[vasanthjn]

Originally Posted by S_U_N

I persisted and got better rates from some other brokers.
One in Mumbai provided me rates as follows:
1. Initial Rs. 370
2. From second year Rs. 220

0.4 % brokerage.
e.g. 10 units, 3200 per unit, total Rs. 32000 worth of e-gold.
128 brokerage
15.78 STD
1.0 TOC
----------
.

Hi SUN,

Sorry for the late reply. Have been travelling due to work.
Since you asked, I trade with Religare Commodities. Pretty decent Guys and many times they give me good limits to trade. For holding eGold in demat form, there is no Custody / Annual Maintenance Charges effective Aug 2010.
This is the latest conversion charges and to my knoweldge there are no other charges.
Gold
Denominations Conversion Charges (per coin / bar)
1 gram -> Rs.100
8 grams -> Rs.400
10 grams -> Rs.100
100 grams -> Nil
1 Kg -> Nil

[vasanthjn]

Originally Posted by S_U_N

Further on the e-Gold from NSEL,

I am not familiar with trading and exchanges, but what is the inherent risk of using these trading platforms. What happens if NSEL (which is a limited liability company) vanishes one fine morning after say 5-10 years down the line?

On the assumption that NSEL vanishes after 5 years, to my knowledge you dont have any issues since all your holdings are in the demat account which you have maintained with your broker. Since all of them are in demat form, you should be able to trade these in other exchanges.
You have issues when your broker trades in your account without your authorization and all your holdings are in the Pool account of your broker and not in your demat account.

[S_U_N]

Originally Posted by faustus77

Hi everybody

I have to open a depository a/c with them and they will keep the silver in it and in my daughter's name.The depositry is managed by a sister concern of NSDL(national securities depositry limited).
Does anybody have any idea about e-silver as well as IIFL?

All is fine. But I am still pondering on the risk aspects. I am still not clear what happens to the money that I am giving to the broker. Read my response to vasanthjn below.

Originally Posted by vasanthjn

Hi SUN,

This is the latest conversion charges and to my knoweldge there are no other charges.

Thank you for these details.

Originally Posted by vasanthjn

On the assumption that NSEL vanishes after 5 years, to my knowledge you dont have any issues since all your holdings are in the demat account which you have maintained with your broker. Since all of them are in demat form, you should be able to trade these in other exchanges.
You have issues when your broker trades in your account without your authorization and all your holdings are in the Pool account of your broker and not in your demat account.

I do not understand demat concept to that extent. I am still not sure how it can be traded without the exchange's existence.

BTW:I came across this article on ET:

Quoting the most relevant bit:
"According to the ministry, such contracts boil down to short selling (prohibited in spot commodity exchange), and settlement beyond the stipulated 11 days. The regulator has sent its report to the consumer affairs ministry for appropriate action."

This is a case, where you buy gold units today hoping that someone has actually bought physical gold and stored it in the NSEL vault. But is there a mechanism to ensure that it really happens. A few years down the line, when you try to redeem your units to physical gold, what is the chance that you discover there is nothing in the vault or the exchange has gone bankrupt (it is a limited liability company) or some scam has been unearthed?

Still a gray area for me.

And I am still not considering the risks that the broker adds to this maze.

[vasanthjn]

Originally Posted by S_U_N

I do not understand demat concept to that extent. I am still not sure how it can be traded without the exchange's existence.


This is a case, where you buy gold units today hoping that someone has actually bought physical gold and stored it in the NSEL vault. But is there a mechanism to ensure that it really happens. A few years down the line, when you try to redeem your units to physical gold, what is the chance that you discover there is nothing in the vault or the exchange has gone bankrupt (it is a limited liability company) or some scam has been unearthed?

Still a gray area for me.

And I am still not considering the risks that the broker adds to this maze.

To make things clear, a demat account is not linked to one Exchange, it can be linked to many exchanges if it trades in similar type of goods. For example if you trade in Stocks, then you can use a single demat account to trade in NSE / BSE / Ahmedabad SE / Madras SE. The same thing applies to commodities market also. With the single demat account (commodities), you can trade in NSEL and in MCX in their SPOT market. Even if NSEL goes bust, then you can trade your units in MCX. Your query with respect to storage of Gold is regularly audited and monitored by the depositories, here it is NSDL and CDSL. They perform physical audits on a regular basis.

In order to avoid the broker risks, it is always better to go with a established player and always insist the broker to transfer your holdings to your demat account. Once it is transferred to the demat account, the broker cannot do anything to your holdings, since NSDL / CDSL doesn't release them without your authorization.

[faustus77]

S U N/Vasanthjn
Hi.
Vasnthjn has put it well
Once the broker transfers then the goods are lying in your account.
Until you issue a delivery slip they will lie in your a/c
It is like banking.Your money is with the bank.When you want to draw you issue a cheque.
My query is about silver as investment and about IIFL.
Any idea?
Regards

[ghodlur]

I happened to come across a website for eGold called Bullion India which offers to allow gold buying as low as 0.1 gm. They dont have any account opening charges and the only charge comes when you want the e-gold invested to be converted into physical gold and delivered to your home. Only delivery charges are applicable, thats all. No Borkerage too. The below link gives all the details.

http://www.bullionindia.in/index.aspx

[S_U_N]

Originally Posted by vasanthjn

Even if NSEL goes bust, then you can trade your units in MCX. Your query with respect to storage of Gold is regularly audited and monitored by the depositories, here it is NSDL and CDSL. They perform physical audits on a regular basis.

Thank you vasanthjn for these details.
Some more questions from my side (if you don't mind).

... always insist the broker to transfer your holdings to your demat account. Once it is transferred to the demat account, the broker cannot do anything to your holdings, since NSDL / CDSL doesn't release them without your authorization.

Originally Posted by faustus77

S U N/Vasanthjn
Once the broker transfers then the goods are lying in your account.
Until you issue a delivery slip they will lie in your a/c
It is like banking.Your money is with the bank.When you want to draw you issue a cheque.

If this is like bank account then, once I buy the units, they are in demat account (and I get a statement). Now if the bank goes bankrupt, RBI will ensure I get 1 lac at least.
In this scenario, if the agency holding my account goes bust or closes shop, who will back me up?
Broker/ NSEL/ NSDL?

Originally Posted by ghodlur

I happened to come across a website for eGold called Bullion India

Good find. Thank you.

[vasanthjn]

Originally Posted by faustus77

S U N/Vasanthjn
Hi.
Vasnthjn has put it well
Once the broker transfers then the goods are lying in your account.
Until you issue a delivery slip they will lie in your a/c
It is like banking.Your money is with the bank.When you want to draw you issue a cheque.
My query is about silver as investment and about IIFL.
Any idea?
Regards

With respect to your query on investment in SIlver, trading and investing in Silver is at a very nascent stage among Retail Investors in India.
Couple of issues with eSilver:
1. The liquidity of Silver is not as good as Gold in NSEL / MCX. Hence the cost of buying increases due to liquidity issue.
2. Silver trading in NSEL / MCX are purely controlled by few large Corporates and HNIs, hence it sees very high fluctuation.
3. The retail participation is low with respect to Silver.

If you consider Silver as an investment for long term, then you may go ahead but you cannot simply convert it to Cash without having high impact cost in the current scenario.

I dont have much idea about IIFL.

[vasanthjn]

Originally Posted by S_U_N

Thank you vasanthjn for these details.
Some more questions from my side (if you don't mind).

If this is like bank account then, once I buy the units, they are in demat account (and I get a statement). Now if the bank goes bankrupt, RBI will ensure I get 1 lac at least.
In this scenario, if the agency holding my account goes bust or closes shop, who will back me up?
Broker/ NSEL/ NSDL?

In the above scenario, if the bank goes bankrupt then DCGIC pays a maximum of Rs. 1 Lakh to you if and only if if the Bank has taken an insurance from Deposit Credit Guarantee Corporation of India Limited, which is an subsidary of RBI. So, effectively its not RBI who is paying the amount.

With respect to the Demat Account, the relationship between various entities is like this. Client <->Depository Participant(DP) <-> Depository.
Here the client is an individual like you or myself. The DP is the intermediary and it can be like Religare, IIFL, Kotak, etc,. and the Depository is limited to only NSDL and CDSL. All your accounts are ultimately held with the Depository and not with the DP. Neither DP nor the Depository makes any use of your holdings for their revenue generation, hence it is cost to them to maintain your accounts. In order to offset this cost, the DPs collect the Annual Maintenance Charges from the account holder. There is no possibility that you will loose your holdings in case your DP goes bust.

Hope I made it Clear.

[faustus77]

S U N/Vasanthjn
Hi
Thanks your replies.
I had not thought of the impact cost as I was under the impression that silver trading would be liquid.
Maybe if I buy now and maybe after a few years silver starts having better volumes then the impact cost may not matter.At the same time I am not going to trade so a couple of hundreds per kg will not matter much.
Noted about IIFL.They have been advertising everyday in the economic times.It is a listed company so as long as they transfer then it is ok.
Regards

[carboy]

Originally Posted by vasanthjn

In the above scenario, if the bank goes bankrupt then DCGIC pays a maximum of Rs. 1 Lakh to you if and only if if the Bank has taken an insurance from Deposit Credit Guarantee Corporation of India Limited, which is an subsidary of RBI.

*ALL* Commercial Banks & *ALL* Co-operative banks are insured.

Originally Posted by vasanthjn

So, effectively its not RBI who is paying the amount.

Just like in any other insurance, it's the insurance customers(other banks in this case) who haven't failed who are paying the amount.

[mobike008]

There is a cash-back life insurance scheme from Bajaj Allianz called " Super Cash Gain"

Terms are 12, 20 years etc but, minimum investment period is 5 years.

It works like this and amount taken below is hypothetical and for calculation purpose

1st year Premium
1,50,0000-30% cash back OR Samsung Galaxy Note 2 OR Sony Viao Laptop
+
2gms Gold Coin
+
2 Nights/3 Day Holiday Voucher in a 4/5 star property valid for 1 year

2nd Year Premium
1,50,000-7% Discount

3rd Year Premium
1,50,000-7% Discount

4th Year Premium
0

5th Year Premium
0

I can withdraw the above investment after completion of 60 months (5years from start date) and suppose the age of the policy holder is 32 years, the net amount after 60 months is Rs.9,03000 (Approximately) for the total investment made in 3 years (Approximately 4 Lakhs)

Sum Assured and Minimum Period of Investment (5 years) will be clearly mentioned on the bond they issue to us

Tax Benefits
1.) Tax rebate under 80C
2.) Sum Assured is completely tax-free

Sounds like a real juicy deal to me. What do others think?

[mjothi]

Originally Posted by mobike008

There is a cash-back life insurance scheme from Bajaj Allianz called " Super Cash Gain"

Is this one?

http://www.bajajallianz.com/Corp/con...-cash-gain.pdf

Seems interesting, let me also wait for feedback

[mobike008]

Originally Posted by mjothi

Is this one? Seems interesting, let me also wait for feedback

Yeah, that's the one

Btw, I have already paid up and waiting the bond to arrive, so please dont give me unpleasant surprises

[zen91]

Avi Bhai, if the purpose is to take life cover through this policy, do not go for it. LI policies are to be taken as a protection tool only. Opt for a simple term plan, you would get both the benifits of Section 80C and 10(10D). Cheapest Life Cover can be purchased by appliying it online through various LI companies.

For investment and savings, opt for MF/Gold/Realty/Direct Equity etc.

Edit : Just saw your mail on the investment already done. Please read the bond carefully after you receive it. Incase the terms are not what were mentioned at the point of discussions, you have 15 days Freelook period to cancel the policy or you may continue if you have liked the product.