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Bonds

What is a zero coupon bond? How does it work?

A zero coupon bond is a debt instrument that does not pay interest to the buyer. Instead, it comes at a discount and provides profit at maturity. Additionally, it is redeemable at face value. It falls under the fixed-income securities segment. This bond provides higher returns than regular bonds because of the yield curve. Further, the interest income you earn from zero bonds is free from taxation. If you’re wondering why to invest in a coupon bond, it is because various bonds provide regular interest payments to investors. So we will understand zero bonds in detail in this article. Read on. [B-01] Advantages of the zero coupon bond You need to understand the advantages before investing in a zero coupon bond. They are as below: Fixed Return It is the right choice for an investor who prefers long-term investment or want to earn a lump sum amount. Further, it assures a fixed return to investors till the maturity period. No reinvestment risks It does not have reinvestment risk as the bond does not pay interest regularly. Moreover, investors do not receive any cash flow. And they have to reinvest regularly. The rate they receive per year on a zero coupon bond is the same rate their money goes for in the reinvestment. It is the reason that investing in zero coupon bonds is beneficial to investors. This bond is a popular investment option when the market yield is high. Trade-in secondary market The investor can buy and sell these bonds in the secondary bond market. And they can do so before the maturity period at prevailing market rates. Low investment It is a discounted financial instrument. The value of the investment is small, which is affordable for investors who need to invest less money. Limited risk There is a limited risk when a person invests money in these bonds. Predictable returns The returns that investors receive on zero coupon bonds depend on their types. Some of the types are maturity, face value, and discounted face value. Investors can predict the returns of their investment in these bonds. Disadvantages of zero coupon bond Risk of Interest rate If the investors sell the bond before its maturity date, they may face the risk of a lower interest rate. It is because the bond value is proportionate to interest rates. It means that when the market value of a coupon falls, the rate rises. Further, the issuers can redeem the bond before maturity when the rates fall. Liquidity The bond can get liquidity. As a result, investors have to compromise on a fair price when they need funds in an emergency. The risk depends on the time duration If you buy a long-duration bond, the chances that the rate of interest will change may be high. While for a short duration, there are fewer chances of change. Income is taxable Bonds issued by REC and NABARD are taxable. Additionally, it is treated as a capital gain income. Thus the income you earn from coupon bonds is taxable during its maturity. Income is not regular You will not get a regular income of interest when you invest in the bond market. Instead, you will get the return as a lump sum on the maturity date. Trust issue The maturity period of a bond is 10, 15, or more years. It is a long-term investment that builds trust issues in the mind of investors for their investment. What is the investment time horizon for bonds? A zero coupon bond is a long-term debt instrument. Hence it is suitable for investors planning their retirement and other long-term goals. Further, they have a lower price than those available for trade on the stock exchange. Who should invest in a zero coupon bond? A zero coupon bond is suitable for those who can wait a long time to redeem the bond. If they wait for the maturity time, they get more benefits. They are ideal for investors planning for education, marriage, and retirement funds. A zero coupon bond is suitable for those who can not follow market trends. Those who like to invest and forget can also invest in this bond. Investors looking to add diversity to their portfolio can opt for this type of bond. It is also suitable for a guaranteed return at the end of the term. It is the right fit for those who want to invest their money in a long-term investment plan. Is a zero coupon bond different from a regular bond? You purchase zero bonds at a deep discount rate from the bond’s face value. As a result, you earn a good amount as returns. They have a higher return than regular bonds with the same maturity period because of the yield curve. In other bonds, the obligator has to pay interest to the bondholders. While in a zero coupon bond, they do not need to pay interest. Is investing in coupon bonds safe in India? It is a safe source of investment for fixed income and gets a good return on maturity. What amount should you invest in zero bond market securities? When you want to invest in zero bond securities, decide based on risk, reward capacity, and other crucial factors. [B-02] Conclusion Investing money in a zero coupon bond is ideal for those planning long-term investments. It is also suitable for people who want to get a fixed return for a purpose. Retirement, children’s education, and marriage are some examples. Furthermore, the investment amount is low. Additionally, you do not receive interest payments on a coupon bond. Investors need to pay taxes after the bond matures. It is capital gain taxable income. It’s not suitable for an investor who wants to earn money for a short duration due to the longer maturity terms. We hope this article answers your questions about the zero coupon bond. To know more about investment schemes, visit the Piramal Finance website. We can help you with better knowledge of financial products and services, especially credit cards and personal loan.

08-11-2023

Other

How Is EMI Calculated for an Education Loan?

The principal and interest components of EMIs are combined for an equated education loan. It refers to the monthly sum you will pay until the loan is repaid. Typically, the EMIs are set for the duration of the student loan. A significant amount of your initial student loan repayment is allocated to the interest component of the loan. As you go, a more significant part of your repayments will be applied to the principal portion of your student loan. Given the escalating expense of school, you might need more money to give your kids a good education. You might even want to send them for more expensive further education abroad. To provide your children with an excellent education, whether in India or abroad, you can apply for an education loan through a bank or an NBFC. Starting the first month, you are exempt from making monthly payments on your student loan EMIs. Even after you finish the educational course, you still have to pay for it. The loan covers a caution deposit, accommodation costs, travel costs, and even the cost of a computer or books. Up to INR 4 lakh in collateral-free education loans are available from banks. [B-02] What is an education loan calculator? An education loan EMI calculator is a tool that displays the monthly payments you must make to the lender. An education loan EMI calculator will provide your EMIs in seconds once you select the loan amount, interest rate, and loan term. The money you borrow, the rate of interest the bank charges, and the loan length all affect the EMI you must pay. The education loan calculator will display the precise monthly payments if you provide proper information. A formula box with three sliders that display the loan amount, tenure of the loan, and interest rate make up the education loan calculator. The principal and interest repayment amounts are broken down into monthly installments under the amortization plan. In seconds, you can see clearly how much of your student loan debt you have paid off and how much is still owed. How does an education loan calculator work? The following mathematical method can be used to determine the amount of your student loan EMI: [P x R x (1+R)N)/[(1+R)N-1]]. P is the principal amount, R is the interest rate, and N indicates the years you have been allotted to repay the debt. The period is measured in terms of months because EMIs are paid every month. To determine the amount of your EMI, follow these steps: Choose the loan amount using the slider. The loan tenure then has to be set in months. Pick the interest rate by sliding the slider. The education loan calculator displays the amount due, interest, and EMI due. Change the input sliders at any moment to recalculate your EMI. Moving the sliders will instantly compute your EMI. In seconds, an online education loan calculator will display your EMIs. You can see how much EMIs you will have to pay each month. It assists you in creating a spending and saving plan for your financial objectives. You may see the education loan EMIs you have previously paid off on the amortisation schedule. Additionally, you gain knowledge of the student loan’s principal balance, making it easier to plan your finances. The convenience of your home or any other location is no barrier to using an education loan EMI calculator. Things to Remember While Getting an Education Loan The majority of institutions demand an extra cost for processing student loans. The applicant or co-applicant must pay this fee and be included in the loan application. This cost might be as little as 1% of the loan’s principal or not charged. The processing charge should always be confirmed with your lending bank or in the relevant loan documentation. The processing costs are not factored into the education loan EMI calculator calculations. The Bottom Line The EMIs for a specific duration and interest rate can be calculated in seconds. Four accessible quantities are provided as the basis for calculation. You can enter several values in the boxes that need to be filled out after calculating the EMI for the education loan. These values include the loan tenure, the interest rate for the education loan, and the principal amount you want to choose. Thanks to this feature, you can experiment with various loan possibilities, which aids in their comprehension of the numerous configurations you have to choose from. This way, you can select solutions that best suit your needs and not put too much strain on loan payback. Now that you know how an EMI can be calculated using an education loan calculator, you can go to the official website of Piramal Finance and utilize the consumer-focused education loan calculator online.

08-11-2023

Business Loan

How to Check Your Cibil Score for a Business Loan

The CIBIL score or credit score is very important to consider while applying for a business loan. This score is required by banks, non-banking financial corporations and other financial institutions to assess your creditworthiness and chances of repaying a loan. A high CIBIL score indicates that you are a good credit risk and will confer benefits such as lower interest rates on loans. The CIBIL score is calculated using information from more than 6.5 billion records of loans and credit cards held by thousands of Indian lenders across the country. [B-01] Minimum CIBIL score needed for business loans All banks and financial institutions use the CIBIL score to evaluate your eligibility for a loan and decide the rate of interest that would apply to it. To get a business loan, you will have to maintain a good CIBIL score. But what is the minimum CIBIL score required for getting such a loan? The answer to this question depends on various factors such as your occupation and nature of business, the type of bank you approach for the loan, and more. For a collateral-free business loan, you will need a credit score of at least 700. When applying for a secured business loan, however, the loan can be approved for a lower CIBIL score, of 600 to 700. How to check your CIBIL score for free It is easy to check your CIBIL score online by following the steps below. Ensure all the information you enter is correct to get the right results. For a free CIBIL score check, visit the official website of TransUnion CIBIL, the company in charge of generating CIBIL scores. Select the ‘Get your CIBIL Score’ option. Enter your name and email address, and create a password to log in to your account. You will also need your identification documentation details (such as your PAN card number, passport number, voter ID or Aadhaar number) along with your pin code, birthdate, and phone number. Click on the ‘Accept’ button to proceed. You will receive an OTP on your registered phone number. Enter this OTP and click on the ‘Continue’ button. Go to the dashboard to check your CIBIL score. You will be redirected to the results page. You can now view your CIBIL score. How to get a good CIBIL score for business loans The credit rating of a business is one of the main aspects lenders look at when deciding whether or not to issue a loan. If a business has a high CIBIL score, it means that they are more likely to pay back debts on time and in full. This can help them get better rates on loans and may even help them get approved for loans that they wouldn’t have otherwise been able to get approved for. There are several ways that you can improve your business’s CIBIL score: 1. Check your credit report and dispute any errors If there are any errors in your credit report, you can file a dispute with the credit bureau or the agency that issues your credit report. Your creditors may be able to help you resolve these issues and get your CIBIL score back on track. 2. Keep your accounts active This will help you improve your score in case of any future defaults by improving your credit history. Always keep your utilities and telephone accounts active, as well as all other outstanding loans with banks or financial institutions. 3. Don’t open new accounts unless it’s absolutely necessary You can avoid the situation of being denied by opening a new account, but it’s better to wait until you have a sufficient balance in your existing accounts. The reason is that if you open a new account with a large amount, then there is a possibility that your CIBIL score will go down due to a large number of transactions. Factors affecting CIBIL scores for business loans The CIBIL company score is a measure of the creditworthiness of your organisation. It is calculated by a computerised algorithm based on your past and current financial transactions, including loans, debts, bills and payments. You can check the score with the help of various credit facilities. The CIBIL company score is calculated based on various factors such as: Payment history: This is the first and most important factor in determining your CIBIL score. If you have a good record of timely payment of bills, you will get a better score. Credit utilisation ratio: Your credit utilisation ratio is the percentage of how much credit is being used by you as compared to your total credit limit. In case you are using more than 80% of your available credit limit, then it will negatively affect your CIBIL score. New credit: Every time you apply for a new loan or credit card, it will affect your CIBIL score. So, try to avoid applying for new loans as much as possible if you want to maintain a good CIBIL score. Late payment history: Late payments not only affect your current CIBIL score but also all future scores as well (even after paying off all dues). So, ensure you make all payments on time without fail! [B-02] Conclusion The importance of CIBIL scores can not be overstated. The integrity of CIBIL scores reflects transparency in financial dealings, which is a crucial aspect of business transactions these days. A good CIBIL score can help a business strike the right deals with well-wishers and raise money at reasonable rates. On the other hand, a bad CIBIL score often becomes a daunting task for banks to deal with. So, if you are interested in raising capital for your business or even floating your company’s shares, first ensure your CIBIL score is free of malpractices. Remember, you can always check your CIBIL score for free online. Are you looking for similar finance blogs? Visit the Piramal Finance website and help yourself to the knowledge of wide-ranging financial products and services, especially credit card scores, mutual fund investments and personal loans.

08-11-2023

Mutual Funds

Investing in Equity Funds: Everything you need to know

You must know about equity fund investment schemes if you are familiar with mutual funds. But if this is your first time investing, understand that equity funds should be your top choice. They are the key to reap the most benefits. A mutual fund is a financial arrangement where several investors pool their money to buy shares. A fund manager is usually in charge of it. Mutual funds cater to a variety of individuals with varied investment objectives. But, before you invest in a plan, there are certain conditions you need to consider. They are – your investment goal, asset allocation, investment horizon, and risk-taking ability. An individual with a higher risk-taking capability can best enjoy equity funds. Equity funds may be volatile in the short term but provide higher returns in the long run. The rule is – the fund manager invests in company stocks across market capitalisation. The reason why they are also called stock funds. [B-01] What are the types of equity funds? Based on market capitalisation, we can categorise equity funds into: Large-Cap Equity Funds: A fund manager invests at least 80% of the capital in shares of a large-cap company. Mid-Cap Equity Funds & Small-Cap Funds: These need an investment of 65% of the total capital. It applies to both Mid-Cap and Small-Cap companies. Multi-Cap Equity Funds: It invests 65% of the resources in equity shares. The resources are not spent only on the equity shares of a single company but on a mix of Small-Cap, Mid-Cap, and Large-Cap companies. The varied nature of the portfolio decreases the risk percentage to an extent. Its ability to cut back losses makes it one of the best mutual funds to invest in, in the market. What are the benefits and features of investing in equity funds? Higher returns: Investors often go for debt mutual fund schemes since they are low-risk. Yet, an equity fund is the best option for creating wealth. An individual can get a wide profit margin by staying invested for five years at the least. Diverse portfolio: Equity funds invest in companies across market capitalisations. Hence, shareholders have an option for a diverse portfolio. Investors consider it one of the best mutual funds to invest in the market. If one company suffers losses, it would not have much effect on the shareholder. The reason is there are several investments in different companies. Nominal investment costs: Individuals can invest in equity shares at a price as low as five hundred rupees per month. As per Systemic Investment Plan or the SIP, the shareholders can invest a small amount of money. It takes place at an allotted time each month. They do not need to make a significant investment all at once. It is best for first-time investors: Individuals new to the mutual funds market can go for equity fund investment schemes. Professional fund managers manage the proceedings of the funds. The shareholder only needs to lay down their investment goals or objectives. The responsibility of SEBI: The Securities and Exchange Board of India (SEBI) ensures transparency of financial activities. The shareholder can see the performance graph of a particular mutual fund. They can assess the data and make decisions according to that. Limit to the expense ratio: Regular buying and selling of stocks is a common practice in equity funds. Such transactions can affect the expense ratio rate. To that end, the SEBI has put a limit to the expense ratio of equity funds at 2.5%. What are some of the best mutual funds in India? Regarding best equity mutual fund schemes, there are many options at your disposal. While choosing a plan, keep in mind its expense ratio. At times, the fund age affects its performance. As per reports, newer funds may perform better than older ones. Quant tax plan direct growth – As per ET Money, this scheme has always served well. It is an ELSS-type mutual fund plan with an expense ratio of 0.57%. Launched in January 2013, its fund age is nine years, and eight months. Quant Active Fund Direct-Growth – It is a multi-cap mutual fund scheme. This mutual fund investment plan has an expense rate of 0.58%. The fund age is nine years, eight months. Ideal for investors with at least a three-year investment window. Canara Robeco Bluechip Equity fund. The scheme is a large-cap mutual fund investment plan with a 0.38% expense ratio. Its fund age is around nine years, eight months. It is ideal for you if your investment horizon is more than five years. Nippon India Small-cap fund. It is a small-cap fund scheme launched in 2013. It has a fund age of nine years and eight months. It is pretty volatile but also provides a high rate of returns. The mutual fund has an expense ratio of 1.02%. Axis Mid Cap Direct Plan-Growth – It is a mid-cap fund with an expense ratio of 0.54%. Mid-cap funds, it is less risky and volatile than small-cap funds. Coming to returns, it is slightly lower than small-cap mutual funds. The fund age is nine years and eight months. [B-02] Conclusion Once you are aware of the types of equity funds that are available, you can start investing. Always remember that equity funds are ideal if you want to make long-term investments. They are prone to volatility. And hence, equity funds are not recommended for investment periods shorter than five years. Do you want professional advice about mutual fund management? Get in touch with professionals at Piramal Finances to find some of the best mutual funds in India. Our group of experts can help you meet your investment objectives and aid you with personal loan requirements if any.

08-11-2023

Electronics

Everything To Know About Air Conditioners (AC)

In warmer places, most homes have air conditioning. Some people may think of air conditioning as a luxury, but for many people, it is a necessity. In a tropical country like ours, where the average temperature rises daily, spending money on a good air conditioner is a good idea. But, like any other technological product, there are many options on the market, making it hard for a customer who has never bought an air conditioner before to choose the right one. But don’t worry, we’ll take care of it. Here are some things you should consider before buying an air conditioner. There are also well-known brands like Bluestar AC and O General AC, which we have included in this article. [B-01] Things to consider when buying an air conditioner Make sure you get the correct air conditioner for your home. The type of air conditioner you need depends on your needs, the design of your home, and your financial constraints. It would be best if you first choose between a window air conditioner, a split air conditioner, and a portable air conditioner. Benefits of Window AC Inexpensive Very good at using energy Simple to set up Doesn’t take up floor space Very good for extra cooling Versatile for use all year long Almost portable It can be used in a lot of places Benefits of split AC Simple to set up Outdoor units don’t look bad There are no windows needed Affordable Easy to take care of Peaceful to run Benefits of Portable AC Easy to install Moveable Require small space Less expensive Various functions Better quality air You Bring it along on road trips AC load capacity Before you buy an air conditioner, you should figure out how many square feet you need to cool. This will help you choose the right one. In India, air conditioner capacity is measured in tonnes, and the ratio of tonnes to square feet depends on the size of the room. In this case, a 120-140 square foot room should have a 1-tonne air conditioner. A 1.5-tonne air conditioner is good for a room between 150 and 180 square feet, while a 2-tonne unit is good for a room between 180 and 240 square feet. Amount of energy used Before making a final choice, check the Star Rating, which shows how energy efficient your AC is. Air conditioners with five stars use about a quarter less electricity than those with three stars. A high number of stars means that your air conditioner is very efficient and won’t use much energy to keep the room at the right temperature. Keep in mind that, on average, air conditioners with more stars cost more. Even though a 5-star air conditioner will cost more upfront than a 3-star unit, the money you save on your monthly electricity bill will make up the difference quickly. Price Once upon a time, air conditioners were considered a luxury. But as the world has gotten warmer, its popularity has gone through the roof, making it a highly sought-after good. A modern air conditioner can be bought at a price most people can afford. It costs between Rs. 25,000 and Rs. 35,000 for one tonne of air conditioning. But you can get a 1.5-ton AC for between Rs. 30,000 and Rs. 45,000 and a 2-ton AC for between Rs. 40,000 and Rs. 52,000. You’ll have to spend a little more money to get an inverter model. ACs from a few reputable companies Blue Star 1.2 Ton 3 Star Inverter Split AC The inverter compressor in Blue Star AC automatically adjusts to the temperature in the room. The 1.2-ton unit can cool spaces that are up to 140 square feet in size. It gets 3 stars for efficiency because it has an ISEER of 3.61 and uses 915.04 kWh per year. The manufacturer guarantees both the compressor and the condenser for 10 years. LG 1.5 Ton 5 Star Inverter Split AC LG is a household name in India. The company’s name is synonymous with high-quality air conditioners, TVs, and dishwashers. The LG 1.5 Ton 5-star Inverter Split AC is a great choice for any home because it is both high-quality and energy-efficient. This air conditioner has a dust filter, works without a stabiliser, and is finished in ocean black, among other things. The best part is that you can get all of this for a price you can easily afford. O General ASGA24JCC 2 Ton Inverter Split AC O General AC is unique as it can also be used to heat. Warm air will be blown around the room. Standard air conditioners work even when the temperature drops below -15 degrees Celsius. Samsung 1.5 Ton 3 Star Inverter Split AC It would be difficult to find someone who doesn’t know about the world-famous electronics brand. The Samsung 1.5-tonne inverter split AC, which gets 3 stars, is one of the best AC brands in India. Small things like the copper condenser’s high durability and the longer warranty period make this product stand out in a market with a lot of competition. In addition, the auto-clean, turbo cooling, and inverter compressor are a nice touch. Panasonic 1.5 Ton 5 Star Wi-Fi Twin-Cool Inverter Split AC Panasonic ACs are some of the best in India. It stands out from other products because of what it has. The power of the twin-cool inverter compressor changes depending on how much heat is used. This makes it quiet and saves energy. For different cooling needs, the AC has a strong, dry mode. It’s flexible and can be used in a lot of different ways. The energy rating for the AC is five stars, and it uses 840.75 kWh per year. This makes it useful and good for the environment. Panasonic air conditioners are flexible and use less energy. [B-02] Conclusion This is it! This article contains all the information you need before purchasing an air conditioner. Portable air conditioners are also great if you want to save money when everyone else is buying expensive central air conditioning systems or split-system air conditioners. Piramal Finance is the finest place to get a finance facility to buy your next Air Conditioner. Visit their website to know more about their offerings and services, such as EMIs, personal loans, credit cards, etc.

08-11-2023

Credit Score

Best Ways to Increase Your CIBIL Score

A good CIBIL score is a significant factor in any loan or credit application process. A lower score may affect your chances of getting a loan approved. Therefore, it’s important to be aware of your options to learn how to improve your CIBIL score. The CIBIL score is generated based on a person’s history of timely credit repayment. When evaluating loan applications, banks and financial institutions take the CIBIL Score into account. You stand a strong chance of having your credit card and loan applications accepted if your score is 700 or above. A good CIBIL score also qualifies you for loans with lower interest rates. [B-01] What is a Good Credit Score? A credit score is a three-digit number ranging between 300 and 900 based on your credit history. TransUnion CIBIL, one of the biggest and most well-known credit bureaus in India, assigns credit ratings to companies and individuals that range from 300 to 900. Your credit score is ideal if it lies between 750-900. A good CIBIL score demonstrates fiscal discipline and practices, increasing the likelihood of getting a loan approved with flexible conditions. Banks and other financial organisations evaluate your creditworthiness and ability to repay the loan on time with the help of your CIBIL score. CIBIL ScoreRating300-500Poor550-650Average650-750Good750-900Excellent Top 10 Tips on How to Improve Your CIBIL Score First, you need to understand the different factors that determine your credit score including repayment history, outstanding balance, age of the credit portfolio and credit inquiry. Here are some of the best ways to improve your CIBIL score. If you follow these instructions, your CIBIL score will eventually improve, giving you a better chance to obtain credit from banks and NBFCs. 1. Timely credit repayments Lenders highly consider how consistently you pay your payments when they analyse your credit report and ask for your CIBIL score. This is because past payment behaviour is often regarded as an accurate indicator of future behaviour. Your CIBIL score can be significantly lowered by even one late or missed payment. Make sure you pay all of your expenses on time, including credit card bills and loan EMIs. Don’t forget any deadlines. 2. Use several credit cards Spending excessively on just one credit card will lower your credit score. It is a good idea to use several credit cards but monitor your spending. You can also establish a variety of credit types, including some long-term secured loans like mortgages or auto loans, some secured credit cards, and some short-term low-interest loans. By doing so, you raise your credit score and demonstrate to lenders that you have good money management skills. 3. Minimum credit utilisation ratio The question “how to increase CIBIL score” has simple answers. Avoid using your credit card limit to the maximum capacity if you want to increase your CIBIL score. Your credit score suffers as a result. Let’s say you use the limit entirely. If so, make sure the payment is made in full or in part to reduce the utilisation to 60–70%. However, keep your credit utilisation ratio at 30% or less of your card’s authorised credit limit. 4. Do not discard old credit cards Some people might believe that since the old credit card isn’t being used, it’s best to close it. However, it can impact your CIBIL scores. Also, lenders view this as evidence that you cannot manage many credit lines. Maintaining older credit cards is crucial, as is paying the bills in full every time. Even if you are not using them anymore, don’t close them. If you must, close the recent ones. Maintaining old credit cards allows you to have a solid credit history, improving your CIBIL score easily. 5. Get a new credit card only if necessary Consider whether you need to open more credit card accounts or not. Having several unused credit accounts will only result in additional charges and won’t help increase your CIBIL score. 6. Do not apply for credit frequently The lender examines your credit report each time you apply for a new credit line. Every draw count as a hard inquiry, which briefly lowers your CIBIL score. Avoid filing several loans or credit card applications frequently. By comparing offers, researching, and choosing the lender offering the best deal, you can minimise the number of hard queries you make. 7. Check your credit report regularly One of the most crucial ways to improve your credit score is to check your credit report. It will help you find any mistakes in your report. You must fix any inaccuracies you find in your credit report. If you find any errors, you can contest them. The authorities will check the information and fix your report as needed. Your CIBIL score is determined based on the data in the credit report. You must ensure that the credit report is free of any errors. 8. Avoid raising credit disputes If you have made late payments and must pay penalty interest, make the required payments as soon as possible. Do not raise issues over your credit disputes. Instead, report any fraudulent transactions or unauthorised charges, as they can affect your CIBIL score. 9. Pay your dues in full Your credit dues should be paid in full or at least more than the minimum amount due. Your chances of increasing the CIBIL score are lowered if you pay only the minimum amount. 10. Monitor your CIBIL Score regularly Sometimes, you may receive an inaccurate CIBIL score. You should calculate the CIBIL score and check it in advance. It is because you won’t be able to change the report at the last minute. It will help you prepare your credit or loan application more correctly. [B-02] Conclusion Keep in mind that improving your CIBIL score is a process that will take time; there is no quick fix. To improve your CIBIL score, you must be disciplined and informed about your options. Be cautious and steady, check your CIBIL scores regularly, and make necessary adjustments. A financial expert like Piramal Finance can help you with applying for a personal loan and managing your credit card scores swiftly. Also, visit our website to learn more about finance and investment opportunities.

08-11-2023

Know More

Best Performing Hybrid Mutual Funds To Invest In 2023

Are you looking for the best performing hybrid mutual funds to invest into in 2023? Then this article is for you! As the name implies, hybrid funds invest in a wide range of assets, most commonly in stocks and debt. Their main goal is to reduce concentration risk through diversification. If equity funds are a worry for you then hybrid funds are your best option. It lessens the risk while still allowing you to pursue the highest possible profits over time. You can put your money in the most satisfactory hybrid mutual funds or best-balanced funds. For your convenience, we have compiled a list of the best performing hybrid funds to put your money into in 2023. [B-01] IClCI Prudential Equity & Debt Fund In the last three years, the ICICI Prudential Equity & Debt Fund has had a CAGR of 29.2%, and CAGR of 14.6% since its inception. The hybrid sub-category of ICICI Prudential Mutual Funds includes the ICICI Prudential Equity & Debt Fund. Rs. 5,000 in a lump-sum or Rs 100 in a SIP is the minimum amount needed to invest in the ICICI Prudential Equity & Debt Fund. For additional investment, the minimum amount is Rs. 1,000. 2. ICICI Prudential Regular Savings Fund This is the second best hybrid mutual fund to invest in 2023. It has maintained a CAGR of 10.2% for the last three years, and has a CAGR of 9.7% till date. This scheme is Suitable for investors aiming to invest a major portion of their investment in debt related instruments and the remaining one in equity. It needs a minimum investment of Rs 5,000 And Rs. 500 for additional investment. Minimum SIP is Rs. 100. 3. HDFC Hybrid Debt Fund For the past three years, HDFC Hybrid Debt Fund has had a CAGR of 13% and a CAGR Of 10.1% since its inception. It has a minimum investment, minimum additional Investment and minimum SIP investment of Rs. 100. Furthermore, this fund is suitable for investors with a primary interest to invest in debt securities and money market instruments, and have moderate exposure to equities. HDFC Hybrid Mutual Funds are also suitable for the people seeking to generate long-term or capital appreciation. 4. UTI Hybrid Equity Fund In the last three years, UTI Hybrid Equity Fund has shown a consistent CAGR of 24.9% and a CAGR of 14.6% since its inception. It has a proven performance track record of over 25 years across the market cycles. Investors looking for long term wealth creation And the ones looking to diversify through portfolio mix of equity (for growth) and debt (for limiting downside), this fund is ideal for you. It has a minimum investment amount and minimum additional investment of Rs. 1000. The minimum SIP amount is Rs. 500. 5. HDFC Hybrid Equity Fund In the past three years, HDFC Hybrid Equity Fund has shown a CAGR of 24.8% and a CAGR of 15.3%. Its objective is to generate capital appreciation or income, predominantly of equity and equity related instruments. This scheme also invests in debt and money market instruments. Like HDFC Hybrid Debt Fund, this fund has a minimum Investment, minimum additional investment, and minimum SIP investment of Rs. 100. 6. Aditya Birla Sun Life Savings Fund The CAGR of Aditya Birla Sun Life Savings Fund is 13.8% over the last three years, and an all time CAGR of 9.3%. It has a minimum investment of Rs. 5,000 and a minimum of Rs. 1,000 for SIP. This fund is ideal for investors looking for reasonable returns with convenience of liquidity over the short term. 7. DSP Saving Fund DSP Saving Fund has had a CAGR of 9.3% for the last three years, and of 8.4% since its inception. It has a track record of over 23 years and invests in high-quality money market securities. It has a minimum lump-sum investment, additional investment, and SIP investment of Rs. 500. Who Should Invest in These Funds? If you are aiming to diversify your portfolio, or if you are a conservative investor, who is unwilling to take higher risk and are seeking to earn a decent return, then this fund is ideal for you. However, hybrid funds with an emphasis on equities can accommodate investors who need their money to grow rapidly. Before investing in hybrid mutual funds, it is vital to think about the following: Investing Aims: Each investor has their unique reasons for investing. You should first determine what you want to achieve financially before settling on a savings vehicle. Risk assessment: Investors’ comfortability with different risk levels varies. You may prefer a high-risk portfolio, while another may prefer a low-risk fund. Before putting money into the stock market, you should know your comfort level with risk. This fund’s historical returns: Always research the fund’s track record of performance and compare it to similar choices, before making a decision. Rate of spending: The term is shorthand for an asset management firm’s upkeep fee (AMC). This cost differs across different plans. Hence, before investing money in a hybrid fund, one must be aware of the fund’s expense ratio. Intentional and consistent strategy: There are no middlemen involved in direct plans, as they are provided directly by the fund firms. However, conventional plans require individuals to invest through intermediaries such as brokers or distributors. When compared to standard mutual fund programmes, the fee ratio is lower in the former. Because of this, their NAV is higher than that of standard plans. [B-02] Conclusion The goal of a hybrid mutual fund is to provide investors with the advantages of both equity and fixed-income markets. The plan’s objective is to provide short-term stability and consistent income via debt while providing long-term capital appreciation through equity. The management of a mutual fund keeps the portfolio properly diversified at all times, taking into account the fund’s stated purpose and the current and future state of the market.If you’re new to both mutual funds and investing, Piramal Finance offers accurate information on banking and financial services and helps you to learn more by explaining the basics of hybrid mutual funds. Make sure your financial knowledge is up to date about essential services and products, such as personal loans an

08-11-2023

Mutual Funds

How can I start my SIP investment with INR 1000 initially?

Mutual funds are one of the most preferred investing instruments. Many people start their investment journey with mutual funds before directly investing in the stock market. It is easy and convenient for people who have little to no knowledge of investing but want to start anyway. You may already know how a mutual fund works — a fund house pools your money and invests it in a selection of stocks. The profit made from the investment is then distributed among all investors. You can invest in a mutual fund through a one-time investment or a SIP investment. However, SIP is a more common and preferred way of investing. [B-01] What is SIP? SIP is a Systematic Investment Plan. It allows you to invest a fixed amount on a fixed date in a mutual fund scheme of your choice. It is fully automated, which means you do not have to manually invest every time. Participating in SIP investment helps you build a habit of saving and investing at the same time. How to start your SIP? Starting a SIP is very simple and there are a few ways of doing it. You can visit the website of any fund house of your choice and register for a SIP online. If online registration is a hassle for you, you can go to the nearest office of the fund house and register offline. You may also go to a Mutual Fund distributor for the same. After choosing a medium, you need to complete your KYC, either online, offline, or via an agency. To complete your KYC, you must have identity proof, address proof, a copy of your passport-size photograph, and a cancelled cheque or bank statement. After completing your KYC details, you can pick any mutual fund scheme from the fund house to invest in. SIP investment is very affordable, flexible, and convenient. You can start your SIP with as low as INR 1000 (some Mutual Fund Schemes also allow you to begin your investment with INR 500). You can fix the date, frequency, and duration of your investment as per your liking. The SIP amount gets deducted directly from your bank account, therefore, freeing you from the burden of investing on time. Eventually, the size of your mutual fund portfolio will increase with this routine investment habit and result in wealth creation. In case you are unable to continue with your investments or you are not happy with your fund, you can cancel or switch to another fund anytime without any extra charges. How to choose the best SIP plans? As a new investor, it is always wise for you to start with a scheme that has a good mix of equity and debt exposure. This type of hybrid fund is great for beginners to understand what to expect in terms of returns and risks. To find the best SIP to invest in, make sure you follow these simple tips: Enquire about the fund house of your choice about their plans and compare their performance with similar funds. You can even enquire at your bank as most banks have their mutual fund schemes. Choose a mutual fund scheme that is at least 5 years old. You can easily track the overall performance through the ups and downs of the share market with that data. Any fund house that has a strong reputable background and is easily recognisable can be trusted with your investments. CRISIL-rated funds that hold a good ranking of 1-3 are the ones you should look out for. Reach out to certified experts in the field for advice and information. Always remember the wise words of Warren Buffet, “Never invest in a business you don’t understand”. So, learn before you invest. An expert can help you find the best SIP to invest in based on the assessment of your needs and risk appetite. These tips may help you find the best SIP plans that will suit your requirements, risk appetite, duration, and investment amount. Things to remember If you are planning to ride the SIP bus, it is always better to have a destination in mind. It means that you must assign a goal to your investments. It can be as short-term as saving for a trip with your friends or as long-term as planning your retirement. Why? Because it will keep you motivated and on track. To get the best out of your SIP investment you should keep these three things in mind— Discipline, Patience, and Time. There is no doubt that a SIP investment makes you a disciplined investor. You shouldn’t stop your SIP until your goal is reached. Along with this, you may want to increase your SIP investment amount by a minimum of 10% to ensure you achieve your goals sooner than you expect. It is all a game of patience. Checking your investment returns too frequently may demotivate you since it all depends on the movement of the share market. As we all know, the share market is unpredictable and volatile. So, you may not see a lot of difference in the short term. When you sow a seed, you nurture it and wait for it to grow into a plant and then into a tree to bear you fruit. It’s the same with your investments. “Good things take time” and it applies well in the context of your investments too. You cannot expect good returns overnight even if you invest in the best SIP plans available. To benefit from compound interest and generate good returns you must stay invested for a minimum of 5-10 years. So, give your investments time to grow and yield good returns in the long run. [B-02] Concluding thoughts SIP is a way to go for anyone who is starting their investment journey. INR 1000 is ideally a good amount to invest, initially. You can increase or decrease the investment amount according to your comfort. Investing is all about looking at the bigger picture; therefore, you must stick to your investment game to reap the rewards later. If there’s anything you need to take away from this article, it’s the 3 magical words— discipline, patience, and time. Consider subscribing to Piramal Finance for more such informative blogs. Looking for more banking information? Visit Piramal Finance for more informational blogs. Check out our website for other financial services like housing or MSME loans, personal loans, and more!

08-11-2023

Mutual Funds

How Do I Start An SIP Investment In A Simple Way?

You must start saving as soon as possible for a secure financial future. However, merely saving is insufficient, as you need to invest your money to create wealth. Mutual funds investment plans have emerged as popular options for many investors looking to grow their money. There are two ways to invest in mutual funds: lumpsum investment or systematic investment plan (SIP). SIP has been a well-known option with many mutual fund investors. Before you start a SIP, it is useful to understand its meaning, importance, benefits, and implications. This will allow you to plan your SIPs in a better way. Read on to learn more about SIP mutual fund investments. [B-01] What is SIP? A systematic investment plan or SIP is an investment plan in which you invest a fixed amount monthly in a mutual fund. Most Mutual funds plans offer this option for investors. This approach helps create discipline in the investors as they must deposit a fixed amount monthly in the fund. You can choose SIP for as many mutual funds in your portfolio as you like. SIP is a safer option than a lump sum investment as there is no need to time the market. As you are investing in mutual funds investment plans every month, the risk in investing is also taken care of. Over some time, you reduce the risk factors and can get stable returns on investments. Benefits of SIP in Mutual Funds Plans SIPs have become a good option for all investors for mutual funds investment plans. It does not matter if you are a new or an old investor; SIP works well for all. Some of the notable benefits of SIP in mutual funds are as follows: – Lower risk: – SIP allows you to reduce the risks in investments. As you invest a fixed sum every month, then over a period, the amount averages out. Hence, you do not need to worry about any ups and downs in the stock market. Life goals: – You can plan your crucial life goals with SIP, such as marriage, house, or car. You can start SIPs for each goal, and then, over time, you will be able to create a corpus to meet that goal. Easy and simple: – With SIPs, you do not need to worry about depositing the amount every month. Set the option in your mutual funds plans, andthe amount will be added monthly. There is no need for you to monitor it every day. Compound income: – In SIP, you invest monthly but do not take out the money. So, the returns you earn on the SIP are re-invested over a period. This helps your returns earn more income leading to the benefits of compounding. Flexible: – If you fall short of money any month, you can skip the SIP for that month. Then from the next month, you can resume the SIP as usual. There will not be any effect on your financial future. Starting SIP in Mutual Funds Investment Plans You can now start your SIP in mutual funds plans using the internet. Yes, there is no need to go to any office. You only need to provide some documents and personal details to start a SIP. Just follow the simple steps mentioned here and start your SIP mutual fund: – Gather all documents: – First, you must collect all the necessary documents. It will be useful if you can scan and save these docs on your computer. Some critical documents are your PAN Card, Aadhar Card, photographs, cancelled cheque or bank statement, etc. If any of these docs are not ready, prepare them as soon as possible. Complete eKYC: – Afterthe docs are ready, you must complete the eKYC process. This can be completed through any AMC website or RTA website. As the KYC is completed online, it is known as eKYC. You will need to attend a video call for in-person verification to confirm the details. You will also need to complete the FATCA form and provide the details as required. The documents you need to provide are PAN, Aadhar, mobile number, name, date of birth, and passport-size photo. Complete Registration: – You must complete the online registration process on the asset management company’s website (AMC). When you click on the ‘Register Now’ option, they will ask for personal and bank details. Afterward, a new user ID and password will be created. Select the mutual fund and investment amount: – Now, you will be asked to select the mutual fund plans from the available list. You will also need to specify the SIP amount you want to invest in. You can use a SIP calculator to help you decide the amount you want to invest. Finalise the payment mode: – You need to select the SIP frequency. Most investors opt for a monthly SIP. You will also need to select the date for the debit from your bank account. You can also make your first SIP at this step. Submit: – Now you need to submit the form. After this, you will receive an email and SMS from AMC. You will receive reminders from the fund house a few days before the SIP is due every month. [B-02] Conclusion SIP is one of the most well-known options used by mutual fund investors. While there is an option to decide the frequency of SIP, most investors prefer monthly SIPs. This allows the investors to create a sizeable corpus for their future needs. Start your SIPs early, as it will give your money enough time to grow. Before selecting mutual funds investment plans, you must take some time and do in-depth research. A financial expert like Piramal Finance offers you accurate and authentic information on mutual fund investment plans and personal loan requirements if any. Visit us now!

08-11-2023