16 Nov 2008

Investment areas - Managing your portfolio

In today's contracting market, it is rightly said that Cash is king! With the Stock markets crashing, people have lost faith in stocks. There are various others investment areas where one can invest besides stocks with less risk, like the ULIP Plans which are based on the risk taking capacity of the investor. Some of the investment instruments one can look to invest and diversify the portfolio in such prevailing condition are as follows :

1) Public Provident Fund (PPF)

          The Public Provident Fund Scheme
is a statutory scheme of the Central Government of India.

       Some of the features are as listed below:
  • The Scheme is for 15 years.
  • The rate of interest is 8% compounded
  • One deposit with a minimum amount
    of Rs.500/- is mandatory in each financial year.
  • Joint account is not permissible.
  • Those who are contributing to GPF
    Fund or EDF account can also open a PPF account.
  • The PPF scheme is operated through
    Post Office and Nationalized banks.
  • PPF account can be opened either in
    Post Office or in a Bank.
  • Account is transferable from one Post
    office to another and from Post office to Bank and
    from Bank to Post office.
  • Deposits in PPF qualify for rebate
    under section 80-C of Income Tax Act.
  • Best for long term investment.
1) Post retirement long term plan
2) Easily accessible through Post offices across India
3) The funds accumulated can be taken out based on needs, depending on the rules laid down by the Govt
4) Redeemable upon retirement
5) The interest on deposits is totally
tax free.

2) Systematic Investment Plan (SIP)

              An SIP is a vehicle offered by mutual funds to help you save regularly.
          It is just like a recurring deposit with the post office or bank where you put in a small amount every month. The difference here is that the amount is invested in a mutual fund. This is basically a long term investment where you wish to achieve a definite amount for some particular reason..say for your childrens education or maybe post retirement plans

1) Be a regular investor
2) Commitment in investments
3) Streamlined perspective of what you are going to get
4) A clear picture of your future demands
5) Doesn't need  very large premium
6) Can be shown as an investment

3) Term Assurance Plans
Have you ever thought of what will happen to your family when you are not there? Will they have to go through the dilemma and bear the loans you have taken for car or home? Do not worry, for they will be covered by Term assurance plans. They basically assure you the premium you have asked to cover for and only can be recovered when either the plan matures or upon your demise.

Term life insurance or term assurance is life insurance which provides coverage for a limited period of time, the relevant term. After that period, the insured can either drop the policy or pay annually increasing premiums to continue the coverage. If the insured dies during the term, the death benefit will be paid to the beneficiary. Term insurance is often the most inexpensive way to purchase a substantial death benefit on a coverage amount per premium dollar basis.

1) Can be shown as an investment
2) Peace of mind for investors
3) Roll back plan in case of any misfortune that happen to you


1) Wikepedia
2) Bajaj Capital
3) LIC India Ltd.
4) HDFC Bank Ltd.


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