Financial Planning

Session on Financial Planning

Meeting your goals is possible provided you plan for it, stick to the resolutions/path and take corrective action wherever necessary. Preparation and discipline can take you a long way! Simple decisions whether it is pertaining to the Car you want to buy whether you should make the entire payment on your own, whether you should take a loan etc. all determine how much money will you actually save on the purchase.

1. I am interested in term plan. Please suggest me a good online term plan and also let me know whether i should go for offline or online plan?

You could go for either one- online or offline. Offline- you will have an advisor who will help/ guide you through the process of taking the policy and also help your nominees during claim settlement. The amount of cover is equally important because having little/ inadequate cover is equal to no cover at all. There are plenty of products and you should go through them with respect to your requirements and then choose a plan. Term plan from Kotak is quite economical; HDFC SLIC is also a good option.

2. I already have the Life Insurance which is Insurance + returns but I am missing on Health Insurance and Pure Risk coverage insurance. Which one is good in market? Can you suggest?

Medical insurance is an absolute necessity today. Apart from the cover that the company offers you, it is important that you also have a separate cover. You will need to evaluate the product according to your needs and choose the company.

3. Suggest me Infrastructure Bond for this financial year...

Infra bonds issues are open for a specific period of time. You need to apply when it is open. Do write to us at This e-mail address is being protected from spambots. You need JavaScript enabled to view it with your contact details if you wish that we get in touch with you when an issue is open.

4. I have been investing in stocks for some 3-4 years and would like to know for a medium term goal of 2-3 years, what % of stock exposure would you suggest?

Should i invest in blue chips OR take some exposure in midcaps?
For a goal that is 2-3 years away, ideally invest a very small % in blue chips, rest should be in debt.

5. Without going through a financial adviser, are there are any financial tools (online) towards long term financial planning that can be used in the Indian context? So what i want to do is start with Retirement goals and work backwards

If you have the time and expertise, you could do your own calculations, research and tracking through various tools. Do have the discipline too. Perfios will help you track your assets, income, expenses etc. and financial planning involves a lot of calculations (I haven't found a comprehensive tool online yet)

6. What is insurance amount required for 30 year old person/unmarried in terms of (pure insurance and other insurance)?

The amount of insurance required depends on the income/ expenses and future goals of the person and the liabilities

7. Is gold a good buy now from an investment perspective?

Gold should be used as a hedge against the portfolio (equity) and for diversification, you should have 5-10% of your investments in gold; buy it in a staggered manner.

8. Which are all best options to invest for retirement planning?

For retirement planning: the investment options would depend on how much return you need to earn on your investments. Having said that if the goal is 10 years+ away, higher allocation to equities is a good option provided you can weather out any corrections that may happen including like the one you saw in 2007/2008.

9. How about Silver: good option to invest in?

At the moment there is no easy way to invest in silver in India except physical or through the MCX. I would not recommend investing in it at the moment.

10. I have taken 3 ULIP policies. So far the returns are not good. Please advice, is it good to have ULIP's. Also advice me on pure term policy.

ULIPs are long term products and most of the charges are deducted in the first couple of years. I would recommend continue paying premiums till the policy tenure and ensure you are invested in equity option in the ULIPs monitor these and make necessary switches to debt and back when you want to time the markets as the switches are easy and without any costs. Pure term policies are the cheapest and purest form of life insurance. You could also add a Critical Illness rider to the policy to protect yourself against the illnesses mentioned.

11. How much will be the premium for a year for a 35 year person

The product, sum assured and tenure will also impact the premium amount

12. What is recommended investment vehicle of 15~18 years of time horizon?

Ideally equity- but enter in a staggered manner and 2-3 years before the goal, start moving the money to safer avenues like debt; having said that property(plot) may also be a good option. If it's a goal like child's education - ensure you.. ..also insure the goal; irrespective of whether you are around or not, the goal can then be met.

13. Is there any plan where i can invest monthly some amount in my kids' name and that will be a tax benefit for me? I seriously need advice on this.

Life insurance policies (including ULIPs), ELSS schemes, PPF accounts- depending on your risk profile and preference; choose and allocate

14. Please let me know how Perfios can help. I am new to HP, so still unaware

You can update all your assets in Perfios and track and generate various reports for analysis. It also makes tax filing way easier.

15. I am new to share market and would like to open a DMAT account. Which provider would cost me minimum amount for an amateur like me?

Ensure that the demat is a demat cum trading account. You could choose from ICICI, HDFC, Kotak etc- am not sure about the charges.

16. At present I have a house loan with 11.5% at 20K EMI and investing 20000 monthly in Post office RD, MF, Insurance, Bank RD. further I have 15K additional savings every month. How effectively I can use it? Should increase the House loan EMI? Or invest?

You have a lot of investment happening in debt? First determine where you want to go? What are your goals? When will you need funds and then you can determine if you are saving enough should you prepay loan etc. Financial planning exercise would help you in that.

17. Can you please suggest some banks which offer personal loans at a lower interest rates, i have decided to take a personal loan for about 1 to 2 lakhs for construction of my new house, any suggestions about the interest rates and banks

Personal loans are expensive. If you are taking loan for construction of house, I would advise taking a home loan. It also has tax benefits.
You can invest upto Rs.1 lakh under Sec 80C in instruments like PF, PPF, ELSS schemes, principal on housing loan, insurance premium etc; upto Rs.20,000 in infrastructure bonds (under Sec 80CCF) and you could invest upto Rs.15,000 in medical premium for self and family, another 15,000 for medical insurance premium for parents-20,000 if parents are senior citizens (under Sec 80D). Apart from this: interest on housing loan is exempt upto Rs.1.5 lakhs for a self occupied house and unlimited for a house given on rent.

18. I have invested in SBI magnum tax gain in the year 2007. Now the lock in period is over and fund has gone down drastically and whatever money I invested has decreased to a greater. How should I proceed? Should I continue with it or withdraw it?

You could withdraw it and invest in an equity diversified scheme like HDFC Top 200 fund- do it via SIP ie. on a monthly basis.

19. Please give me approx. premium payment for the pure term policy for a person of 35 years.

For a 35 yr old female; term cover of 10 lakhs costs around Rs.2500 per year.

20. Could you explain what company has to pay for gratuity? What salary components are included in the payment...not for the purpose of taxation?

Gratuity is calculated as (Basic +DA)/26*15*number of completed years of service.15 is 15 days wage for every completed year of is applicable after 5 continuous years of service.

21. If we have savings for Rs 25000 every month what is the possible diversification that we can invest

Depending on what asset allocation you need, you can diversify in various assets or even in equities- diversify n different types of schemes-large cap, midcap etc

22. I have decided to do some additional, activity (outside HP) to earn more. Do u have any suggestions with low investment would be good.

You can invest in mutual funds- on a monthly basis; an amount as small as Rs.500 per month can be invested.

23. i have invested in Sundaram MF Leadership fund 4 years back and the NAV is too low how should i go about with this?

You can switch to Sundaram Midcap fund (although I don't know the rest of your portfolio and if it gets midcap heavy after this). Please review your complete portfolio and then take action.

24. What are the mutual funds that we can invest and will there be tax for capital gains after 1 year?

Sorry you will have to evaluate it yourself.

25. I have land from Sundaram finance which is @ 14.5 % interest and they are considering this as personal loan, now I'm planning to transfer this loan to HDFC @ 10% interest with 0.5% service charges. Are there any other banks which offer less interest?

Sorry you will have to evaluate it yourself.

26. Does the home loan principal repayment sum falls in 1 lac tax exemption bracket or its on top of 1 lac exemption please ? I know that interest repayment is on top of 1 lac bracket.

Principal payment is in the 1 lakh bracket of 80C.

27. I want to invest in my kid's name. What are my options?

You can start a PPF account in the kid's name and also start an SIP in equity funds

28. Where should I invest?

Invest depending on what your allocation to each sector/ scrip is. Bluechip funds like HDFC top 200, Birla frontline equity fund, DSP Top 100 fund can be looked at for starters.

29. Can you please suggest medical insurance for my parents of Age 65 & 56 yrs

Please see what illnesses they have (if any) and then choose a company- National or Apollo may be a good bet.

30. I want to sell property and invest in business.

There will be capital gains on the sale of property; there are ways to save tax; but investing in business is not one of them.

31. Where should I switch my loan to?

You can try HDFC or Bank of India.

32. My husband invests a lakh in insurance policies to save tax. Is it fine?

Insurance should be taken for protecting loved ones; not just saving tax. For tax saving: it is fine.

33. Is it a good time to buy property?

It depends on where the plots are and what the prospects of the place/area are

34. I have made huge losses in SBI taxgain, I have completed 3 years. Should I stay invested?

Yes, Cut losses early so that this money can be put to better use.

35. EPF- my contribution is higher than company's contribution. Is that correct?

Employee's contribution can be higher

36. What is better- SIP or VIP?

SIP is rupee cost averaging and VIP is Value averaging; SIP is popular although people are also warming upto VIP now. I would recommend SIP as it is more disciplined and easy.

37. How can I get best value for my land?

You can check for brokers in the vicinity; else not sure.

38. How do I invest in gold?

Gold ETF is buying units of gold in electronic form. You can buy Gold Bees

39. When I invest in shares, is my investment taxable? How can Perfios help in managing my portfolio?

When you invest money- no tax is payable; when you withdraw- depending on short/ long term and gains made- tax is payable. Perfios will help with the calculation of the gains and also show you which scripts are performing and which are not..

40. Is 5 years compulsory to be eligible for gratuity?

Yes, 5 years is compulsory

41. I am a first time investor, what scheme should I start with?

Start with HDFC Top 200 fund

42. I am looking for one good life insurance plan which can cover my medical+ Insurance + Pension (me) to my family

Life insurance and medical insurance are 2 separate things

43. For getting gratuity 4 1/2 years of service can also be taken? as any period in excess of 6 months can be taken as a year.

I don't think so

44. What is the age limit for life insurance

Normally, around 50/55 depends on which product you are looking at and differs from one company to another.

end faq


Your Financial Health Score!

- Are you financially healthy?

- Do you manage your money?

- Ever heard of Money Manager?

- Are you financially confused?

Know where you stand, financially!

Take Survey

Perfios News

Oct 28 2014
Be Tech Savvy, Manage Finances Smartly

Read more

Mar 21 2014
Perfios Now Supports Multi Currency

It is now possible to track and maintain non-rupee bank, credit card and Fixed Deposit accounts a...Read more

Jan 11 2014
The App Way To Manage Money

If you face difficulty in tracking your finances, here are tools that can be of help. It’s that...Read more

Whats new

Gold on Akshaya Trithya!

This year Akshaya Trithya is falling on April 24th. As usual roads leading to the ... Read more

Perfios Trendz

Perfios generates Trendz based on the aggregated and anonymized data within Perfios, the system ... Read more

Perfios re-launches its WAP Site [Press

Perfios on mobile – loaded with all the features - needed on the go.•    Easy ... Read more