Best Saving Scheme

Hi,

Please find my response in red

Pls clarify my doubt..

V r saving in NSC, BAJAJ ALLAIANZ-ULIP AND LIC. other than that v want to save in GOLD COINS.

1.Invest in gold coins is gud thing or anything else???

Investing in gold is a good option but you should always save for a goal. Gold gives you good stable returns but you will have to rent a locker to keep your gold safe. You also should know the fact that you buy gold 10% above the market price and when you sell it you'll get 10% less than the market price. I would suggest you to invest in Gold Exchange traded funds. These are like mutual funds which invests only in gold and you save the 10% difference when buying n selling gold.

2.v don't have child. v can save upto 5,000 per month. which one is best saving scheme in now? other than above THREE..

Here I would like to know if both of you are working. If yes then whether you have been able to invest upto 1 lakh rupees for which you get tax benefit. If not then I would suggest you to simply invest in two ELSS namely Sundaram BNP Paribas Taxsaver and HDFC Taxsaver equally i.e. 2500 each per month.

3. What r all d benefits in NSC, BAJAJ ALLIANZ -STAR PLAN- ULIP SCHME????

I'm confused at this question because you should have asked this before investing in the above instruments. I will not invest in any for the above i.e. NSC which gives 8% compounded when inflation is 10% plus...your money is actually depleting by 2% per annually. ULIPs are a strict NO NO. The premium is high and the life cover is low and over and above that there will be come charges in the initial year which in some cases can be as high as 50% i.e. if you invest 50,000 the invested amount will be 25000 and u'll lose the compunding effect on the balance. I don't see any benefit in these products

4. WHAT IS D DIFFERENCE BETWEEN DEBIT AND CREDIT CARD???

Debit Card gives you the convenience of making payment anywhere directly from your bank account. So, whenever you make payment through a debit card it will be deducted from your bank account.

Credit Card card works on the basis of a credit limit given to you by the bank issuing you the credit card based on your credit worthiness. Whenever you make a payment through a credit card it is like a loan which you have to return withing a certain period (45-60 days in most cases). If you fail to make the payment then late fees will be charged and an interest will also be charged which can be as high as 3-5% per month. If you have a credit card I would suggest you to use it intelligently.

5. i having account in na nationalised bank in T.nagar branch. Now i want to deposit and withdraw money in Anna nagar branch (same bank). is it possible or any charges will be added?

Now almost all the bank are working on core banking. You can deposit cash within the city from any branch I guess there are no charges for that but if an intercity deposit is made then some bank may charge a fee for that which will be approx Rs 100 per deposit.

I hope I have answered your query. If you need any more information please write back.

Regards,

Shaishav

 

Shaiv

Woww!! so nice of you to explain these in detail. Could you please also explain if NSCs are not a good media of investment, what are the other good media? Thanks!

 

Shaiv,
I second Sri. Thanks Sri for posing a question which is also in my mind.

 

Wait before u invest in Mutual funds

u can invest in gold by contributing monthly some fixed amount;;

after 2 years you can buy gold with the accumulated amount

any ideas????????

 

Hi SriVidya/Priya,

I would not say that NSC is not a good investment option. Actually all the genuine investment options available are good(if they were not good they would not exist today)

If an individual is young say between 23-30 years of age he/she should invest heavily in equities through diversified equity mutual funds. The idea is to give your capital an extra kick when you have more earning years you can afford to take risk. After investing for say around 10-15 years in equities he/she should look at slowly shift his capital to a safer investment option like NSC where the interest rate will be less but the capital will be secure because he would need to pay for his child's education and cannot risk the money then.

Now how much a person should invest in equities is a big question. My simple answer to that will be this formula:

100 - your age = % of investment in equities

So if you are 25 then you should invest 75% of your surplus in equities. The rest in debt instruments like NSC, PPF etc.

If someone is 25 years old and is investing 75% of his surplus in NSC then I would say that NSC is not a good option. But if a 45 years old is investing 75% of his surplus in NSC then its the best option because it'll give approx 10% per annum if you are invested for 6 years( INR 1000 invest becomes INR 1600 in six years)

For various investment options I would suggest the following:

Diversified equity mutual funds
Gold (Through Gold ETF's only)
NSC's
PPF
5 years fixed deposits

You need to determine how much to invest in each so that you get good returns on you portfolio.

 

Hi Ooviya,

I too invested initially according to what my father advised but later I found that his suggestions did no good to my investments. Our parents and concerned about us but they suggest investment options which were good in their time now today. A fixed deposit in 70s - 80s used to give 14% pa interest where inflation was just around 5-6% then that was the best investment option.

Tell me do you buy clothes which your parent wore when they were young. The entertainment options you go for are not the same your parents opted for then why should you use the investment options which they used.

Now, coming to the NSC and ULIP I don't think that you should stop investment in NSC and divert the same amount to diversified equity mutual funds or ELSS if you wish to save tax also. You can continue to invest in ULIP but I guess your husband needs to take additional life cover as the life cover from ULIP will not be enough(Go for a term plan not for any other plan)

Investment in gold is very dicey. You buy gold coins and you never sell it to book profits but you go to a jeweler and exchange the coins for gold jewelery. Correct me if I am wrong. If you buy gold today for 1700 per gram and you sell today to some other jeweler or to the same jeweler in the evening he will not give you 1700 per gram. You will get the current market rate that absolutely true but there are two current market rates (Buying Rate and Selling Rate). So, when you buy i.e. the jeweler is selling you'll get it @1700 per gram but when you go and sell the gold on the same day your gold will be vauled @ buying rate i.e. the jeweler is buying which will be approx 1600-1625 per gram

It is very important for everyone to understand how gold prices work. Gold prices do not move according to festivals like Diwali or Akshaya Trithiya but it moves according to the gold prices in international market. Starting from 80s for approx 15 years the gold prices in the international market was range bound ($800 - $1000) but the gold prices in India kept rising because the rupee was depreciating against the dollar.

Regards,

Shaishav