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Old 17th September 2010, 19:53   #256
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Just would like to add a point here; a MF can be return 15% return, but there's no guarantee that it cannot go less than 6% right?
To add, if MFs will give a return of 15%, I wonder why banks try to make money by giving loans?

Assuming, I am a bank, I collect deposits from people & I now have a lot of money in my bank. I give out loans to individuals & companies at rates higher than I pay my depositers & make money. Why do I (a bank) need to do this? Why should just not take all the money I have as deposits & just put into MFs. I will get 15% returns on that & my profit will be far more than what I earn by giving out loans. I don't have headache of chasing defaults, hiring a lot of employees who do loan disbursement, creditworthiness analysis etc etc.
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Old 17th September 2010, 19:55   #257
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Right & I don't even know how easy or difficult it is to obtain that money after 15 years & how many peoples need to be paid baksheesh!!!
No need. The account is maintained with SBI, after all. The money will be paid to you within a couple of days of your submiting the withdrawal application, at the end of 15 years.

In fact even after completing just five years, you can start partial withdrawals every year. There are blokes who make such withdrawals, add Rs 500, deposit it back in PPF and claim IT relief for the amount deposited!

And remember, PF and PPF have one unique feature - iron clad safety. Not even a court of law can attach that money!

Last edited by Gansan : 17th September 2010 at 19:57.
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Old 17th September 2010, 20:05   #258
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To add, if MFs will give a return of 15%, I wonder why banks try to make money by giving loans?

Assuming, I am a bank, I collect deposits from people & I now have a lot of money in my bank. I give out loans to individuals & companies at rates higher than I pay my depositers & make money. Why do I (a bank) need to do this? Why should just not take all the money I have as deposits & just put into MFs. I will get 15% returns on that & my profit will be far more than what I earn by giving out loans. I don't have headache of chasing defaults, hiring a lot of employees who do loan disbursement, creditworthiness analysis etc etc.
Banks can and do put money in MFs....even LIC invests heavily in MFs....but the RBI has strict rules about how much money and in what asset classes banks can invest....to prevent banks from taking undue risks with depositors' money and causing a financial meltdown.
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Old 17th September 2010, 20:05   #259
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To add, if MFs will give a return of 15%, I wonder why banks try to make money by giving loans?
Aah!!! You're making me think in a different way!!!
All I intended to say was, a MF could make 15% or more in long run, BUT, trying to take it in 6 months is a gamble. I was once impressed with some fund (might be BNP Paribas-Sundaram, not too sure), but since I was afraid, I didn't go for it. After 2-3 years, I'm seeing the same fund running in negatives.

BTW, what're you opinions on these 2 sites?
http://valueresearchonline.com/
Mutual Fund Research | Home

Is anyone refering to this? Are they good & reliable?

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No need. The account is maintained with SBI
Sir, how do you say that? I know it can be either at SBI or at PO, as mine is in PO. Are you saying, even if I maintain in PO, it is still maintained in SBI?

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The money will be paid to you within a couple of days of your submiting the withdrawal application, at the end of 15 years.
Even with PO?

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Originally Posted by Gansan View Post
In fact even after completing just five years, you can start partial withdrawals every year. There are blokes who make such withdrawals, add Rs 500, deposit it back in PPF and claim IT relief for the amount deposited!
Good idea!!!

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And remember, PF and PPF have one unique feature - iron clad safety. Not even a court of law can attach that money!
Why is that?
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Old 17th September 2010, 20:25   #260
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...the most important thing to start off with is to CLEAR YOUR DEBTS (credit cards / personal loans) ASAP. Car / home loans are always planned but credit cards & personal loans (for paying for credit card / other bills ) take a good hit on your finances.

...Banks like citibank offer to invest in MF (citi prefferred) at as low as 1000 per month (SIP). Thats a bare minimum amount & you can call quits anytime.

I had invested in 2 diff MF's (diversified) and couple of months down the line, i was happy to see that i have some money aside for planned emergencies.

Best part is, with banks like citibank, you can quick withdraw the amount (withing a span of few days). The investment a/c is linked to your savings a/c so the amount gets auto trfd to your savings a/c (after slight deduction).

...CONTROL your spending. Judge whether that big purchase is really necessary or not.

...Get yourself s enrolled for a PERSONAL FINANCE MANAGER software (mint.com / artha money / yodlee.com / perfios.com
How they work is > You add your bank a/c, credit card, billers & the software auto refreshes your balance and shows your assets & liabilities neatly. Its safe as all these organisations have BIG banks as their clients. Triple authentication etc etc.
The point is, you should know your networth at all times & based on that you should judge whether to make that big purchase.

...Play smart with credit cards. Go for the company which offers good rewards points / no surcharge on fuel. For example Amex offers 10times rewards on certain outlets. I dont know how well they can be redeemed but try to shop smart. Paying cash wont return your anything, atleast you get points which you can forget about & use it wisely later

Memorize your billing cycle by heart. The date the bill gets generated (usually midnight) the next few days are best for shopping. This way you can split the purchase into 2 months & pay 50:50.
For ex: bill freezes on 10th sept - payble on 3rd OCT.
Buy on 11th sept - bill freezes on 11th oct - payble on 3rd Nov.
You have sept end & oct end salary to clear the bill.
(THIS MAY VARY FROM COMPANY TO COMPANY. ITS MERELY AN ILLUSTRATION)

...Balance transfer from one credit card to another. Kotak once had an offer of availing for BT (max of 70% of credit limit) at no extra costs. Watch out for such offers.

Last edited by quadra : 17th September 2010 at 20:28.
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Old 17th September 2010, 22:01   #261
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Sir, how do you say that? I know it can be either at SBI or at PO, as mine is in PO. Are you saying, even if I maintain in PO, it is still maintained in SBI?
No, I meant most people including me have it in SBI. But even with PO, I don't think it will be any different. The operating procedures will be same.

As for the safety from court attachment, I guess both PF and PPF are protected under their respective acts.
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Old 17th September 2010, 22:28   #262
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Banks can and do put money in MFs....even LIC invests heavily in MFs....but the RBI has strict rules about how much money and in what asset classes banks can invest....to prevent banks from taking undue risks with depositors' money and causing a financial meltdown.
Exactly. If MF will give 15% year after year & are better than paying back a home loan, then buying a MF wouldn't be undue risk.

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...Banks like citibank offer to invest in MF (citi prefferred) at as low as 1000 per month (SIP). Thats a bare minimum amount & you can call quits anytime.
Best part is, with banks like citibank, you can quick withdraw the amount (withing a span of few days). The investment a/c is linked to your savings a/c so the amount gets auto trfd to your savings a/c (after slight deduction).
There is nothing special about citi. You can do the same with ICICIDirect or any other trading account, I think.
I find Citibank to be far worse than the others. Citi has far less MFs than ICICIDirect.
Sometimes the minimum amount on some fund is far more in Citi than in ICICIDirect.

Last edited by carboy : 17th September 2010 at 22:33.
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Old 17th September 2010, 23:44   #263
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Thanks Aargee!! It was a bad time but I survived it. It is easier to survive these kind of setbacks early in your life. I consoled myself by thinking that it could have been worse. Family support helps a lot. All those Europe travels were during that 2 yr onsite stint.
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Count me in buddy; But trust me, I'm so sorry to hear your experiences Lalit. I never expected to hear this sorrow on your back when I read your travelogues!!! Sounds silly I know, but still...just wanted to convey.
The image I attached in my previous post is from my new passbook which was issued to me today. I will reconfirm & post.
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One small correction, I guess its 9% now

By Jove, what a brilliant idea!! Totally legal and if you do it within a span of few days, you don't loose much on the interest also. Thanks Gansan!!
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There are blokes who make such withdrawals, add Rs 500, deposit it back in PPF and claim IT relief for the amount deposited!
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Old 18th September 2010, 09:50   #264
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By Jove, what a brilliant idea!! Totally legal and if you do it within a span of few days, you don't loose much on the interest also. Thanks Gansan!!
Ha ha, you are welcome, my friend. I also did it a few times when money for investments was tight. But for the sake of form, I will make the PPF deposit a week before I make the withdrawal! The interest loss can't be helped, I think they calculate interest on the lowest balance anyway.

Last edited by Gansan : 18th September 2010 at 09:55.
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Old 18th September 2010, 11:19   #265
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Ha ha, you are welcome, my friend.
After discussing this so extensively I'm going to wake up my 10 year old PPF account by paying fine!!! I guess they would still accept. Has anyone done this before? If yes, pls post your experience & that will help me; I'll be making an enquiry this evening & post the process here.
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Old 18th September 2010, 17:47   #266
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I defaulted in 2008 & Rs 50 was deducted from the account and a corresponding entry made in the pass book. I believe that's about it. I deposited the money after that without any issue.

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After discussing this so extensively I'm going to wake up my 10 year old PPF account by paying fine!!! I guess they would still accept. Has anyone done this before? If yes, pls post your experience & that will help me; I'll be making an enquiry this evening & post the process here.
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Old 19th September 2010, 08:21   #267
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...the most important thing to start off with is to CLEAR YOUR DEBTS (credit cards / personal loans) ASAP. Car / home loans are always planned but credit cards & personal loans (for paying for credit card / other bills ) take a good hit on your finances.


...Get yourself s enrolled for a PERSONAL FINANCE MANAGER software (mint.com / artha money / yodlee.com / perfios.com
How they work is > You add your bank a/c, credit card, billers & the software auto refreshes your balance and shows your assets & liabilities neatly. Its safe as all these organisations have BIG banks as their clients. Triple authentication etc etc.
The point is, you should know your networth at all times & based on that you should judge whether to make that big purchase.
Well said friend. This is exactly am doing currently, but i still have 6 months to clear off by PL's and Credit card outstanding.

Another thing, is perfios.com safe ? Its asking for my HDFC A/C name and password.

Anyone using such kind of online Personal Management Softwares ?
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Old 19th September 2010, 10:58   #268
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Well said friend. This is exactly am doing currently, but i still have 6 months to clear off by PL's and Credit card outstanding.

Another thing, is perfios.com safe ? Its asking for my HDFC A/C name and password.

Anyone using such kind of online Personal Management Softwares ?
When I was running out of control 2006/2007, I started with Excel & then moved to another offline tool, Quicken. I DO NOT trust with online personal management tool for only one reason. Though the online management companies say the data is protected, if a situation should arise by the Govt to look into those data, no one can refuse & it becomes a unnecessary headache to us.

I personally prefer tracking through any offline tools; there's also a thread running on this here. Once things are in control, i.e., no debt & savings fall in place, there's nothing to track in major.
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Old 19th September 2010, 11:01   #269
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Originally Posted by aargee View Post
When I was running out of control 2006/2007, I started with Excel & then moved to another offline tool, Quicken. I DO NOT trust with online personal management tool for only one reason. Though the online management companies say the data is protected, if a situation should arise by the Govt to look into those data, no one can refuse & it becomes a unnecessary headache to us.

I personally prefer tracking through any offline tools; there's also a thread running on this here. Once things are in control, i.e., no debt & savings fall in place, there's nothing to track in major.
+1 to that. I have been using GNU Cash for quite some time.

Are there MAC folks? Has anyone used iBank?
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Old 19th September 2010, 11:07   #270
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Even though I have a tidy sum from my pay going to EMIs, I sill manage to invest in recurring deposits and Gold ETF SIPs. For example, I buy 4 units/gms of gold in ETF every month. I have a couple of SIPs in MFs as well. I am also thinking of contributing to VPF now, since the interest rate has been hiked to 9.5%. Meanwhile ICICI Bank has hiked my home loan interest rate by .5% from this month

Last edited by vasoo : 19th September 2010 at 11:10.
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