Category: General

Shocking ! – Job Rejection due to Bad CIBIL Report

Posted on by Jagoinvestor

Your credit score is going to affect your Employment. You can face job rejection due to it! Yes – that’s happening already. A lot of companies especially Finance and Software Companies have started asking candidates to present their CIBIL report and score (or any other credit report) at the time of the interview and it has started playing a role while selecting a candidate. So if your credit report is bad because you have not paid your loans on time or if you settled your loans in past, you might get rejected in your next job interview provided your prospective employers look at your cibil report/score. Note that it’s standard practice internationally to check credit score before employment and various other purposes.

Employers looking at cibil report at job interviews

3 Real-Life Example of Job Rejection due to Bad Cibil Report

I am sharing with you 2 real-life example’s where credit report was asked before the interview and they were eventually rejected (there can be other parameters for rejection apart from the bad credit report)

Example #1 – How Sapan has rejected a job in HDFC

Sapan a reader of this blog faced job rejection twice by HDFC Bank and an NBFC just because there was a credit card dispute on his credit report and he could not convince them that it was his fault.

I lost the Job twice in HDFC Bank even after got selected for Relationship Manager but rejected by HR team because of my credit card dispute which was stolen and unauthorized transaction took place of 50000/-. In the end of the day I was failed to convince the HR team and I was forcefully to pay 50000/- and got a job in one of the NBFC which also checked my CIBIL before getting job. – from facebook comments below

Example #2 – Rejection by Indian company for a Bad Credit Report from the US

Even those who are coming from US to India and looking for Jobs, employers are asking their US credit score – Here is an incident which happened with Nandish’s friend, this sharing was from Nandish

He was in US for almost 8 yrs. During that time he created a lot of debt for himself. His job transfer got him back in India, he knew his credit score in US is bad and he never bothered about it as he thought now he will be staying in India. His job was going on well and his life was comfortable. On one fine day he decided to quit his job and started his own business. He could not make it in business, his social responsibilities forced him to get once again in job. He started applying in different companies and finally one Bangalore based company offered him 16-20 lac pay package. He was excited and thrilled to get this offer. This company was US based and one of the most important criteria they would check is their US credit score…My friend tried hard to convince them but finally he was not selected. To improve his US credit score he is now really working hard but nothing seems to be working for him.

Example #3 – How an Indian Bank asked for CIBIL report

One of the readers was asked for her CIBIL report when she applied for a job in an Indian Bank, She applied for CIBIL report and handed over to the bank, the bank has not followed up with her after that.

I have applied for a job in bank and they have to check my CIBIL. I have a loan taken just 2 months back and only one installment hit my a/c thru cheque and tht was honored. Bank want to check my CIBIL before hiring. I haven’t had any bad experience but ya this is first time my CIBIL gonna check… and might be there is some problem according to bank ppl as they have not reverted me after my cibil check.

Quotes from some of the latest articles on media

  • If you thought you had only to worry about banks getting hold of your credit histories, there’s more. Of late, employers too have been asking prospective candidates to submit their Credit Information Report from CIBIL. Your employability could be affected by the report, as it happened with an acquaintance of mine, who was refused employment in a bank because of his poor credit history. Would you rather pay for your mistakes at a later stage in life or plan for those loan EMIs and pay them on time? – source
     
  • Some employers may also ask a potential employee to submit his/her credit report during the hiring process. Those with poor credit scores may be rejected in favor of those who have demonstrated better financial planning. Thus, the credit score and report may become a vital ‘reputation’ collateral even for employment in the future. – Source
  • Companies in western nations are known to make credit checks before taking people on board. In India, companies have started checking the creditworthiness of an individual, especially for senior-level hiring. Employers ask the candidates to produce their credit report at the time of interview because employers cant access it directly.  The trend is picking up in financial and IT sector companies. – said Harshala Chandorkar, senior vice president, consumer relations, Credit Information Bureau (India) Limited (Cibil). – Source 

Why Do Employers want to check your Cibil Report?

If you think for a minute and try to understand it from an employer’s perspective, you will realize that there are some reasons why employers might want to look at your CIBIL report before they hire you. Here are some –

1. It’s part of “background check”

A very valid point can be that checking your credit report or score can be seen as a part of “background check” . While there are genuine reasons why some innocent guy had a bad CIBIL report, a person having a bad CIBIL report can be seen as an irresponsible person and not capable of taking care of things. Just like no company likes to hire someone who has a criminal record, in future even having an extremely bad credit report can be seen in that way.

2. Bad credit record might indicate bad intentions as general

A person having a bad credit report might not be seen as an honest, credible person to work with and he/she might be seen as a potential threat to the work environment. While this is a big debatable topic – look it from employers point of view, they see things in a very defined manner, if the company policy tomorrow says that we will not hire someone with any person whose credit report has a WRITTEN OFF status on a loan, or has a score below 650 , then even those who are innocent and have got a messed up report will feel ask if its unfair, but companies go as per their framework and rules defined, not case to case basis.

3. High debt trap might lead to bad performance

If you have a huge debt on your head, it’s really tough to give your best at work. This is exactly how employers can see it, even though you disagree with it. It has been known that financial issues have a big impact on professional life, you might not concentrate fully if you are in a financial mess and paying off your debt is consistently on your priority list each and every moment.

Bad credit report leads to job rejection in interviews

Is the CIBIL report being checked by all employers and sectors?

As of now, looking at credit reports while the interview is a very new trend seen in India. It’s not widespread, but have started happening. So you can safely assume that it will be a regular process within some months or years. As of now, CIBIL Report is checked at only senior-level interviews especially in Financial and IT sector, but soon this will be happening across sectors and all levels. Employers can not directly access a candidate credit report because RBI guidelines allow credit bureaus to share it only with banks and financial institutions who are clients of CIBIL, hence Employers ask the candidate themselves to present their report when they come for an interview.

Note that credit reports are just one of the parameters being checked by the employers, it’s not the only basis for job rejection. Apart from the credit report, other main and important parameters like job qualification, experience and salary expectations will also matter while hiring, a credit report is just a part of the whole process.

Who else can use Credit Report and Score in coming future?

In an email reply to me, Harshala Chandorkar – Senior Vice President – Consumer Relations of CIBIL shared with me that credit reports can enter our lives in a big way in the future. In future landlords may demand a credit report before renting out an apartment and even telecom providers can see your credit report to assign the limits for your usage, but this can happen in the future, not very soon. Here is what she said in an email reply to me

In more developed economies, an individual’s credit information report and credit score is critical reputational collateral and is being used for multiple purposes by various institutions. Employers review it before recruiting a new employee; landlords require it before renting out an accommodation and of course telecom providers check an applicant’s credit history for assigning limits.

We may see similar evolution in India when a person’s credit report and credit score will be imperative for a lot many things in addition to availing institutionalized credit facilities. Therefore it is very critical for students to maintain a good credit history and pay back the loan dues on time.

Share this information with your friends (you can share it by clicking on the “Share” button on the left side) and let them know about it, they will thank you. Also, let us know – What do you think about this about job rejection due to the CIBIL report? Do you feel it’s going to help us all? Do you think it’s fair to check credit reports by employers in job interviews?

Results of Personal Finance Quiz – with answers

Posted on by Jagoinvestor

I took a personal finance quiz last week, in which close to 1,000 people participated. It was amazing to see the participation and the way you guys took the survey. I am now publishing all the questions with correct answers and the explanation for the answers , along with some observations (results and how different income group, profession performed in it) . Each answer had a 1 mark , so someone who answered 4 right out of 10 , has a score of 4/10 .

Personal Finance Quiz was tough

I did not want to make a simple quiz, so I had designed the questions in such aq way , that the answer which comes to mind immediately was not correct , the right answer was a little hidden one and not easy one . Hence you might see that the answer which naturally came to mind was actually a wrong one , the right answer was a little tricky one.

Some Observations from Personal Finance Quiz

  • The average score of all the quiz takers was 3.48/10 .
  • 94% quiz takers could not score more than 5/10
  • 50 people who were extremely overconfident and said “All 10 questions are correct” , all of them scored below 5 , and the average score was 2.84 out of 10
  • The high income earners were the worst performers with average score of 2.69/10
  • One of the worst performance was from software professionals with average score of 2.91/10
  • Only 27 people were able to score more than 7/10 and just 4 person scored 8/10 . Most of these people had income less than 5 lacs and they thought they had “more than 5 correct answers” , but not all correct.

Answers for the 10 quiz questions

Here are all the 10 questions from the quiz and their answers with explanations. You know what was your answer and hence you can find out what was your score exactly.

1. If you have a bad remark in your cibil report ? What is the maximum tenure it will be there and after that it will be removed ?

Right Answer was There is no upper limit on this . I was sure that a lot of people will choose the answer as “7 yrs”, because they had heard that number “7 yrs” as being the limit after which the bad remark from CIBIL is removed, but its again a myth ! . Yes – you will be shocked to hear this, but 7 yrs is the MINIMUM time-frame for which bad remark will appear, its not maximum. In the question, it was asked for the maximum limit, and right now there is no maximum limit. I was on a phone call with a senior person from CIBIL, and she told me that right now there is no decision on what will be the maximum limit, so on the higher side, the bad remark on CIBIL can be for even 15-20 yrs , you never know , but for sure it will be there for minimum 7 yrs . Now understand that this is when you do not do anything about your Bad remark , if you pay off your outstanding or pending debt , then it will be cleared of, Read this article on how to improve your cibil score and Report

2. CIBIL score is calculated based on past how many years credit history ?

Right Answer was 2 yrs . I was not very surprised when most of the people chose 3 yrs as answer. It must be because they are aware that the CIBIL report contains your last 36 months of history , it has all the data about how much was outstanding and how much you paid. But your credit score is only dependent on past 24 months credit history only, whatever would be the algorithm for calculating the credit score, only past 24 months of data is used.

3. The money you withdraw from your Endowment policy after the 3 yrs lock in period is Tax Free 

Right answer is True.  As per the revised rule, any surrender value from Endowment plans are tax free after 3 yrs, but earliar it was 5 yrs, now its changed  (This answer was updated later)

4. If EMI for 20 yrs – EMI for 25 yrs = EMI for 25 yrs – EMI for X yrs , what is X

Right answer is None of the above . The other 3 options was not a right answer because X will depend on the interest rate value, If the interest rate is a number which is like 10% or something , then the X value will be infinite, but X can actually be 100 yrs or 200 yrs , if interest rate is very small like 3-5% (test your self), hence the answer is it purely depends on the interest rate. You can check this using the this EMI Calculator .

5. Ajay bought a house in Nov 2011 and paid stamp duty of Rs 50,000. Now its June 2012, and his friend recently told him that stamp duty can be claimed under sec 80C. How much of Stamp duty out of 50,000 paid can be claim now ?

Right Answer – He can not claim Stamp Duty Under 80C now . The simple rule is that Stamp duty can be claimed under 80C, only in the financial year its paid.  If you see the question clearly, then you will see that Ajay bought the house in Nov 2011 (that’s 2011-2012) , hence the 80C benefit for stamp duty can be claimed only for 2011-2012 . But the question says that now its June 2012 when Ajay’s friend tells him about the stamp duty thing , now the time has passed, he cant claim it back now .

6. Father creates a Fixed Deposit on his child name for Rs 10,000 @10% interest rate. Next year who will pay the tax on the interest amount of Rs 1,000 , if child has no other income source

Right answer – No one will pay income tax . I was sure people will confuse this with the income tax clubbing rules, which says that income of minor will be clubbed with the parent who actually invested the money, but here if you see the income for the year is Rs 1,000 which is from the Fixed Deposit on child name, and what many people might not be aware is that, as per section 10(32), income upto 1,500 per child is exempted from income tax clubbing . Only income above Rs 1,500 will be clubbed, which means that a person can make FD’s on their child name and interest upto 1500 will be treated as purely child income and no tax will be paid on that. This is one of the tip you can use to save small tax on the income from investments .

7. Ajay’s age is 25 yrs right now , His birthday is coming next month, but he will not be able to take his term plan before 3 months, Why should he worry ! 

Right answer was There is nothing to worry about . Its because Life Insurance calculations considers the “nearest” birth date, not the next or previous one. So in this case Ajay’s birthday was coming next month, so whether he takes a term plan before 2 months of his birthday or after 2 months, it does not matter, his premium will be same, because his age will be considered as same. Now this has become a standard way of calculating the age, but there might be 1-2 insurers who are still calculating it on the completed age.

8. Ajay sold his land after 9 yrs, but still suffered a capital loss of Rs 8 lacs, In order to save the tax on that, Ajay had also bought some shares 2 months back which have appreciate a lot . He sold them at a profit of Rs 3 lacs, Which option is correct now?

Right Answer was Ajay can carry forward 8 lacs of capital gains loss for next 8 yrs . The first point is that a capital loss can be forwarded for next 8 yrs, not 6 yrs. The other point is that most of the people must have offset the 8 lacs long term capital loss with 3 lacs of short term capital gain, and thought that he can forward only 5 lacs of capital loss, but they forgot that a Long term capital gain loss can not be adjusted against Short term capital gain (a short term capital loss can be adjusted against both short/long term capital gain) . Hence he can fully carry forward total 8 lacs of capital loss for next 8 yrs.

9. You can file an RTI and get information in respect to ?

Right Answer – Both SBI and PPF . All the govt departments comes under RTI act . As PPF comes under Post Office (Govt of India undertaking) and SBI Bank (a govt bank), both come under RTI , and in the same way all the PSU banks like Bank of Baroda , Canara Bank, Bank of Maharashtra etc also come under RTI , in-case you are facing any issues which you wants answered, you can file an RTI application and get your queries answered. Look at this example of how can file RTI for your EPF (Employee provident Fund) queries.

10 Ajay family consists of Brother, Wife and Mother. Ajay holds a Demat account (nominee is brother) and a Joint bank account with wife (nominee is mother) . Now Ajay and his brother both died in an accident , Ajay had not written any WILL . Which of the following is true ?

Right Answer is Demat will be claimed by Mother & Wife, but Bank account will be claimed by Wife Only. It was simple, but confusing. When a nominee dies, its as good as no nominee. Hence The demat account will be considered to have no nominee, which means the hindu succession law will apply in this case as there is no written will, and the demat account will be equally claimed by Wife and Mother (both class 1) . However the bank account will just go to wife because its a joint account, hence the second holder reserves full right on the bank account after primary holder death, the nomination or WILL has nothing to do here, because nominee and Will comes into picture only after both the holders death.

Prize for Top winner of Jagoinvestor Wealth Club

Out of the 4 people who scored 8 , We are picking one random winner , who is Mr. Rajasekaran, and we would like to offer him 1 yr free membership of upcoming Jagoinvestor Wealth Club, which is a paid product . Not disclosing much on what it is exactly, wait for it ! .

How do you feel now

Truely speaking, the personal finance quiz turned out to be very good and I really enjoyed it . You must have see how you quickly answered few questions and got them wrong, you must have spent some time to read them carefully :). This quiz was also designed so that you can see yourself that where you stand when it comes to personal finance and understanding the internals of it. Would love to hear how you feel after knowing the answers, do you feel you were overconfident with your knowledge ? Do you have any confusion in the answers of these personal finance quiz questions and would like to understand more ? Please leave your comments .

Personal Finance Quiz to test your Knowledge – 10 questions

Posted on by Jagoinvestor

How much do you understand personal finance? You must be reading this blog from last many months or years, now let’s see how much you know. We have designed this short 10 question personal finance quiz to see your knowledge. Just answer these 10 questions and pick and answer from the drop-down. I will post the answers and scores very soon. Please write your full name when you enter your answers.

The quiz is over and Results are declared here

Direct link to Quiz here

Charity Week – Break your Attachment with Money

Posted on by Jagoinvestor

We are all living in a world where we are conditioned and functioned to GET than to GIVE. Since childhood, I have been trained to focus more on getting than on giving. Getting good grades, getting admission in a good college, getting good placements, getting awards and getting good salary packages.

Charity in India

We had some realization that we would like to share with each one of you. We saw that the other side of getting is GIVING. The world of giving is much more magical than the world of getting and with this charity week, we would like each reader of Jagoinvestor to get in touch with the magic of GIVING. Tell me honestly, why do you get on Jagoinvestor – to get or to give? I am not saying getting is bad, it is important to givers so that they will have more to GIVE more. Some of you really take out time to forward good personal finance articles to your friends even if you know they wont read because you care for them.

Let’s not get stuck in the rat-race because even if we win, we will end up as a RAT. We are not saying become a saint, all we want to point out is that, as an investor you are much more than your bank balance, you are much more than your investment portfolio and the returns that you get. We want you to realize how wealthy you are in this moment.

ROI of your Life

With Charity Week, we want you to get in touch with the ROI you are going to get from YOUR LIFE and not just from your money. A Go-giver will always have highest ROI from his life because he is more of a contributor than a consumer. You experience life at its peak when you are a giver and not a taker. Three messages we learn t and we would like you to learn from Charity Week are:

1. Connect with power of Giving

I was really touched and moved when Manish shared this experience with me. Manish and his wife were traveling from Pune to Mumbai. When the bus got on expressway, the conductor found one villager in the bus who was not having money to buy the ticket. It seemed as if he has got into a wrong bus by mistake. As per the rules the conductor asked that person to get down from the bus. Everyone in the bus was watching what was going on and in that moment Manish and his wife decided to talk to the conductor. They told the conductor that whatever is the fair we will pay but allow this person to travel, don’t drop him on such lonely highway. Manish and his wife paid for that person’s ticket and conductor finally allowed that villager to travel. That villager’s eyes got wet and it carried immense acknowledgement for Manish and his wife. In that moment, Manish experienced some magic and that is the magic we want each one of you to get in touch with. When you a giver you operate from service and help someone.

The big lesson here is – “It takes an open heart to help someone and not a lot of money”

2. Wealth isn’t the end, it’s the beginning

One thing that we have realized is that wealth is not an end but it is always a beginning. I have a small garden in my backyard and I invest (notice I don’t spend time I invest my time) some time every day to be with nature. Any garden is initially a patch of land and then you plant a seed or a sapling, we start to give that seed all the Wealth of water, Wealth of fertile land and Wealth of sunlight, that is how the sapling or seed starts to grow and on one fine day, it starts to give flowers and fruits. The fruits and flowers blooming is not the wealth, the wealth happened in the beginning. As an investor you also need to get in touch with the wealth you start as an investor. You always have wealth of actions, wealth of time, wealth of ideas, wealth of dreams, wealth of people and blogs that can help you understand about money. Your job as an investor is to nurture your financial life with the wealth you BEGIN with.

The big lesson here – Wealth is not the end. It is always the beginning

3. Break your attachment with money

We wanted to do this charity week long back but at that time I was not making any donations. My attachment with money was massive; I was focusing more on what I can get rather than what I can give. The world of giving is always a world of abundance. One of the things we have realized is that even if you take away abundance from abundance it still remains abundant. I never use to give money to any needy person thinking these people don’t work hard and we should not encourage such things. I never gave money to any charitable organizations thinking my money will get misused.

I had some realization some time back. My father took me to a GAUSHALA (A Cowpen). I liked the place, I also had some interaction with the person who was managing that place, he shared with me how people donate and contribute with an open heart. He was full of love and service and he had no expectations from me or from anyone. In that Cowpen you can adopt a cow with some annual fees. Something happened to me in that space and my attachment with money broke. I made maximum donation I could on that day and it was a very fulfilling experience. From that day I am looking for opportunities where I can help or serve someone.

The big lesson here : Giving is one of the easiest, most difficult things you will ever do.

I and Manish always discuss that no matter what your salary is or which mutual funds you invest or how much gold you acquire, unless you break your attachment with money you will never become wealthy.

What some Charity Week Hero’s did in this Charity Week

See what Sam did

These days, we are so attached to the money that we hardly care about people in need. Couple of years back, one day i went to a small railway station near my house in Bangalore for a morning walk. (It has a long and nice platform ;-) ). After a while i sat on a bench, a train came. I was observing the people and its amazing that these people get up so early in the morning , travel so long to do their jobs & I don’t think they get huge salaries. At that moment i realised how lucky i am, that i have a good job, i can earn money by working on a computer. I also realised that i am in a position to help many people in need. Since then i started very small donations to couple of organizations, and also i came across a micro finance NGO – http://www.rangde.org where we can lend the money to poor people who wanna do small business. I am a regular investor in Rangde.

See what Sainath did

I like Akshya Patra and contribute for the outstanding service they are offering. To come up in life education is necessary. But what good the education is if we dont have lunch during school hours. How will we digest the knowledge without having proper food. Akshaya Patra provides lunch to loads os school students which i think is a very good initiative. I totally support them and will spread their work to all.

See what Suhas has done

I have right away donated Rs 4200/- for child education through net banking to smile foundation India. I wanted to do this since some time but got the timing today with your donation week. I storongly belive that only education can uplift this country from all the mess we are in. Thanks for bringing up the topic. and offcourse it feels gr8……:)) Keep up the good work………

See what Aparna did

Recently, we had been to Shimoga (a place near Bangalore) to a temple. There are around 23 boys who are sponsored by the temple committee. When we saw the boys, we went ahead and donated money so that these boys get good food to eat atleast once in a year. We are also planning to donate some money in the next year for the same cause. Also, recently, we donated around Rs. 17,000 to a boy who wanted to complete his education. We donate atleast Rs. 20,000 yearly. Its our routine :)

See What Sushil did

I have been donating Rs.300 to UNICEF children’s fund every month. I was shocked to hear this would help 120 newborns for polio medication. And Rs.1200 would take care of a child’s expenses. Yes, our petty amounts make HUGE differences somewhere!. It also has other donation campaigns, where u can donate any amount you wish to give every month. I am increasing it sooner :) . In my hometown (Siruguppa) in Bellary district, Karnataka, I know a doctor who goes to villages teaching Dos and Donts, giving them free medication, helping them on monthly visits. I wish to donate some amount to his foundation soon.

See What Rajendra did

When you give without any expectation you get more. We experienced this when Rs 20400 has passed through our hands to reach Maaillu which takes care of 180 children who don’t have parents(www.maaillu.org) It is foolishness to feel that it is a donation- God gave us that great opportunity. We earned that money by doing another good work of helping others with the only intention of passing it to Maa illu. That extra work gave us real satisfaction than the giving, (giving became our duty). I feel that writing about charity is also the duty of you. I always remember the words of Infosys Narayana Murthy ‘ Power of money is power of charity’. As he said, We have to earn to give it away.

Our invitation to you in this Charity Week

We invite you to hear your call. Join the charity week with the most loving heart and do some charity in any organization of your choice. Make this week special make it an integral part of your life. It’s time to think beyond numbers, financial products and calculations. We want you to fix your life’s calculation first and the rest will happen on its own. In this week be of service to people around you, fill yourselves with a lot of love and help everyone around you. Do something special for all those who are serving you and you never ever noticed them! Be it your liftmen, your security guard, your office person, your helper at home, or just help some poor people

Fill the comments section with heartfelt experiences and sharing, let the goodness in you come out. Let’s master the art of giving. This kind of charity may have never happened on blog, lets create a world that works for everyone, let’s contribute and be of service to everyone around us. Make this charity week a piece of your heart and enjoy the wealth called ‘LIFE’.

Here is how you can make a start, following are few organisations where you can make a donation

Rs 1,75,000 already donated by 32 readers

We are close to thousands of readers on this blog , even if 10,000 people donate even Rs 500 , it would be close to Rs 50 lacs worth of help to someone. Think about it – do your bit .

Here is the form where you can submit your donation details so that we can measure as a blog how much money we donated and what difference we created in the world. If you are already doing charity share your experience in the comments section. Only the money that you will be donating in this week will be counted.

Just donate some money and let some money go out of your pocket for someone else. You will experience a very different kind of feeling which will be great.

Best Credit Card In India – Review of top 6 cards

Posted on by Jagoinvestor

Most of the people who apply for a credit card in India, do not pay much attention at the time of taking the card, but later get frustrated by the card itself for various reasons high bad customer service, hidden charges, and several other factors. The obvious question then is, which is the best credit card in India? We did a survey on credit cards and tried to do a review of credit cards based on participants experiences. We will see how these cards rate in 6 important parameters. There were 654 participants who took the survey, hence you can safely assume that the collective responses will give a near reality results.

Best Credit card in India

If you see the chart above you will know that the 6 top credit cards in India are –

  • HDFC Bank Credit Card
  • ICICI Bank Credit Card
  • CitiBank Credit Card
  • SBI Bank Credit Card
  • Standard Chartered Credit Card
  • HSBC Credit Card

6 factors to look at before you apply for Credit Card In India

Let’s see those 6 parameters which you should look at before you apply for a credit card in India. At the end of this article, we will see the detailed results of the credit card survey and find out how different credit cards performed on each parameter so that if some particular parameter is more important for you, you can just pick a card based on that parameter.

1. The interest rate charged on credit cards

The first parameter to look at while choosing a credit card can be the interest rate charged by the credit card company. It can range from 1.99% on the cheapest credit card to as high as 3.5% per month on the most expensive credit card. For most of the people who pay their bills on time, this parameter will not matter much, but you never know when you might get into a debt trap kind of situation where you start using your credit card to the maximum limit and pay the interest per month, at that point of time this factor will really matter. Note that interest rate charged is mentioned on a per month basis, but a small difference of 1% can be very big, considering it on a yearly basis.

For example, a 1.99% monthly interest rate actually means 27% Yearly and 3.5% monthly means 51% yearly CAGR.

51% yearly CAGR ! … means your Rs 1 lac of credit card debt can actually increase to 7.9 lacs in just 5 yrs if you don’t do something about it and obviously you will run around to improve your CIBIL score later!

2. Annual Fees & Other charges

A lot of credit cards charge yearly fees and renewal fees (at the time of renewal). Now a lot of people hold a Free credit card for lifetime, but that’s just bunch of people who were given the credit card on a telemarketing call, mostly because they are working in some big company and chances are higher that their usage of credit card will be much higher than an average customer, hence the free credit card.

But, a lot of people apply for the credit card themselves and for them, there are yearly charges (annual fees) and another kind of charges which is applicable to everyone. For example, the penalty charges if you don’t pay your dues any due date. There are tons of customers who do not pay their dues on last time and just pay the minimum payment. If this happens a lot with you, then there is a great chance that you also live with the myth of minimum payments on credit cards. So apart from annual charges, there can be charges like

  • Charges when you pay your credit card bill by cash in any bank branch
  • If you make a demand draft from your credit card
  • If you request for a duplicate statement
  • And many other credit card charges .. the list is not a small one 🙂

Note that if your credit card is FREE as of now, it might carry annual charges when it expires and you apply for renewal – and credit card company says – “Sir, we gave it 100% free only till the card is valid, now its renewed! “

3. Rewards and Offers on Credit Card

There are a lot of advantages of using a credit card in the form of benefits and reward points. For example – You get PAYBACK points which you can use to redeem at various places like www.bookmyshow.com, and book movie tickets by redeeming those points. You also get cashback benefits if you use the card at selected HPCL petrol pumps and you don’t pay the fuel surcharge too.

There are many other kinds of benefits that many credit cards in India offer and those can be different from one credit card to another. This is one very important factor before you choose a credit card because a big number of people just take credit cards for these benefits and even if you are not looking for these, you might want it in the future at some point in time.

4. Customer Service and Transparency

Once I called my credit card company (which is ICICI Credit card) because I wanted to know if there will be any annual charges on my credit card as the expiry date is over and I wanted to renew the credit card. They gave me a very clear and satisfactory step by step answer which made me feel – “Great” .

There was no renewal charges and no annual charges even after renewal. So I was happy. Now it was not the FREE thing here which made me happy alone, It was the way customer care talked to me and treated me like a human:).

While there are instances when I was not that happy, but overall on average, I would still rate the customer service of my ICICI credit card as “good” . Well, that’s my experience only and others can have a bad or worse experience with the credit card company. Before you apply for a credit card, you need to look at this very critical aspect of customer service and how transparent are they overall.

5. Convenience to pay the bills

Something which you will deal with each month is the payment of your credit card bill. Now almost all the credit card companies allow paying by net-banking, cheque, cash and other ways. But still, some banks can be really torturing and not that supportive. It can be cumbersome at times. There have been instances when people paid by cheque before time and it was not processed on time and the person had to suffer because of that and had to run around to get back those charges reversed.

Here is the example

I got the CIR and there is absolutely no big hiccups except one in ICICI bank credit card (I had lot of issues with this bank and some late payments od 1-7 days in some credit cards in very few months. Never listens customer and pathetic customer care executives) of which the DPD is consistently not (000) good for last 5 months. But hey it wasn’t my fault. I dropped the cheque of overall due (about 12000/-) and they never bothered to inform me that my payment was not credited (god knows what they did with cheque). After 5 months when they made a balloon of charges and the whole amount jumped to 19000/- they called me and threatened me of CIBIL. I was never in the mood to not pay the due hence paid the whole amount 19000/- notified by them. Could this lead to this much low score?? – Link

Not to mention the unfair update on CIBIL report which affects you for years. So it’s a critical factor to look at before you apply for a credit card in India.

6. How easy was it to apply for credit card

Have you gone through a frustrating time applying for credit card, really had to run around to get a credit card even when you were totally eligible to get one. While this criterion is not that big, as its a one-time event still you can consider it before you apply for one. I recently had a hard time opening a saving account for my brother with ICICI bank because they had no way to accommodate people living on rent with friends, however, Kotak bank did it for me, at that point of time, the “ease of opening the account” was really a big thing for me. In the same way ease of applying for a credit card can be one important factor at times.

Best & Worst Credit Card in India as per Survey

Below are the results of the survey which we conducted on credit cards. Have a look at it.

Best Credit card in India

If you look at the above chart you will see that the best credit card in India turns out to be Citibank Credit Card and the second best is the HDFC Bank Credit card overall. However, this does not mean that other credit cards are not good at all the parameters. ICICI Bank credit card is very close to all the other cards in several parameters.

While the SBI Bank credit card and HDFC Bank credit card top the list when it comes to interest rates charged (means they have lower interest rates compared to others), but HSBC Bank credit card comes last. HBSC bank credit card has not done well in any parameter as per the survey and has the lowest ranking in all of them.

Average Credit Card bill for the last 6 months

86% of people are paying less than Rs 20,000 per month as there credit card bills, that’s last 6 months average. Whereas only 2% of people had more than Rs 50,000 bills per month. I suspect that these people must be using their credit card for various mandatory expenses which are required anyways. Lots of reward points and benefits to them:).

Best Credit card in India

Credit Card Reviews from participants

Ramakrishna says on his Citi IOC Card – I am using credit cards from past 9yrs. If u use the credit card in the right manner, u get the most out of it. And make sure you pay your outstanding amount before the due date. Most of the times, by end of month I am barely left with the liquid and credit cards used to save during that bad times and used to pay the outstanding by the due date. I never ended up paying any interest until now. The best credit card to date to my knowledge is Citi IOC card. I had made use of the rewards and offers at the extreme.

Kriprabha on Axis Gold Card – Very, very bad – due to careless service. 1) Not pointing out auto-debit facility – I missed one annual fee, so from 300/- bill went up to 1000+. 2) Not applying their own rules about marking a lien on my FD Receipt — my card was blocked for weeks and no one seemed to know this requirement, and they kept assuring me the card would be activated soon. As of now, the card is inactive – reason unknown. I am snipping up a card today – want to avoid AMC which they will apply happily! These bankers live and work in air-conditioned comfort which is possible due to high ABQ. I will soon terminate my “relationship” with them. I am a senior, living on savings, so these visits to the bank cost a lot in auto fares.

Raghavendra on HDFC Credit Card – Experience with HDFC Cards has been good. I have never looked at the interest option since I’ve always paid the outstanding amount by the due date. Was charged a penalty a couple of times when I paid the outstanding a couple of days after the due date ( had not even paid the minimum amount by the due date, owing to travel), but the same was reversed after a detailed email to HDFC Cards requesting for the same, in light of good payment track record except for the 2 instances. On the rewards front, HDFC Bank does not have a very good rewards scheme as compared to others. But customer service is excellent. They also have two billing cycles, one of the 25th and the other on the 5th and allow customers to choose any one of them. This is useful for those who already have a card and choose a second to make optimum usage and take advantage of the alternate billing cycles

Atri on HSBC Credit Cards – I am using HSBC gold credit card for more than the last 7 years. I always submitted payments in time and even insured the card purchases. It was as good at their services and also at the part of mine but I do not know why in their review they decided to cancel my card and stop their services to me. I even asked HSBC CUSTOMER representative but they could nor reply satisfactorily. I now feel I should have to get a credit card from the Public Sector Bank only and wasted my time and money. My message to all public is to use Bank Account / Credit Card only of Public Sector Banks like SBI, Canara Bank, Central Bank of India, etc. for a good governance in the nation. Thanks and Regards.

Some more data out of credit card survey

  • Only 10% of people had 4 or more credit cards
  • Around 42% of people had exactly 1 credit card with them
  • The average number of credit cards held by one person was 2.03

Other Credit Cards

Note that this survey is focusing on top 6 credit cards and their comparison with each other only, which came out as the result of the survey, but there are several other banks credit cards in market which can be considered, but due to small amount of feedback in the survey, it was not sufficient to conclude anything about them nor do any kind of review about these credit cards. Here is the list of those other credit cards

  • Axis Bank Credit Card
  • Amex Credit Card
  • Kotak Credit Card
  • Bank of India Credit Card
  • Indian-Bank Credit Card
  • Bank of Baroda Credit Card
  • IndusInd Credit Card
  • RBS Credit Card
  • Syndicate Credit Card
  • Andhra Credit Card
  • Canara Credit Card
  • Corporation Credit Card
  • PNB Credit Card
  • ABN Credit Card

Did this article help you in choosing the best credit card in India? Is there any other parameter to look at before you will apply for a credit card? Do you think this survey helped you in choosing a good credit card in India?

Financial Literacy in School – very soon

Posted on by Jagoinvestor

Soon your children will start getting financial literacy in their school itself. A lot of developed countries like the UK, Netherlands, Spain etc have their national strategy for Financial education in place and a lot of other countries like India have been thinking and formulating this for a long time. Recently a draft for the financial literacy program was published on the RBI website.

You must have seen and experienced that our country average financial literacy is at pathetic levels and so many financial lives are destroyed just because they do not have minimum basic knowledge on personal finance to protect themselves. If your name is in CIBIL, its because you never knew the importance of right credit behavior, If you were missold (misbought) any financial product by an agent or financial planner (why not) – You probably always concentrated on numbers and not the hidden language and never were able to conclude the the returns from that financial product. In short you were not that financially literate.

The mission of the intiative is like this

To undertake massive Financial Education campaign to help people manage money more effectively to achieve financial well being by accessing appropriate financial products and services through regulated entities with fair and transparent machinery for consumer protection and grievance redressal.

You must probably be fantasicing that your kids will not be like you in terms of financial literacy and they will have a better level of information and understanding about personal finance compared to you. Thats where this national level initiative on financial literacy will help. It’s expected to be implemented in next 5 yrs period and you can be sure that it will arrive sooner or later, that will be a big day ! .

So what all your kids will learn about money in their Schools ?

There are 15 sections and sub sections defined and I can bet that even we all must grab the school level books on personal finance when it comes, because the list of topics to be taught is pretty good and deep. It will really help in shaping up the financial lives of those kids who study it. The best part is that as this will be school subject, they cant escape it. With their raw minds, they will be more open to learn it, unlike people today “who do not have time” . Once they learn about personal finance in school level, they will have a better chances of managing their financial lives when they start earning or well before it. Here are the topics (mostly spread across the full year) – Imagine something like “Hey I am bored in Maths Class, which is the next one” – “Personal finance Class!”

1. Money

  • History of Money

  • Barter System

  • Importance and Concept of money

  • Coins

  • Paper money

  • Plastic Money

  • E –Money

2. Household Economics

  • Earnings

  • Nature of Earnings

  • Needs and Wants

  • List your expenses

  • Find Simple ways to save money

  • Expenditure, Cost and Prices, Inflation

  • Savings & Thrift

  • What you save is what you earn

  • Borrowing – Mild Definition

  • Investment – Mild Definition

  • Interest — Mild Definition

  • Interest rate — Mild Definition

3. Banking

  • Definition

  • Role of a Bank – in growth of saving and Investment

  • Types of banks

  • Services offered by banks

  • Deposits and Loans

  • Types of A/c

  • Opening a bank A/c

  • How to Transact with banks

  • KYC norms – (A/c opening form, Address Proof)

  • How to read bank statement

  • Banking products and services

  • Net Banking

  • Calculating Interest –Saving, FD, Simple and Compound Interest

  • Power of compounding

  • Loans

  • Types of loans

  • Definition of EMI

  • Calculation of EMI

  • Difference between Banks and Money lenders

  • Micro Finance

  • How to make a complaint -Banking complaints

  • Ombudsman

  • Basic of Foreign Exchange

  • Importance and Use of Foreign Exchange

  • Check Counterfeit Currency

  • CIBIL

  • Regulator – Role of RBI

4. Investment

  • Piggy bank

  • Principles of Investment- Safety, liquidity and return

  • Bank saving

  • FD, RD, Post Office Savings

  • POMIS, NSC

  • PPF

  • NPS

  • Bonds and debentures

  • Shares

  • Mutual funds

  • Gold and Silver

  • Real estate

  • Arts and other investments

  • Commodities

  • Asset allocation

  • Risk and Return

  • Basics of Investment- liquidity, credit

  • Compounding and Time value of money

  • Nominal and Real Return(Inflation)

  • Effect of taxes

  • Long term v/s Short term

5. Behaviour Aspects

  • Concept of Needs and wants

  • Helping the needy

  • Spend wisely v/s waste spending

  • Conspicuous Consumption-lavish

  • Impulsive spending

  • What you save is what you earn

  • Using money responsibly

  • Avoiding cash payments

  • Insisting on bills

  • Dangers of excessive borrowing

  • Repayment of loans

  • Make informed choices

  • Ownership of your financial decision

  • Take care of your old ones

  • Tax payment

  • Insider Trading

  • Up Keep your Financial records

  • Free advise may be injurious

6. Financial Planning

  • Meaning

  • Household financial health check up

  • Important life stages

  • Education

  • Medical and other Emergencies

  • Social obligations

  • Goal setting

  • Budgeting

  • Marriage

  • Buying a house

  • Buying a vehicle

  • Plan a vacation

  • Retirement planning

  • Price of procrastination

7. Insurance

  • Meaning

  • Need and Purpose

  • Loss protection

  • Life ,non life and health

  • Benefits of Insurance

  • Term plans

  • Investment plans

  • Hybrid plans -Ulip etc

  • Agents, advisors

  • Role of Insurance companies

  • Regulator – IRDA

  • Ombudsman

  • How to take a new policy

  • How to revive old policy

  • Transaction cycle

  • Nomination

  • Assignment

  • Claims settlement
  • Exclusions
  • Difference between Insurance and Investment

8. Retirement and Estate planning

  • Concept

  • PPF, EPF, Gratuity, NPS, SCSS

  • Financial need after retirement

  • Three Stages -Saving, Accumulating and Dis-saving

  • Calculation of Corpus required after retirement

  • Protection from Inflation

  • Reverse Mortgage

  • Definition of will

  • Making a will

9. Securities markets

  • Entrepreneurship

  • Forms of Business enterprises

  • Company definition

  • Shares

  • Primary market – Reading a prospectus, what to read

  • Secondary market

  • Issuers, Investor and Intermediaries

  • Regulator – Role of SEBI

  • Dealing in Securities market

  • Demat account and Depository

  • ASBA

  • Broker

  • Stock exchange

  • Grievance and Redressal

  • Financial Advisor, CA, CFP, CPFA

  • Basic terms and processes in Securities Market

  • Market rumors and tips

  • Sources of reliable information

  • What are indices ( Sensex and Nifty)

  • Investment v/s Speculation

10. Use of Technology Do and Don’ts

  • Password protection

  • NEFT and RTGS

  • ATM

  • Online trading

  • Internet banking

  • Need for keeping mobile number with banks

  • Three in one account

  • Need of protecting your online account

  • Functioning of stock exchanges

  • Depository working mechanism

  • Algorithmic trading

  • Financial functions using excel

11. Scams, Frauds and Ponzi Schemes

  • Free tips

  • Insider trading

  • Money laundering

  • Phishing mail about winning a lottery

  • Price rigging

  • Dabba trading

  • Bogus companies

  • Multi level marketing

  • Schemes not regulated by anyone

  • Real Estate frauds

  • Banking and credit card scams

  • Preventive measures from getting duped

12. Borrowings Need for borrowing

  • Need for borrowing Source of borrowing

  • Merit and demerits of borrowing

  • How much to borrow

  • Avoid life of credit

  • Comparing interest rate on loan offering

  • Importance of timely payment

  • Avoid default

  • Avoid borrowing for conspicuous consumption

  • Credit cards – Merits and Demerits

13. Consumer protection and redressal mechanism

  • Rights of Consumers

  • Applicable to Financial services

  • Filing a complaint

  • Complain to entity concerned

  • Ombudsman

  • Regulators

  • Arbitration

  • Consumer courts

  • Govt. Websites -(PG Portals)

  • Investor Associations

14. Taxes

  • Meaning

  • Need of taxes

  • Types of taxes

  • How taxes impact income

  • Income, wealth and gift tax

  • Service tax, STT, Stamp Duty

  • Tax planning v/s tax evasion

  • Tax rates

  • Tax free bonds

  • Tax saving investment

15. Importance of maintaining financial records

  • PAN and its utility

  • Aadhar card

  • Demat Account

  • Bank statements and passbooks

  • Insurance policies

  • Tax return

  • Property documents

  • Helpline numbers of service providers

Note that this curriculum is also planned to be delivered to non-school people like adults through other various means. School is just one place where it will be implemented.

What do you think about this Financial Literacy Initiative ?

What do you think about this initiative ? Do you think its going to be one of the best things in our country in the area of financial literacy ? What kind of changes do you see after this Financial Literacy Initiative comes and our next generation arrives !

Does Govt work for Financial Services?

Posted on by Jagoinvestor

This is not an allegation, but I want to understand how things are related and putting 3 points which shows how govt policies are influenced by the financial services sector.

No tax on Saving Bank interest up to Rs 10,000

Some time back, there was this craze for liquid funds. The money will earn a much better return compared to your savings bank account and the money is highly liquid. You can get it in 1 day if you want it. This started making people believe that liquid funds are as good as saving bank account and people started parking their short term money in liquid funds. At the start it was just done by few people, then through advertisements, newspapers, websites etc, most of the investors came to know about this and started using to park their money in liquid funds.

What happened due to this?

When you don’t leave a lot of cash in your savings bank account, banks do not have enough money in their pool to further lend. Less money is available for them to use it for lending, less money is there to do anything. Note that saving bank money is the cheapest source of money to banks. All they need to pay is 4% (6% is mostly given for amount above 1 lac only). There is no alternative for the bank to find this cheap money. This issue was big for banks like SBI, ICICI, HDFC, and other several banks. What could be done?

This rule came in – “No tax on interest in saving bank account up to Rs 10,000”, a nice incentive for people to keep their money in Saving bank account, hence banks are benefitted by this move! This happened in this budget 2012 – Not very sure how it happened but from where this rule came in this budget? Can someone find any links!

No Indicative returns on FMP’s (Fixed Maturity Plans)

Fixed Maturity Plans (MP’s) are just like Fixed Deposits. FMP’s were allowed to give indicative returns and they could say – “You can expect a 9.4% return in one year”, this is when bank FDs were at 7-8% . FMP’s were also “extremely safe”. So a person wanting to put his 25 lacs in FD for 1 yr , could see that extra 1-2% return without much extra risk (he thought so) and the tax advantage was higher in FMP’s compared to fixed deposit (this was bonus). I hope you know that one of the biggest share of mutual funds investments go into FMP’s (not equity funds btw).

So What happened because of this?

Banks FD’s were affected, People started looking at FMP’s as alternative of the Fixed Deposits . The “indicative” returns were the issue, those were perceived as “guaranteed return” and people started flocking to FMPs, at least the bigger ones. No, I have no idea, but suddenly there was news sometime back that FMP’s are not allowed to declare any indicative return. I truly don’t understand why this rule came into existence. Can someone also find a link here?

LIC bailing out Indian Stock market

Markets sometime go up and down, but when its down, it puts pressure on a lot of people. Govt is one of them. Markets down for years is not a strong sign of a booming economy, so govt has vested interest in markets going up and look good. In the same way there are tons of PSU companies which are doing bad and no one wants to touch them. ONGC was one of the earlier and at the moment Air India is another one.

Can anyone really connect the dots why LIC invested in ONGC ? Can anyone tell why LIC invested 60,000 crore in 2011-2012 in stock markets? LIC might have thought that markets are low, but what is the reason to put 50% of its equity investments in PSU stocks? Did someone ask it to do so?

Subra has a point to make on this:

LIC’s top management has only ONE BOSS to please – the ruling party (not the government, note). This is scary. When I see fund managers beating the Sensex and the Nifty, I realise that it is by being underweight on the PSU stocks. LiC does not have this choice. (Source)

Comments? Do you think govt is really influenced by Financial Services Sector ?

Financial Planning Survey in India

Posted on by Jagoinvestor

Jagoinvestor recently conducted a online Financial Planning Survey in India and what a common man expects out of the financial plan and a financial planner. I will list down some key observations, some learning based on survey results and finally compilation of the survey in a decent pictorial graph. Note that the survey was also published by Mint Newspaper. Here are the survey results:

Key Observations

  • Total 869 people participated in Survey
  • 93% respondents were Male, 7% female
  • Trust Factor and Honest/Integrity was highest on rating. 92% said that the trust factor is extremely important, 93% said honesty and Integrity is extremely important.
  • Mumbai and Bangalore had highest number of respondents with 17% each Chennai and Hyderabad was lowest in Metro category, NRIs were 2% of overall survey
  • 21% respondents were having income of more than 10 lacs
  • Top 3 professions were Software (30%) and Finance (13%) and Govt (8%) . The smallest was BPO
  • Only 15% people said that Size of the Financial Planning firm is “very much important” to them
  • Only 9% people said that “appearing on TV/newspaper” matters to them , 62% clearly said that its “Not much Important” .
  • 83% people said that they expect or look for Sample Financial Plans before hiring a financial planner.
  • 85% people said that they expect clean financial plan with tables/graphs into it.
  • 91% people said that Discounts of Fees does not work if they dont see any value in them .
  • 75% people said they will not go for any financial planning with corporates like ICICI Direct, Edelweiss or such firms.
  • 90% people said that they will buy products from their financial planner only – if its a CHOICE, only 10% said they will not.
  • About 58% people know less than 2 planners in India by their name, 21% know no one!
  • 68% people feel that Financial Planning would have improved their financial life if they had taken it 5 yrs ago
  • 74% people are very clear that they will hire a planner sometime in future if they get a RIGHT one .
  • 73% people expect less than 20 pages in their financial plan , Only 12% said they would be happy to see more than 30 pages
  • Most of the people do not want the welcome message and those stories in their financial plans
  • In More than 10+ lacs income category , 42% people were from Software jobs
  • In more than 10+ lacs income category from Bangalore , 74% were from Software  and from Mumbai it was just 14% in Software , 48% Others
  • 68% of Govt jobs holders were from Non-metro cities and 60% among them had less than 5 lacs income per year

Financial Planning survey in India

Learnings for Financial Planners/Advisors out of Survey

1. Different Cities have their target markets

Each city is different from other. A Planner in Bangalore should mostly be targeting Software professionals (62%) rather than Doctors (1%), compared to some one in Delhi which had only 20% in software

2. Have a Dummy Sample Financial Plan for prospects , but make it beautiful

There is no doubt that prospects wants to know what they can expect from planners when it comes to that PDF which has things written to it, I know that one PDF is not Financial plan and it does not matter, still thats one tool to impress the prospect and show them what value one will get out of it .

3. Make your plans more attractive , clean and with tables/graphs

Its a clear indication that clients are not looking for 100% pure wordings in the plan, they expect some kind of tables or graphical representation in the plan. But make sure its only at places where it adds value or is required.

4. Don’t worry if you are not on TV or Newspaper

Being on TV/Newspaper is really a great way of increase a financial planner visibility, but only a handful of prospects will prefer a planner coming on TV than some one who is not . Coming on TV is good, but its not the business secret or the top most thing you should be looking for. 56% of survey takers said Appearning on TV/Newspaper is Not much important factor and only 37% said it was complementary , just 9% said that they would like to have some one who appears on TV shows or writes in Newspapers . However its very much clear that these factors increase visibility and helps a planner to increase trust .

5. Trim your Financial Plans to the point and short

A very big number said that they would like it to be less than 20 pages . Hardly few clients will read each and every page in great detail , for most of them what matters is the “solution” and how things look like . The maximum a plan should be of 25-30 page . More than 30 pages is some not expected from most of the clients.

6. Investors are afraid of Big Corporates companies For Financial Planning

Thanks to all the bad treatment all these years , big corporates firms (banking etc) , people are really not very much keen to go to them for financial planning . People seem to be more interested in pure financial planning firms or individuals .

7. Dont push for products – Clients will anyways buy it from you

I know most of the planners have experienced it already. 90% of the survey takers said that they are almost sure that they will buy the financial products from the planner/advisor only and will not go anywhere else . However a planner has to keep 2 things in mind. a) This point is true only if a client is satisfied with your work and is a happy client . b) At no point you should be pushing products to them or give them any feel that you are there just to sell them products (Too much product push is one of the biggest turn off) , hence just do what you should be doing and almost all the clients will buy the products from you, unless there is some other strong reason not to buy

What do investors think about this Financial Planning Survey in India ? 

As a reader of this blog and someone who might be one of the investor, what do you think about this survey and the results ! . Do you agree with it . Do you want to point out something and talk about it ? Jagoinvestor also provides financial planning , you can look at our services page here

Free Tax Filing for Women in India by Cleartax.in

Posted on by Jagoinvestor

Cleartax.in – a tax filing portal has made tax filing for women totally free. Women all over India can now file their tax returns for free, sitting at home at www.cleartax.in . Women will have free access to its very user friendly tax filing website till July 26, 2012. The ClearTax platform is an easy to use to file one’s tax returns. The offer is an initiative by the company to invite women to take ownership of their finances.

Cleartax observed that  more men than women e-filed online with them and their team learnt that in aggregate, women spent significantly less time paying attention to tax planning and personal finance compared with men. Jagoinvestor had done an article on Women & Personal Finance which revealed how 88% or more of urban women (who are well educated and live in big cities) have Zero or very less personal finance knowledge. Most of the tax filing work is handled by their father or husband and they generally refrain from any taxation related work.

What you can do ?

You can spread a word about this into your office and share it with all the women employees, you can also use this opportunity to file taxes online for your wife, sister, mother or any female relative.

Best Mutual Funds House [Graph]

Posted on by Jagoinvestor

Which is the best mutual fund House ? Is HDFC better than DSP Black Rock or Reliance ? A very good way of looking at it is to see all the equity oriented mutual fund schemes of a fund house and check how many of them have outperformed its benchmarks in different time frames like 3 yr, 5 yr and 7 yrs?

For instance, Birla Sun life which has 16 equity funds with more than 5 yrs of history, but out of those 16 funds almost 8 of them have not outperformed its benchmarks, which is not very encouraging. The same kind of scenario is with SBI & UTI mutual fund houses.

On the other hand if you see HDFC , Franklin templeton, Reliance & ICICI Prudential Fund house, they have done much better, a higher percentage of their schemes has outperformed their respective benchmarks. Its a very clear indicator of a AMC overall performance . So its very important to understand which AMC’s are doing better over their whole basket of mutual funds and which are not. Below is an info graphic which I have re-aligned using a PDF document published at Livemint article here . Credit goes to Kayezad E. Adajania from Livemint who has done this research. Good show !

Best Mutual Funds AMC

100% of HDFC Funds outperformed their benchmark

You can see in the above graph that only HDFC is one fund house which has all its equity schemes outperform its benchmarks in 3 yr, 5yr and 7 yr category. Which Mutual funds are you invested in? Do you feel you should move to the fund houses which have shown better performances ?

Which mutual fund AMC is your favorite and why ? What do you have to say about this study ?