting the call …

I was on speaker phone for this conversation and I did not realize that my colleagues were listening my conversation with this lady, until, they all burst in to laughter listening my reply for her last query ..

I made sure that i stretched this conversation for at least 40 mins so i could cover most part of my destination :) ..

Link

Pramod shares his daring incident

Once I get a call from ICICI to buy insurance (ULIP) though I did not want to buy but I was free so to pass time I asked the girl why should I buy insurance. Her reply was that you can save for my children and if something happens to you then your wife & kids will get money. She told me that it is a must for married men to buy insurance. Now it was my turn I told her that I am unmarried (I lied ;-) ) so she said “aap shadi to karoge hi to insurance to reqd hi hoga” I asked if she was married on which she said no. Then I asked “Madam aap mujh se shadi kar lo. Engineer hoon, 6 Foot ka jawan hoon, Kamata bhi hoon. aur tab mujhe insurance bhi chahiye hoga” Shockingly she said “Sir, why are you joking.” I said “no! I am serious. It’s a win win situation. Mera ghar bas jayega aur aapki policy bik jayegi. So when can I meet your mother? ” She put up the phone & since then I have got no call from ICICI.

Link

Sunil Date shares his amazing incidents

I got a phone call asking me if I required a loan. (Old days not now). I replied ” Yes I am intrested in intrest free-non refundable loan. ” Unfortunately the poor thing could’nt understand the joke.

I got another call from a tele caller. She ” Sir your number has been selected by a lottery and you are invited to such & such hotel on ..at .. for a presentation. And a free gift is awaiting you”. I ” If you want to give me a free gift then why don’t you visit my office and give it to me ? I will visit the hotel for the presentation after seeing the gift” .

I got another similar call . She “Sir you number has been selected by a lottery and you are invited to such & such hotel on ..at .. And a free gift is awaiting you.” I “Will you be there ?” She flustered ” No sir. My boss will be there” I ” Then I am not intrested”.

Link

Note – We understand that marketing calls are made by people due to their job and target pressure. We in no way disrespect them or trying to make fun of them. With this post, we just want to communicate the pain the other side goes through and few tricks shared by others to avoid those unwanted calls.

Do you have any incident to share with us?