ADVANTAGES OF FINANCIAL PLANNING...

With prices of all commodities sky rocketing these days and the future looking worse, there is a need to plan out all the finances well so as to save maximum money and be able to draw benefits from the money one has in the bank.

Be it budgeting household expenses or creating a savings bank account for one’s retirement or going for different policies to secure not only your feature but your family’s too, financial planning has become an important aspect. A good strategic financial plan will secure the future be it in the form of insurance or retirement plan and will help to maximize the money flow. Often people refer to certain firms so that they can get professional guidance to help them with their existing funds and advice them what to do with them. They tell you which schemes to go for, where to invest, which insurance to take etc.

Financial planning also helps determine the amount of funding a person may need, say as a personal loan or educational loan for kids. The main objective of financial planning is to keep the costs under control and extracting maximum benefits from the money which is in the bank.

The Importance of Financial Advisors...

It need not be told separately, that every earning person needs one financial advisor. Now what is the need and what is the importance of a financial advisor in our lives? The answer is quite simple. Those who earn well also need to invest equally well. Not all have the vision to know where to invest and how to go about investing their hard-earned money.

Now then, this is where the financial advisor comes into play. However, before a financial advisor is able to provide that necessary advice, he himself should be braced with the current knowledge, the trends in the economy and the channels where he can persuade or help his clients to invest.

A financial advisor’s first duty is to see that his client’s money is secure, wherever it might be invested. Secondly, it should be in the right areas with the maximum of returns. If the investment is concerned with the stock markets, the financial advisor should be able to do the shares business himself.

Now, all these are technicalities and not all know this. Therefore, many businesspersons take the help of CAs or financial advisors. This way they can not only manage their own finances, but also feel secure when they are under the refuge of professional financial advisors.

New Deposit Schemes and Interest Rates from Develo...

Development Credit Bank Ltd., one of India’s emerging private sector banks, has announced the deposit scheme- DCB Freedom1-2-3 fixed deposit and has also come up with some other fixed deposit rates.

As per the DCB Freedom1-2-3 fixed deposit, the scheme offers attractive and money saving policy to its customers by giving them aggressive rate of 10.50% for fixed deposit in the ‘375 days to 3 years’ slab. No additional amount will be charged for early withdrawal after 375 days.

In the launch of the scheme, Mr. Gautam Vir, Managing Director & CEO DCB, announced, “DCB has revised interest rates for various terms of deposit providing a bag of fixed deposit products under one roof to their customers to deposit in short term or long term.”

Further, the bank has also revised interest rates for 91 days deposit by increasing it to nine per cent from the previous seven per cent for the deposit up to Rs. 50 lakhs. Under the same scheme, the senior citizens on the day of the launch of the fixed deposit will receive additional 0.50 per cent interest from the current rates, as being stated by the bank.
The new rates will come into action form 0ctober 1st 2008.

SBI increases Interest Rates with new deposit sche...

India’s largest public-sector undertaking, the State Bank of India (SBI) has revised its interest rates and has came up with three slabs for the 2-3 years category which will be effective from October 1.
As per the scheme, the bank has increased the deposit rates by 1% to 10.5% for the 1000 days maturity deposit for the depositors.
On the other hand, the deposit rates for 2-3 year maturity have been increased from 9.5% to 12.50%. Under the same scheme, the senior citizen will be benefitted by getting additional 0.5% interest.
Apart from that, the bank will also offer an additional 0.25% rate above the card rate on a single term deposit of Rs 15 lakh and above, which will have tenure of 181 days to less than 2 years. Further, for the tenure of less than 181 days and the period of 2 years, the bank will also offer 0.1% above the card rate on a single term deposit of Rs 15 lakhs and above.

New Pension Fund Scheme will be launched by PFRDA...

The Pension Fund Regulatory and Development Authority (PFRDA) has come up with a pension fund scheme for all those employees who are working in unorganized sectors including retail, textile and mines. This pension fund is expected to be active in the next six months.

For this scheme, the PFRDA has already selected four companies namely Mercer, Ernst & Young, PricewaterhouseCoopers and Crisil, which will help in recruiting the institutional advisor.

The CEO of PFRDA, Mr. N R Rayalu has declared that the authority is in the process of appointing an institutional advisor to advice on the pension scheme. Further four parties have been selected and the advisor will be short listed in 10-15 days. He further added,

This will help PFRDA roll out the scheme for the unorganized sector within a period of six months.

The PFRDA expects to give benefits to many unorganized sector by giving them the privilege of having them the benefits of the pension plans.

ICICI Prudential SMART fund appealing retail inves...

ICICI Prudential has launched a new product, ICICI Prudential SMART fund. NFO opened on August 18 which will be closed on September 19. Nilesh Shah, Deputy Managing Director of ICICI Prudential, revealed that SMART Fund will be placed among the retail investors also as it is not a kind of capital protected product.

Though credit risk is involved in it, there will be no market risks. Debentures are formulated in such manner that when the Nifty index go down, they do not participate, having the principal amount back credited with some minimum assured returns.

1. It is a structured debt scheme which seeks investment of 95% on equity-linked debentures,
2. Have two plans of 720 days and 1,080 days.
3. Investors will have opportunity to earn equity market linked returns.
4. It tends to High Net worth Individual (HNI) product for its complexity.
5. The Company is seeking to offer Structured Methodology Aiming at Returns over Tenure, which they call SMART Fund.

It seems that the petrochemical related products’ prices will come down due to the drop in the global price of oil. Though now RBI will be taking the final decision whether to tighten or not, the fixed income market has been divided.

Indian Union Budget 2007-2008...

Some highlights of the Indian Union Budget 2007-2008:

• Personal income tax exemption hiked to Rs 1.5 lakh
• Senior citizens threshold tax limit increased from Rs 1,95,000 to Rs 2,25,000
• Tax exemption for women increased to Rs 1.8 lakh
• New tax slabs: 10 per cent for 1,50,000 to 3,00,000, 20 per cent for 3,00,000 to 5,00,000 and 30 per cent above 5,00,000
• Excise on packaged software to be lower from 8% to 12%
• No excise duty on refrigerating equipments
• Anti-Aids drug exempted from excise duty
• Small cars to become cheaper
• Reduced excise duty on two, three wheelers
• Excise duty on hybrid cars cut from 24 pct to 14 pct
• Excise on small cars cut to 12 pct from 16 pct
• Rs 50 cr for tiger conservation
• Sixth Pay Commission report by March 2008
• Defense allocation up by 10% from Rs 96,000 cr to Rs 1,56,000 cr
• 22 Sainik schools get Rs 44 crore
• Rs 624 cr for Commonwealth Games
• PAN sole identification in securities market
• Debt waiver scheme and relief to small and marginal farmers
• Duty reduced on life saving drugs
• Rs 750 crore for upgradation of 300 ITIs in 25 districts.
• No change in peak customs duty
• Central sales tax cut from 3% to 2%
• Govt withdraws banking transaction tax
• Revenue implication of Indirect taxation to be 5900 cr
• Direct taxation changes to be revenue neutral
• Levy on STT only on option premiums

• Commodities transaction tax introduced like STT
• Short term capital gains to be taxed at 15%
• No change in surcharge of corporate tax
• Money changers and people running gains of chance and tour operators to be brought under service tax net
• Revenue Deficit is Rs 55,184 cr at 1% of GDP and fiscal deficit is Rs 1,33,287 cr at 3.1% of GDP
• Estimated planned expenditure at Rs 2,43,086 cr and non-panned expenditure Rs 57,409 cr
• Central Plans Scheme monitoring system under Plan Panel to be unveiled
• Non-agri peak rates for customs raises to 10% from 2% in 2004
• Tax to GDP ratio at 9.2% in 2004 up by 12.5% in 2007-08
• Custom duty on steel scrapped
• Set-top boxes to become cheaper