An Introduction to Online Trading.....! (Part-1)

Online Trading involves investment activity takes place over the internet and it does not require physical presence of the broker. An investor has to register with an online trading portal for doing online trading. Investors get into an agreement with the firm to trade in different securities according to the terms and conditions given on the agreement. As the servers of the online trading portal are connected all the time to the stock exchanges and designated banks the processing is done in real time and investors can also have updates on the trading. Online trading allows you to check out the status of your orders either through e-mail or through the interface that cannot be accessed by a third party. Online trading also gives the options like to link their bank account, Demat accounts and brokerage accounts into single interface.

Types of Online Brokerage Firms

There are two broad models of online brokerage firms such as;

• Bank-backed firms
• Entrepreneur-backed firms

Bank-backed brokerages

Bank-backed brokerages have expanded on the basis of their brand name and the trust of investors in them. The integrated 3-in-1 accounts offered by these bank backed brokerages help their parent bank by giving it accounts along with float income. Examples of Bank-backed brokerages are ICICI direct and HDFC Securities.

 

Entrepreneur-backed firms

Entrepreneur-backed firms expanded by offering customers a mix of online and offline accounts, higher margin finance amounts and lower brokerage rates. Though the bank based has performed better but the latter have not lagged too far behind. Examples of Entrepreneur-backed firms are Sharekhan, Indiabulls, Religare and IndiaInfoline.

 

How to start Online Trading

To begin investing online you need to register as a member for an integrated 3-in-1 online trading account with any of the service providers.

 

The three accounts are:

 

• Trading account, which enables you to transact online.
• An Internet enabled bank account for online money transfers through Internet.
• A demat account, where your shares will be deposited.

Factors to be considered while choosing an Online Trading account

When choosing an online trading account we have to consider the following factors

 

• Credibility and credentials of the institution
• Types of investments that you can make online such asequity shares, mutual funds, IPOs, etc
• Quality of information and content such as research support and tools provided by the organization
• Speed of order execution
• Choice of products to choose from
• Safety and security features inbuilt in the system
• Customer care service

 

Besides the above, many additional features offered may be looked into, like ability to sell shares next day before receiving delivery, SMS alerts, intra day trading in equities, etc based on your investing needs.

Difference Between Online and Offline Trading

However, with all the convenience of online trading there are still investors who prefer the old way of trading i.e.; offline trading. Offline trading has lost some popularity but it is still the main form of trading/investing. Offline trading offers many benefits as well. Following are the major difference between Online and Offline trading.

 

1.    Online trading consumes less time as compared to offline trading.

 

2.     Online trading is very helpful in finding the records easily but offline trading takes more time to find out the records.

 

3.    In online trading the investor/ trader has to learn the working of trading software but in offline trading the broker will take care of this part.

 

4.     In the help of online trading, there is no chance of any errors while doing the trading. But in offline trading there are some errors existing like barriers of communication.

 

5.   In online trading, we have the opportunity to know the international market rate of share very easily.

 

6.    The major benefit in offline trading that an investor appreciates the most is that they are get support from the broker when making investment decisions.

 

7.    There are experienced and professional brokerage companies that help to handle the investments of investors but in offline trading it is not possible.

 

8.   In offline trading there is someone to answer any questions that may cause concerns.

 

Features of Online Trading

The Online Trading is having many features which make it most suitable for the investors to go for. Some of these features are as follows:

 

Freedom of Information

The Internet can offer a new sense of control over your financial future. The amount of investment information available online is truly amazing. It is one of the best features of being energetic investor. For the first time in history, any individual with an Internet connection can:

 

• Know the price of any stock at any time
• Review the price history of any stock in chart format
• Follow market events in-depth
• Receive a wealth of free commentary and analysis about stock markets and the global economy
• Conduct extensive financial research on any company

Control of your money

One of the great advantages of using an online trading account is the fact that the account belongs to you, and is under your direct control. When you want to buy or sell stock, you don’t have to call your broker on the phone and possibly argue with the broker about the order. There is no delay in executing the order.

 

Access to the market

At the most fundamental level, an online trading account gives you more quickness in buying and selling stocks through complicated information streams, dedicated trading platforms and sophisticated tools for accessing the markets.

 

Ensures the best price for investors

Every broker house aims at providing the investor with the best price available. Also due to the high level of transparency with regard to display of information relating to the specific stocks and company profiles, you will be able to get the finest quote for your orders.

Offers greater transparency

Online trading gives you greater transparency by providing you with an audit trail. This involves a complete integrated electronic chain starting from order placement, to clearing and settlement and at last ending with a credit into your depository account. All these stages are subject to inspection, thus bringing in transparency into the system.

 

Enables hassle free trading

Online trading integrates your bank account, trading account and Demat accounts, which leads to effortless and paperless trading for you.

 

Allow instant trade execution

You as an online investor will be able to execute the entire trading transaction, right from logging on to our site, to the execution and settlement of your bank account, in a very short period of time.

 

Provide a level of playing field

Trading online gives even the smallest retail investor access to information that earlier was available only to the big traders. This provides a level playing ground for all investors in the securities market.

 

 

Reduces the settlement risk

Online trading reduces the settlement risk for the investor, as in this case all short sell orders are squared off at the specified cut-off time and not allowed to be carried forward. In the case of a demat account your demat account is checked by us before executing your sell transaction. This reduces the settlement risk for the buyer, who is assured of the delivery of the securities and for you as a seller of the securities.

 

Instant order trade conformations

Every trade is confirmed immediately and you will receive an on-screen confirmation following every trade with full details for your records. This avoids expensive errors that would have been discovered when it is too late.

Source:- http://indianmoney.com/article-display.php?cat_id=1&sub_id=12&aid=830&acat=&ahead=An%20Introduction%20to%20Online%20Trading.....!%20(Part-1)

Why Should You Plan for Your Parents' Retirement....!!!

One of the biggest mistakes people make now is failure to set aside money for post retirement needs. Most of us are not concerned about the life after retirement. Social Security is no longer a sure bet. This means that most of us have to rely on ourselves to provide for retirement, if you want to fill your stomach you have to earn nobody will come and help you. In simple terms saving money to make your retired life happy is called retirement planning. If you haven't made an effort to make retirement planning, make it now. A financial planner can help you in finding a better option for your retirement planning. You can do your own research also to determine what you need to do now so that you are secure in your future.

Why should you Plan for your parents Future

Securing the future of your parent is your responsibility; we all have to realize this fact. Think for a moment how much money they have spent for us...! This is the time to give back all those golden moments that they have gifted to you. They have sacrificed many things to make you grow to this level. If you are able to read this article now, there is no doubt they have spent huge money on you. If they wouldn’t have spent money for your food, health, dress, education etc. now you wouldn’t have seated in front of system and reading this article. There are thousand things you can do for your parents. Old age is like childhood during this period they need care and love, if you can spend a minute with your parents when they are old, it will be a great happiness for them. There are many factors that disturb people when they are old such as;

 

• Ill-health
• Loneliness
• Lack of care
• Negligence by others
• Lack of love etc.

Parent’s Investment on you

If your parents don’t have money to fulfill their retirement needs, don’t ever degrade them instead you should realize the fact why they don’t have money. To mold a kid as a perfect citizen, his parent has to invest huge amount on him/her. While investing this amount they will expect “I am investing on my kind, in future whenever I need money my kid will take care of me” 80% of the parent will have this expectation, now it is our responsibility to take care of our parents. Following are some of the spending they have done for you;

 

• Food
• Dress
• Toys
• Entertainment
• Health care
• Education, etc.

Needs to be fulfilled

Basically there are three kinds of need to be fulfilled such as;

 

• Financial Needs
• Medical needs
• Moral Needs

Financial Needs

Nothing is possible without money, leading a life without sufficient money will kill the mental health of people. When our parents are old it is our responsibility to provide them enough money to take care of their small needs.

 

Medical Needs

Old age is the time during that all kinds of health problems will follow us. During this time we need to spend huge amount of money on our parent’s health like how they have done we were small. Taking a health insurance plan on your parents name will help you to find a simple solution for this problem.

 

Moral Needs

Moral support is the most important thing that we have to provide for our parents when they are old. It will help them to be mentally stronger. Moral support can avoid many problems such as depression, ill health, etc.

How can you plan for your Parent’s future?

There are many ways to do retirement planning. Following are some of the major ways in which you can plan your parent’s future.

 

·         Reverse Mortgage

·         Health Insurance

·         Pension Plans (ULIPs)

·         Immediate Annuity

·         Annuity

 

Reverse Mortgage

Reverse Mortgage can be well defined as “a scheme under which a bank or financial institution permits the owner of a house to leverage the future value of the asset into a steady source of income”. Reverse Mortgage allows elderly people to have a steady stream of income by mortgaging self occupied property to banks or eligible financial institutions while continuing to live in and hold the title of the house till he is alive or sells the house or moves out.

 

In this case it is completely parents’ desire whether to go for reverse mortgage or not. But being their children we can do something for them. Normally parents will write their property in their children’s name even if they don’t have enough money to lead a peaceful life. Instead of making advantage of this situation we can advise them to go for Reverse mortgage, later if you want to retain the house you can pay back the money to bank and do it. 

 

Health Insurance

Health care costs are high and getting higher day by day. As the age of an individual increases the health care costs increase manifold and become a burden on the individual. Senior citizens have to pay out of their hard earned savings to meet the expenses. Health Insurance Plans protects old age people in case they need expensive medical care. You get cashless benefit or medical reimbursement for hospitalization expenses due to illness or accidents.

 

It is our responsibility to take care of our parents’ health when they are old. But it is very difficult to manage this situation without proper financial planning because you might need huge money to take care of their health. Health Insurance is a better solution to overcome this scenario, it will take care of your parents health related expenses all you have to do is buy one health insurance plan and pay the small premium. 

 

Pension Plans (ULIPs)

The first point to note is that there is no insurance in an ULPP, though the product is offered by insurers. Even if an insurer offers insurance cover bundled with pension, such a product is best avoided. Insurance is best taken independently from pension planning, through what are called term insurance plans. ULPP is very much an investment product, competing on costs, benefits and returns with Mutual Funds, deposits, share portfolios, and so on. In the accumulation phase, the amounts invested go towards purchase of units, at prevailing market rates. At retirement, the policyholder is provided with a certain portion of the accumulated fund as a lump sum payment. The remaining amount is used to purchase an Annuity scheme to provide regular monthly income post retirement.

 

Immediate Annuity

Immediate Annuity is aregular income stream purchased with a lump sum investment, where the income stream starts immediately after the purchase. Immediate Annuities are usually provided by a life insurance companies. The major difference between “immediate annuity” and “annuity” is that in immediate annuity you have to make a lump sum investment and you will start receiving the annuity immediately after purchasing it but in “annuity” you will start receiving amount only after a pre-determined period.

 

Annuity

An annuity is an investment that you make, either in a lump sum amount or through installments paid over a certain number of years, in return you will receive back a specific sum every year, every half-year or every month, either for life time or for a certain number of years. After the fixed period of annuity payments expires, the invested annuity fund is refunded, possibly with a small addition, calculated at that time.

 

Annuities differ from all the other forms of life insurance discussed so far in one basic way - an annuity does not provide any life insurance cover instead, offers a guaranteed income after your retirement. Usually annuities are meant to generate income during one’s life after retirement that is why they are also called pension plans. Annuity premiums and payments are fixed with reference to the duration of human life.

 Types of Annuities

There are four major kinds of annuities such as;

·         Life Annuity with purchase Price

·         Life Annuity without purchase Price

·         Joint Life Annuity with purchase Price

·         Joint Life Annuity without purchase Price

·         Life annuity guaranteed for 5, 10 & 15 years

 

Life Annuity with purchase Price

In this kind of annuities the person receives annuities for as long as he/she lives and his/her nominee receives the purchase price of the policy after demise. The purchase price refers to the value of your investment corpus at the end of the accumulation phase (it is the amount with which the annuity was purchased).

 

Life Annuity without purchase Price

In Life Annuity without purchase Price the person receives annuities for as long as he/she lives his/her nominee won’t receives anything after his/her demise.

 

Joint Life Annuity with purchase Price

In Joint Life Annuity with purchase Price both you and your spouse will receive annuities for life. After his/her demise the purchase price will be returned to the nominee.

 

Joint Life Annuity without purchase Price

In Joint Life Annuity with purchase Price both you and your spouse will receive annuities for life. After the death of concerned person nothing will be returned to the nominee.

 

Life annuity guaranteed for 5, 10 & 15 years

In this type of annuities you receive annuities for a minimum term i.e. 5, 10 or 15 years. Annuities continue for life thereafter. If death occurs before the end of the pre-determined term, the company will pay the annuity till the end of that term to his/her nominee.

Source:- http://indianmoney.com/article-display.php?cat_id=1&sub_id=13&aid=831&acat=&ahead=Why%20Should%20You%20Plan%20for%20Your%20%20Parents%27%20Retirement....!!!

What is Merchant Banking....?

History of Merchant Banking

The history of merchant bank can be dated back to 17^th & 18^th centuries when it first started in Italy & France. This was started by the Italian grain merchants. It comprised of merchant bankers who intermediated or assisted in financing the transactions of other traders and their own trade too. With the passage of time the practices in evolved and the merchant banking in the modern era started from London where the merchants started to finance the foreign trade through acceptance of bill. Later they extended their services to the governments of under developed countries to raise the long term funds through the floatation of bonds in the London money market. Over the period they extended their services to loan syndication, underwriting the issues, portfolio management etc. The post war period witnessed huge increase in the merchant banking activities.

 

Merchant Banking in India

Merchant banking activity was officially commenced into the Indian capital Markets when Grindlays bank received the license from reserve bank in 1967. Grindlays started its operations with management of capital issues, recognized the requirements of upcoming class of Entrepreneurs for diverse financial services ranging from production planning and system design to market research. Apart from this it also provides management consulting services to meet the Requirements of small and medium sector rather than large sector.

 

• Citibank Setup its merchant banking division in Indian in 1970.
• Indian banks Started banking Services from 1972.
• State bank of India started the merchant banking division in 1972

After that there were many banks which set up the merchant bank division such as;

• ICICI
• Bank of India
• Bank of Baroda
• Canara Bank
• Punjab National Bank
• UCO Bank

The Merchant Bank got more importance in the year 1983 when there was a huge boom in the primary market where the companies were going for new issue. Merchant banking activities are organized and undertaken in several forms. Commercial banks and foreign development finance institutions have organized them through formation divisions, nationalized banks have formed subsidiary companies, share brokers and consultancies constituted themselves into public limited companies or registered themselves as private limited Companies. Some merchant banking companies have entered into collaboration with merchant bankers of foreign countries abroad with several branches.

Merchant Bankers in India

As of now there are 135 Merchant bankers who are registered with SEBI in India. It includes Public Sector, Private Sector and foreign players some of them are

 

Public Sector Merchant Bankers

·         SBI capital markets ltd

·         Punjab national bank

·         Bank of Maharashtra

·         IFCI financial services ltd

·         Karur Vysya bank ltd,

·         State Bank of Bikaner and Jaipur

 

Private Sector Merchant Bankers

·         ICICI Securities Ltd

·         Axis Bank Ltd (Formerly UTI Bank Ltd.)

·         Bajaj Capital Ltd

·         Tata Capital Markets Ltd

·         ICICI Bank Ltd

·         Reliance Securities Limited

·         Kotak Mahindra Capital Company Ltd

·         Yes Bank Ltd.

 

Foreign Players in Merchant Banking

·         Goldman Sachs (India) Securities Pvt. Ltd.

·         Morgan Stanley India Company Pvt. Ltd

·         Barclays Securities (India) Pvt. Ltd

·         Bank Of America, N.A

·         Deutsche Bank

·         Deutsche Equities India Private Limited

·         Barclays Bank Plc

·         Citigroup Global Markets India Pvt. Ltd.

·         DSP Merrill Lynch Ltd

·         FEDEX Securities Ltd

 

Merchant Bank Vs Commercial Bank

• Commercial banks are catering to the needs of the common man whereas the merchant banks cater to the needs of corporate firms.
• Any person can open a bank account in the commercial bank whereas it cannot be done in the merchant bank.
• Merchant bank deals with equities whereas the commercial bank deals with debt related finance which includes the activities like credit proposals, loan sanctions etc.
• The merchant bank is exposed to the market so it is more exposed to risk as compared to commercial banks.
• Merchant bank is related to the primary market whereas the commercial markets are more into secondary markets.
• Merchant banking activities are capital restructuring, underwriting, portfolio management etc whereas the commercial banks play the role of financers.
• The activities of merchant banks have a direct impact on the growth and liquidity of money markets.   
• Merchant Bank is management oriented whereas the commercial banks are asset oriented
• The commercial banks generally avoid risks and on the other hand the merchant banks are willing to take the risks.

Services Provided by Merchant Banks

Below mentioned are the major services offered by Merchant Bankers;

 

• Project Counseling
• Management of debt and equity offerings
• Issue Management
• Managers, Consultants or Advisers to the Issue
• Underwriting of Public Issue
• Portfolio Management
• Restructuring strategies
• Off Shore Finance
• Non-resident Investment
• Loan Syndication
• Corporate Counseling and advisory services
• Placement and distribution

Project Counseling

Project counseling comprises preparation of project reports, deciding upon the financing pattern to finance the cost of the project and appraising the project report with the financial institutions and banks. It also includes filling up of application forms with significant information for obtaining funds from financial institutions and obtaining government approval.

 

Management of Debt and Equity offerings

This is the major function of the merchant banker. They assist the companies in raise funds from the market. The main areas of work in this regard include;

 

• Instrument designing

• Pricing the issue
• Registration of the offer document
• Underwriting support
• Marketing of the issue
• Allotment and refund
• Listing on stock exchanges.

Issue Management

Management of issue involves marketing of corporate securities like equity shares, preference shares and debentures or bonds by offering them to public. Merchant banks act as an intermediary to transfer capital from those who own it to those who need it. After taking action as per SEBI guidelines, the merchant banker organizes a meeting with company representatives and advertising agents to finalize arrangements relating to date of opening and closing of issue, registration of prospectus, launching publicity campaign and fixing date of board meeting to approve and sign prospectus and pass the necessary resolutions. Pricing of issues is done by the companies in consultant with the merchant bankers.

 

Managers, Consultants or Advisers to the Issue

The managers to the issue assist in the drafting of prospectus, application forms and completion of formalities under the Companies Act, appointment of Registrar for dealing with share applications and transfer and listing of shares of the company on the stock exchange. Companies can appoint one or more agencies as managers to the issue.

 

Underwriting of Public Issue

Underwriting is a guarantee given by the underwriter that in the occurrence of under subscription, the amount underwritten would be subscribed by him. Banks/Merchant banking institutions cannot underwrite more than 15% of any issue.

 

Portfolio Management

Portfolio indicates investment in different types of securities such as shares, debentures or bonds issued by different companies. Portfolio management means maintaining proper combinations of securities in a mode that they give maximum return with minimum risk.

 

Restructuring strategies

A merger is a blending of two companies into a single company where one survives and other loses its corporate existence. A takeover is the purchase by one company obtaining controlling interest in the share capital of another existing company. Merchant bankers act as the middlemen in setting negotiation between the two companies. Merchant bankers assist the management of the client company to successfully restructure various activities such as mergers and acquisitions, divestitures, management buyouts, joint venture among others.

Off Shore Finance

The merchant bankers help their clients in the following areas involving foreign currency.

 

• Long term foreign currency loans
• Joint Ventures abroad
• Financing exports and imports          
• Foreign collaboration arrangements

Non-resident Investment

The services of merchant banker includes investment advisory services to NRI in terms of classification of investment opportunities, selection of securities, investment management, and operational services like purchase and sale of securities.

 

Loan Syndication

Loan syndication is an assistance provided by merchant bankers to get mainly term loans for projects. Such loans may be obtained from a single development finance institution or a syndicate or consortium. Merchant bankers help corporate clients to raise syndicated loans from banks and other financial institutions.

 

Corporate Counseling and advisory services

Corporate counseling involves the entire field of merchant banking activities such as project counseling, capital restructuring, public issue management, loan syndication, working capital, fixed deposit, lease financing acceptance credit, etc. Merchant bankers also provide customized solutions to their client’s financial problems. Apart from this they also explore the refinancing alternatives of the client, and evaluate cheaper sources of funds. Rehabilitation and turnaround management is another area of advice. A merchant banker advises the client on different hedging strategies and suggests the appropriate strategy.

 

Placement and distribution

The merchant banker helps in distributing different securities like equity shares, debt instruments, mutual fund products, fixed deposits, insurance products, commercial paper, etc. The distribution network of the merchant banker can be classified as institutional and retail in character. The institutional network consists of mutual funds, foreign institutional investors, private equity funds, pension funds, financial institutions etc. The size of such a network signifies the wholesale reach of the merchant banker. The retail network is purely depends on networking with investors.

Source: http://www.indianmoney.com/article-display.php?cat_id=1&sub_id=16&aid=834&acat=&ahead=What%20is%20Merchant%20Banking....?

Financial Planning during Recession.....!

The term recession has been appearing in the newspaper in the past one year almost every day and it has become a mediocre word. The recession has been defined as the Recession is not to be confused with depression. Recession means a slowdown or slump or temporary collapse of a business activity or to sound like an economist you can define recession as the state of a decline in GDP in two or more consecutive quarters. A person has to be financially insulated to escape the affects of recession it cannot be guaranteed that with this plan an individual would be not facing any difficulties but one thing that can be guaranteed is that the problems and the damage will be reduced to minimal. In this article we will be having a look at the various ways in which one can be financially sound by having a good financial plan.

Steps or precautions to be taken

Following are some of the precautions you have to take during recession.

• Make sure that your cash inflow is more than cash outflow. Usually we don’t maintain an account in which we don’t record the total income from all the sources that we have and all the investments that we do and this leads to the shortage of money.

• Reduce the usage of credit cards during recession. The credit cards may seem like a way out for getting easy money at a faster rate but at the end of the month when the bill comes we realize that the money that we have spent is much more and the interest rate also depends and varies from one bank to another which are providing credit. While we are withdrawing the money we don’t think about the interest rate.
• If a person doesn’t have enough knowledge then he can approach the professional financial planners for getting a good plan. The sole purpose of approaching a financial expert is that they know in and out of the financial planning and have a good knowledge about the changes that are happening in the market which can have a profound effect on the individual. 
• Have a check on your lifestyle. During the good times when the economy is booming spending lavishly doesn’t affect your financial position but the recession is one thing which brings some of the most dangerous factors such as unemployment, loss in the value of the rupee value, inflation, unemployment etc along with it which can topple your position and within no time you will find yourself that your cash reserves are getting over so it is better to have a control over it. 
• Reduce using your vehicles. This you may find funny but just imagine the price of the petrol was nearly around 45 rupees in the last year during the same time but has jumped to 55 rupees now so if we are going for a litre of petrol everyday then the monthly increase in the petrol consumption is going to be nearly 300 rupees. This may look a small figure but when there are pay cuts happening, loss of jobs, no bonuses or increments paid it can make a difference. 
• The purchase of Gold ornaments can be avoided or reduced till the recession is over.
• Make sure that your liquidity position or financial position is sound enough. 
• Having an insurance plan is very helpful during the recession. Make sure that you have insured the life of each and every member of your family. When you are in need of money due to health problems you can claim the insurance.
• If you are looking for a house then this might be a good time for the investment. The real estate which was experiencing an exponential growth in the preceding years is down now. The rates of homes have fallen to all time low perhaps this is the right time and you could be saving a lot of money now compared to if you had purchased the same property during the boom time.
• Don’t ever think of taking a loan or borrow huge amount of money from the private lenders. We might be getting the money easily and quickly but what happens is that the interest rates that they charge is very high compared to the rates of other banks.
  
  
  
   
  Investment during recession
  Be it a boom period or financial crisis or depression or recession the investment is inevitable. The financial experts have opined that the person should and must be investing so as to ensure that he is financial stable and he must have more than one income streams. The plus point of having different streams of income particularly during the recession is that by chance you loose your job or there is a cut in your pay then the investments that you have made will continue to provide you with the same money inflow. Let us discuss some of the investments that are safe during the recession;
   
  Investing in share market
  Share market is the secondary market where the trading of the securities takes place. The investment in the share market is one of the safe investments that can be done provided you have the right knowledge of trading or you have someone who has that. That someone could be a broker or the financial planner who provides you this service too. You can invest in the shares and reap benefits. For example if you have a good broker who can evaluate the fluctuation in the prices of the shares then you can purchase the shares of a company whose prices have fallen down and sell them off once the prices rise. This is just one situation there are other situations too like purchasing debentures or preference shares or equity shares of a company which is performing well and then you will be getting the interest on the debentures or share of profits made.
   
  Banks
  Banks are the second avenues where we can invest during the recession. The banks offer various kinds of offers such as keeping the money in savings bank account or keeping the money as the fixed deposits or recurring deposits etc. Although the interest rates have come down but the returns are sure and the exact amount that you are going to get in the form of returns can be known at the time of investment.
  • Investment in the government backed securities is a good investment. 
  • If you have the experience then you can go for lending your money this can be done provided you have a good knowledge and right contacts and the person to whom you are lending the money is credit worthy. Otherwise if you know any private lenders then you can contact them and ask for their assistance.
  • Post offices also have the facility of keeping the money as fixed amounts or recurring deposits etc. the returns on the investment are good and sure.
    
    
    Tips for small business owners and micro-entrepreneurs
    The suggestions given above apply for everyone now let us have a look at the suggestions for small business owners and micro-entrepreneurs
    • Diversify your portfolios. The diversification is very important in order to prevent huge losses which can happen if you invest in only one business. The entrepreneurs should not lay all the eggs in only one basket.
    • Investments or over capitalization in one area could prove dangerous. A good financial plan will definitely will be helpful in this regard.
    • Have an eye on the liquidity position don’t make any financial decisions as a result of which the water may start rising above the level.
    • Keep your money in the trusted banks not with any person or organization for that matter the nationalized banks are the safest ones.
    The economic conditions that have an impact on the financial planning
    Although the financial plans are not decided by the government and are done by the person concerned but the changes that occur in the economic conditions such as inflation, Budget, GDP Growth, variation in the interest rates have a profound effect on the financial plans.
     
    GDP (Gross Domestic Product)
    The Gross Domestic Product measures the monetary value of all the goods and services that are sold by a nation or an economy during a particular period. The GDP is the broadest gauge of the economic health of the nation. Although the GDP has no direct effect on the personal financial plan of a person but it is the indicator of the rise in the employment opportunities and the development of the economy of a particular nation or economy.
     
    Interest rates
    The interest is nothing but the cost of lending and borrowing. The extra amount that is earned or the difference between the borrowing rate and lending rate is the risk premium. The interest rates are very important in the financial plan because keeping the fixed deposits will be common in the each and everyone’s financial plan and they would be expecting particular amount in terms of returns but due to variation in the economic conditions there is a variation in the lending and borrowing rates. In the last year we have seen many changes made by the Reserve Bank of India in the interest rates in the REPO (the rate at which the Reserve Bank lends the money to other banks) and Reverse REPO (the rate at which other banks lend money to the Reserve Bank of India) and as a result of that there have been changes in the interest rates of loans, bank accounts, fixed deposits offered by the banks.
    Source:- http://www.indianmoney.com/article-display.php?cat_id=1&sub_id=115&aid=833&acat=&ahead=Financial%20Planning%20during%20Recession.....!

How to access your CIBIL Credit Information Report ....?

How to access your CIBIL Credit Information Report (CIR)?

Now you can access your CIBIL score through or (CIR) directly from CIBIL. You have to go following link http://www.cibil.com/accesscredit.htm & download the request form. Further you have to send the form via following options to CIBIL along with enclosing the necessary documents mentioned below;

 

Email: myreport@cibil.com

• Email the CIR Request Form duly filled in
• Mail self attested hardcopies of your latest Identity Proof and Address Proof documents and Fees to P.O.BOX 17, Millennium Business Park, Navi Mumbai- 400710
• Once CIBIL receives the documents and Fees, your request will be processed and copy of your CIR will be dispatched to you.

Letter: Address

• Write to CIBIL with the CIR Request Form duly filled in
• Also mail self attested hardcopies of your Identity Proof and latest Address Proof documents and Fees³ to P.O.BOX 17, Millennium Business Park, Navi Mumbai- 400710
• Once CIBIL receives the documents and Fees, your request will be processed and copy of your CIR will be dispatched to you.
  
  
  Fax: 022-40789007

  • Fax CIBIL the CIR Request Form duly filled in
  • Mail self attested hardcopies of your Identity Proof and latest Address Proof documents and Fees³ to P.O. Box 17, Millennium Business Park, Navi Mumbai 400710
  • Once CIBIL receives the documents and Fees³, your request will be processed and a copy of your CIR will be dispatched to you.

  Documents required while accessing your CIBIL report

  •      Valid Identity Proof
  •      Valid Address Proof
  •      Payment terms
    
    
    Valid Identity Proof

    PAN Card/ Passport/ Voters ID (Mail self attested hard copy of any one of      these Identity Proofs)

     

    Valid Address Proof

    Bank Account Statement/ Electricity Bill/ Telephone bill (Mail self attested hard copy of any one of these Address Proofs)

     

     

    Payment terms

    Demand Draft (DD) of Rs 142/- (inclusive of all taxes and express delivery charge) in favor of Credit Information Bureau (India) Limited payable at Mumbai.

     

    Your CIBIL CIR will be presented to you in a simple and easy to understand format. However, on receiving your CIBIL CIR, if you require any explanation/clarification, you can email CIBIL at consumerqueries@cibil.com or call them on 022-61404300.

     

    Format of CIBIL Credit Information Request form

     

    How do CIBIL maintain the credit history?

    Consumer loan repayment history is maintained by their respective banks not by CIBIL. On the basis of report sent by its member banks, CIBIL maintains its CIR. Every time there is default in credit history of borrower it is reported by individual banks from which he has taken loan to the CIBIL. Since person who has taken 2-3 different type of loans from different banks & has defaulted on them than its default report is generated by respective bank but now it is maintained & circulated by CIBIL in its original form on demand of lending institutions when the same individual has gone for seeking new loan.

     

    However in CIR it is mentioned by CIBIL how many Loan A/Cs does the individual maintains & on which loan A/Cs his EMIs are overdue. It should also be noted that CIBIL score is used mainly to check the default in loan repayment history of an individual. To check your regular repayment history, bank use other tools like they ask for No dues certificate for the loan which you have already paid but appearing in your CIBIL report & for current loan repayment history they check it through your current& past six months bank statements.

     

    Evidence: - Go through the sample CIR format provide by CIBIL on its website& check Section is Explanation for summary A/Cs. As for other appraisal criteria if you check documents required for loan on website of any bank you will find it is mentioned there. Link for the same is

    http://www.cibil.com/understandreport.htm

     

    Whether CIBIL recognize the unique PAN of a person?

    As per the information made available by CIBIL they duly recognized the PAN & Voters id no. of the individual while making consolidated CIR. It is explicitly mentioned in the report

     

    Evidence: - Go through same sample report & it is clearly mentioned in the borrowers’ information column

    http://www.cibil.com/understandreport.htm

     

    A tenant changes addresses and the bank / FI does not intimate the change of address to CIBIL promptly whereas a default is reported promptly.

    Ans. It is the duty & responsibility of the respective bank to promptly mentioned the change in address of the customer. CIBIL alone can’t track the change in addresses of the millions of customers.

     

    Is CIBIL Succeed in judge the credit rating or score of a person?

    Your default is not mentioned in CIBIL until 180 days has passed since last repayment. This regulation has been brought by RBI to reduce the high NPA & loan defaults posted by Indian banks thus harming the Indian economy in total as it lead to credit crunch. As for the foul play of banks & FIs you can always contact CIBIL through it website & consumer court where it is necessitated by government law to answer your query within 15 days of lodging the complaint.
    Source:- http://www.indianmoney.com/article-display.php?cat_id=1&sub_id=16&aid=835&acat=&ahead=How%20to%20access%20your%20CIBIL%20Credit%20Information%20Report%20....?