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Community User Posted on 03:01pm 11-May-2020

About Sovereign Gold Bonds SGB by Reserve Bank of India RBI which is currently available

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ICICIdirect Executive Thank you for the query. We would like to inform you that Sovereign Gold Bonds (SGBs) 2020-21 Series II is open for subscription from today, Monday, May 11, 2020, to May 15, 2020.

Issue Price: Nominal value of the Bonds shall be fixed in Indian Rupees on the basis of a simple average of the closing price of gold of 999 purity published by the India Bullion and Jewellers Association Limited for the last three business days of the week preceding the subscription period. The issue price of the Gold Bonds will be Rs. 50 per gram less than the nominal value to those investors applying online and the payment against the application is paid through digital mode.

The Issue price for the current tranche is Rs. 4590/gm – Rs. 50/gm = Rs. 4540/gm

Maturity: 8 years with exit option from 5th year to be exercised on the interest payment dates. These bonds shall be traded on exchanges.

Subscription limits: Minimum 1 grams of gold, Maximum- 4000 grams (4kgs) of gold per person in a fiscal year (April- March). Available in units of one gram of gold & multiples thereof.

Taxation: Capital gain tax arising on redemption of SGBs to an individual has been exempted.

If sold in secondary market before maturity, capital gains will taxed @ of 20% with indexation if sold on or after 3 years and would be subject to marginal tax rate if sold before 3 year.

Interest: 2.50% fixed per annum payable semi-annually

To subscribe to Sovereign Gold Bond, follow the below steps:

Log into your account > Trade & Invest > IPO/FPO/BUYBACK > (scroll down) FD/BONDS PLACE ORDER > Click on Apply from the Action column against the Sovereign Gold Bond.

Product note, Terms & Condition of the issue can be viewed from the same section.
03:24pm 11-May-2020

Personal Finance

Community User Posted on 10:54am 17-Feb-2020

When is the next window for buying Gold Bonds?

Comments

Personal Finance

Community User Posted on 10:19am 12-Feb-2020

Where do you think interest rates will be one year from now?

Comments

Community User 6-7%

04:50pm 12-Feb-2020
Community User When you say Interest rate - there are two
Interest rate for loans and interest rate for deposit holders.
These are y personal opinion.
Interest rate on loan - will be reduced as Government and RBI are hell bent on reduction of lending rate. Their main aim is to reduce the interest burden so that the individual will have more money which in turn will increase consumption. The recent RBI tweeks is one of its kind where they did not reduce the benchmark rate but did few things which has reduced the cost of borrowing money for banks. This eventually will reduce the interest rate on loans. The rate of reduction no one can predict but it is on the down turn.
Interest rate on Deposits - When a bank is able to get money for lending from RBI at 5.20% for three years, then the deposits rate need to come down. As most of indians save in the form of deposits, a marginal reduction will definitely improve the margins of banks. Hence I do feel that the deposits will also reduce. Banks have already reduced the rate to its rock bottom of 6%.
11:41am 13-Feb-2020

Personal Finance

Community User Posted on 12:32pm 03-Dec-2019

I have a ULIP plan taken since a year.

As the plan has an option of 4 switchings of funds in a year, can you guide me as to what factors should be looked out while switching funds?

Comments

ICICIdirect Research Our financial planners are of the view that the option of switching funds highlights an important feature of ULIPs as an investment product. Policyholders have the flexibility to move from underperforming funds/assets to outperforming funds/assets. However as exciting, it may sound, it is very difficult to time the perfect entry and exit. Ill-timed switches can significantly deteriorate the long term performance of your ULIP. 4 free switches in a year do not mean you have to act on it necessarily.

The best way to take advantage of this feature is to follow asset allocation and rebalancing. Based on your present & future financial responsibilities, you arrive at an allocation for yourself – say 50% in pure equity & 50% in pure debt. Your premiums are invested in the funds based on the above asset allocation decision. When there is a major deviation e.g. equity allocation rising from 50% to 58% due to sudden rise in markets, it is prudent to switch the gains to debt part of the portfolio and bring the allocation back to 50-50. Similarly, when equities deliver negative returns, you can switch from debt to equity to average out your purchase at lower levels. You can decide on a threshold, say deviation of more than 5% (in any or both asset) from the existing allocation, to act on rebalancing. As you near your goals you should ensure a major part of the portfolio is in a steady asset class like Debt, rather than exposed to Equity. Over a long time horizon, disciplined rebalancing will help smooth out the portfolio volatility and generate decent risk-adjusted returns.
01:28pm 03-Dec-2019
Community User I am not an expert in ULIP but I thought I should reply to one part of the query. Just because you have 4 options to switch, you need not do the switch if the fund is performing fine. Also you need to give sufficient time to assess if the fund is doing fine or not. In just one year you cannot judge if the fund is doing right or wrong. The more basic question you need to ask is if you did not understand the product and seeking advise now after one year what to do, why did you buy this product in the first place .
All banks irrespective of public or private, are in the process of shoving ULIP on to customer. I met 4 bankers two weeks back and all wanted me to buy ULIP. They dont give a damn about their banking business...
11:05am 08-Dec-2019
Community User Any investment needs to have a goal, right? If yours is a short term goal 5 years keep afloat with a balanced fund so that the invested capital is safe and returns are nominal.
If you have a long term view say 10 or 15 years, try an aggressive hybrid or a pure equity fund based on your penchant for risk. Cheers and Good Luck!
General trend is volatile periods like December when FIIs take out a chunk of their money move to a balanced fund. Similarly when budget effects come to play in Jan or Feb move back to equity fund.
11:20am 16-Dec-2019

Personal Finance

Community User Posted on 12:30pm 03-Dec-2019

My age is in 20s and I have an additional surplus of Rs. 1,00,000, current income Rs. 4,00,000 p.a. and personal expense comes up to Rs. 1,30,000 p.a. as I am living with my family.

Thinking of retirement, should I select a pension plan or increase my EPF? How should I invest in a pension plan? Please elaborate.

Comments

ICICIdirect Research Our financial planners are of the view that as you have an investment horizon of at least 20 years for your retirement, it makes sense to be aggressive in your approach and invest majorly in Equity, with some portion in Fixed Income (Debt). Traditional pension plans predominantly invest in Fixed Income instruments. Unit Linked Pension Plans invest your money in a mix of Equity & Fixed Income, the allocation of which you can decide yourself or leave it to the fund. NPS is a good retirement savings vehicle that acts like a mutual fund and provides you the option to invest in a mix of asset classes, with a secondary benefit of tax deductions. However, you face liquidity issues with the pension products as there are restrictions for withdrawals before retirement: NPS withdrawals are allowed in case of extenuating circumstances (medical needs/children education etc) up to 25% of corpus; Pension plans give you far less surrender value compared to the amount you had invested, entire amount being taxable.

EPF currently provides the highest post-tax return from a debt-oriented investment. Apart from the mandatory 12% deduction, you can also invest an additional amount through Voluntary Provident Fund (VPF). Here again, you face liquidity issues - somewhat relaxed than above options - entire withdrawal is possible only if you are no more employed; partial withdrawal possible up to a certain limit in case of extenuating circumstances.

We suggest investing in open-ended mutual funds following an asset allocation approach for your financial goals, including retirement. With such a long term time horizon, you can your monthly savings in equity-oriented funds (Large Cap / Multi Cap / Mid Cap sub categories), as the debt portion can be fulfilled through your EPF. Timely rebalancing (shifting gains from Equity to Fixed Income upon reaching certain threshold - % in deviation - and vice versa) of your portfolios is equally important to reduce portfolio risk. If you do not mind the liquidity restrictions, you can also open NPS and invest some portion into it, as the basic investment process is the same as those of mutual funds & auto rebalancing is possible.

It is also important that you are able to achieve your other financial goals, apart from retirement, as and when they occur. This would mean budgeting for your needs and investing as per different financial goals at the same time, in appropriate instruments and proportion. A comprehensive financial plan will take into consideration all financial goals of your life, protection requirements (insurance) and suggest you optimal strategies to achieve them. ICICIdirect offers a customized financial planning service to its customers. To know more about this service, you may write to us at fps@icicisecurities.com.
03:17pm 03-Dec-2019
Community User This is a difficult question to answer. I had doubled up on my PF contribution. I am very happy I made that choice
05:35pm 03-Dec-2019
Community User For all resident Indians, EPF is the savings with highest ROI, so a definite yes to opt for.
02:19pm 04-Dec-2019
Community User Starting early on retirement corpus is the best option. Plan your other goal based investments like:
A. Near term goal, essential requirement.
1. Higher education plan for self, if any in 2 or 3 years.
2. Marriage expenses, after 5 to 7 years.
3. A small corpus for a child after 10-12 years.
4. A fund towards buying a house or apartment along with the life partner after12 to 15 years.
5. Child education plan for college fees, etc.,
6. Retirement planning after 25 years from now.
Use balanced and debt funds prudently. Review your invested fund s/ equity s performance against a benchmark index based on your goal s proximity. If returns are safe and capital is intact, you are well in course to achieving your next goal in life.
If your investment is not returning sufficiently, move after 2 years of time given. Add more funds to your SIP whenever you get an increase in income. Retirement funds must be in debt fund and a ROI of 5 to 7% and capital invested must be water tight.
02:34pm 04-Dec-2019
Community User B. Not essential but desirable goals
1. An overseas / distant indian trip with partner after marriage.
2. A higher education plan for child / children.
3. A second house in the name of spouse.
4. An insurance plan for aging parents and self.
Cheers and good luck.
02:38pm 04-Dec-2019

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Community User Posted on 03:01pm 11-May-2020

About Sovereign Gold Bonds SGB by Reserve Bank of India RBI which is currently available

Community User Posted on 10:54am 17-Feb-2020

When is the next window for buying Gold Bonds?

Community User Posted on 10:19am 12-Feb-2020

Where do you think interest rates will be one year from now?

Community User Posted on 12:32pm 03-Dec-2019

I have a ULIP plan taken since a year.

Community User Posted on 12:30pm 03-Dec-2019

My age is in 20s and I have an additional surplus of Rs. 1,00,000, current income Rs. 4,00,000 p.a. and personal expense comes up to Rs. 1,30,000 p.a. as I am living with my family.

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Community User Posted on 03:01pm 11-May-2020

About Sovereign Gold Bonds SGB by Reserve Bank of India RBI which is currently available

Community User Posted on 10:54am 17-Feb-2020

When is the next window for buying Gold Bonds?

Community User Posted on 10:19am 12-Feb-2020

Where do you think interest rates will be one year from now?

Community User Posted on 12:32pm 03-Dec-2019

I have a ULIP plan taken since a year.

Community User Posted on 12:30pm 03-Dec-2019

My age is in 20s and I have an additional surplus of Rs. 1,00,000, current income Rs. 4,00,000 p.a. and personal expense comes up to Rs. 1,30,000 p.a. as I am living with my family.

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