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Debt Mutual Funds: A perfect choice for conservative investors A common question in investor’s mind: Interest on money lying in savings account is too low and if I park that money in a fixed deposit, return is not great there too plus there is no flexibility.What should I do? The answer to this question for a conservative investor is “Invest in Debt Mutual Funds”. What are Debt Mutual Funds? Debt funds represent the category of mutual funds that invest in a mix of debt or fixed income securities. Debt securities are loans taken by either Government or Companies. These securities have fixed maturity date and pay fixed rate of interest. As the Debt Mutual Funds invest in securities with fixed interest, the returns of these funds are more predictable and less volatile. The returns of a debt mutual fund include interest income and capital appreciation / depreciation in the value of the security due to changes in market dynamics. There could be a risk element if the Company, ...

Fixed Maturity Plans (FMPs): A perfect choice for investors looking for steady returns! What are Fixed Maturity Plans (FMPs) FMPs are close-ended debt funds with a specific tenure which means that an investor can invest only during the New Fund Offer (NFO) period. The period may range from one month to five years, but generally it is for around 3 years. Where do Fixed Maturity Plans (FMPs) invest? FMPs invest in fixed income securities like certificates of deposits (CDs), commercial papers (CPs), money market instruments and highly-rated securities (like ‘AAA’-rated corporate bonds). The investment portfolio consists of fixed income instruments with matching maturities which means that the fund manager invests in a way that all the instruments mature around the same time. For example, if the FMP is for four years, the fund manager will invest in instruments with a maturity of four years or less. This helps the investor get an indicative rate of return while protecting ...

Is Children’s ULIP Suitable for You? As a parent, you must have paid a sizeable sum of money as donation for your kid’s admission in school. Besides this, you also have to regularly pay a certain sum of money for your child’s fees, and additionally, you have to save for his/her higher education too. However, with rising costs of education, it is quite likely that inflation has been eating into your savings. For example, today, the cost of an engineering course in India is Rs. 8,00,000. After 10 years, it could cost approximately Rs. 33,00,000, assuming inflation at the rate of 10% every year. This is a modest estimate considering how according to a recent survey, the cost of education is increasing at 15-20% on a yearly basis. To combat inflation and save effectively for your children’s education, term insurance, along with disciplined investments in mutual funds, are important tools. There are also a few children’s Unit-Linked Insurance Plans (ULIPs) that are being offered by i...

What is SIP? SIP means a systematic investment plan. It is the easiest way to invest in mutual funds at any intervals viz. weekly, monthly or quarterly as per preferences. A SIP model is nothing but a method where a fixed amount is auto-debited from the investor’s bank account and a certain amount of mutual fund units are bought based on their price on the date of investment. This way when the market is low, more units come into investor’s portfolio which later at the time of liquidation can be sold handsomely.

What is a Dematerialisation ( Demat ) Account? For open online demat account click here -  Demat account Demat  is a short form of Dematerialisation. Dematerialization is the process of converting physical shares into electronic form. A Demat account is an account that allows investors to hold their financial products in the electronic form. Having a Demat Account allows you to buy shares and store them safely. It is similar to a bank account in which you hold deposits with the bank and the record of debit/credit balances are maintained in a bank passbook. In the same way, when you purchase or sell shares, it will be credited or debited to/from your Demat Account respectively. It can be used to hold a variety of investments like equity shares, exchange traded funds, mutual funds, bonds, and government securities. You can open a Demat Account without possessing any shares and can maintain a zero balance in your account.   Why D...

What is an IPO? An initial public offering (IPO) is the first time a company issues  shares  to the public. This is when a private company decides to go ‘public’. In other words, a company that was privately-owned until then becomes a publicly-traded company. Before the IPO, a company has very few  shareholders . This includes the founders, angel investors and venture capitalists. But during an IPO, the company opens its shares for sale to the public. As an investor, you can buy shares directly from the company and become a shareholder. How are shares allocated in an IPO? There are different investor categories when it comes to IPOs. This includes: Qualified Insititutional Buyers (QIBs) Non Institutional Investors (NIIs) Retail Individual Investors (RIIs) The allocation of shares differs for all the above groups in an IPO. As an individual investor, you come under the last category. As an individual investor, you are allowed to invest in small lots w...