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Midcap Funds vs. Smallcap Funds: Everything You Need to Know

Why do some experts consider the best midcap fund safe and the best small-cap fund volatile? Which one should you choose? These may be some of your questions regarding midcap and small-cap funds. Midcaps and small-caps are the two most popular categories in equity mutual fund portfolios. However, there is a wide disparity between them regarding performance, risk, and return. Let’s take a closer look at both of them. [B-01] Understanding market capitalization Market capitalisation is a key concept in understanding mid-cap and small-cap funds. Market capitalisation or market cap is the total value of all stocks or shares of a company outstanding on the stock exchanges. For example, if a company has 100,000 shares that have been issued at ₹10 each, the market cap for this firm would be ₹10 lakh. Companies are categorised based on their market capitalization as follows: Small-cap: Market cap <₹ 5000 crores Mid-cap: Market cap ₹ 5000 crores – ₹ 20,000 crores Large-cap: Market cap >₹ 20,000 crores What are midcap funds? Midcap stocks are those with a market capitalisation ranging from ₹5000 crores to ₹20000 crores. Mutual funds focusing on midcap stocks are called midcap funds. SBI Magnum midcap fund, Kotak Emerging Equity Fund, and HDFC Midcap Opportunities Midcap Fund are some of the prominent midcap funds in India. Although more volatile than large-cap funds, the best midcap funds are considered safer than small-cap funds since they are less prone to volatility and deliver superior returns over a longer period. How to find the best midcap fund As an investor, your aim must be to find the best midcap funds to invest in. Here are two things to look at: Diversification While looking for the best midcap fund, the first factor you need to look at is diversification. A well-diversified portfolio helps reduce overall risk by spreading investments across various sectors. Ensure their portfolios are not overly concentrated in any single sector. Fund Manager’s Track Record While investing in a mutual fund, you trust the fund manager to manage your money. Hence, the next important factor for you to consider is the credibility of the fund manager. While past performance cannot guarantee future results, it indicates a fund manager’s expertise. Ideally, you should look for managers who have shown consistent returns. You can also use fund ratings that objectively assess a fund manager based on their track record. What are small-cap funds? A small-cap fund focuses on investing in stock with a market capitalisation of fewer than ₹ 5000 crores. Since small caps are relatively riskier compared to midcaps, they often deliver much higher returns in the short term. However, you must remember that these stocks are extremely volatile and usually experience sharp declines. Hence, while small-cap stocks are great for generating quick gains, they have fewer chances of providing long-term returns. Axis Small Cap Fund, ICICI Prudential Small Cap Fund, and DSP Small Cap Fund are some of India’s most prominent small-cap funds. How to choose the best one to invest in? Here are two factors you need to consider while choosing the best from a bouquet of small-cap funds: Past Performance: To know whether a fund is performing well, you must keep an eye on its past performance. Although past performance doesn’t always indicate future results, it gives us an idea about a fund’s ability to generate returns. You should also remember that just because a fund hasn’t performed well in the past doesn’t mean it won’t perform well in the future. Several examples of funds that lost money in the last few years but recovered to beat the market. That being said, since small-cap stocks are highly volatile, you want to ensure that the fund manager can manage such volatility. Sector Exposure Small-cap stocks are heavily dependent on the domestic economy. Hence, you should take a close look at the diversification aspect of different small-cap funds before investing. Ideally, you should look for funds that have exposure to multiple sectors. For example, if the fund predominantly invests in consumer stocks, it may suffer during a downturn in the domestic economy. On the other hand, small-cap funds investing in various sectors, such as consumer, IT, banking, and others, will be better positioned to deal with an economic downturn. Midcap Funds vs. Smallcap Funds: Benefits and Drawbacks Now that you have an idea of midcap and small-cap funds, you must wonder which one you should invest in. The best midcap funds will suit you if you are looking for long-term investment opportunities. As discussed earlier, midcaps are more stable than small-cap funds, which means they are less vulnerable to volatility. They also provide greater stability in the long term. However, you need to know that despite their long history of strong returns, midcap funds have not always been reliable. In the past, midcap funds have experienced extended periods of underperformance. That being said, good performance outweighs the underperformance periods. Overall, the best midcap funds have delivered excellent returns over the past decades. However, the best midcap funds will not be appropriate if you are focused on short-term returns. In general, midcaps require a longer time horizon to achieve satisfactory returns. They have also fallen victim to market corrections more frequently than small-caps. To summarise, the best midcap fund is ideally suited for long-term investors. If you don’t mind taking some risk, they can help diversify your portfolio. A small-cap fund, on the other hand, is suitable for short-term investors. If you plan to buy stocks to sell them quickly, then small caps are ideal. In terms of disadvantages, any small-cap fund has a higher risk profile. Since they are more volatile than midcaps, they tend to experience sharp price swings. Furthermore, unlike the best midcap fund, small caps don’t possess much inherent stability. They have less capacity to deliver consistent returns over a long period. [B-02] Both mid-cap and small-cap funds have their advantages and disadvantages. Before deciding where to invest, you need to understand the pros and cons of each category. We suggest you do extensive research and analysis before investing your money. Also, as the market moves through cycles, you need to periodically rebalance your portfolio to ensure it matches your objectives.

08-11-2023

Personal Loan

All You Need to Know About Car Loan Interest Rates in September 2022

When it comes to car loans, interest rates are one of the most important factors to consider. The interest is how much you will be charged each year on the amount of your loan. It’s expressed as a percentage and is calculated based on the length of your loan, the amount you borrow, and other factors. [B-01] If you’re not careful, you could pay more for your car than you need to. So it’s essential to understand how car loan interest rates work before shopping for a loan. In this blog, we’ll discuss everything you should know about car loan interest rates in India! What is a Car Loan? A car loan is a type of loan used to finance the purchase of a vehicle. The loan is typically secured by the car itself, which means that if you default on the loan, the lender can repossess the vehicle. The terms of a car loan will vary depending on the lender, typically between two and seven years. The interest rate on a car loan is usually fixed, which means that it will not change over the life of the loan. Car loans are available from banks, credit unions, and especially from lenders. If you’re considering taking out a car loan, comparing offers from multiple lenders is essential to finding the best deal. You should also be aware of the potential risks involved in taking out a loan, such as losing your car if you default on the loan. Car Loan Interest Rates in India In recent years, the car loan market in India has exploded. With more and more people choosing to car finance their vehicles, the car loan interest rates on car loans have become increasingly competitive. As a result, getting a car loan with an interest rate as low as 8% per year is now possible. However, there are a few things to keep in mind when looking for a car loan. Interest rates vary, so comparing rates from different banks is crucial before deciding on a loan. Second, the car loan interest rate depends on the tenure of the loan, so it is vital to choose a loan term that is comfortable for you. Finally, remember that the interest rate is only one factor to consider when taking out a loan; be sure to compare processing fees and down payment requirements before making a decision. By keeping these factors in mind, you can be sure to find the best car loan deal for your needs. Car Loan Interest Rates in September 2022 In September 2022, India’s average car loan interest rates were around 9.5%. This is a slight decrease from the current average rate of 9.7%. However, it is still higher than the historical average of 8.6%. The reason for the increase in rates is due to the economic conditions in India. Inflation has been rising, and the government has taken steps to control it. As a result, interest rates are expected to rise further to help control inflation. Borrowers with good credit will still be able to get loans at lower rates, but those with bad credit will likely see their rates increase. Those considering taking out a car loan should shop around and compare rates before making a decision. Factors that Affect Car Loan Interest Rates Car loan interest rates depend on several factors. The type of vehicle Luxury and sports cars typically have higher interest rates than economy or mid-sized vehicles. This is because they’re considered higher-risk investments. The loan term The longer the loan term, the higher the interest rate will be. This is because lenders are taking on more risk by lending money for extended periods. The down payment The larger the down payment, the lower the car loan interest rate. This is because lenders view borrowers with a larger down payment as less risky. Credit history Borrowers with a good credit history usually qualify for lower interest rates than those with poor credit histories. The lender Some lenders are more interested in making money off car loans than others. It’s important to shop around to find the best interest rate possible. By taking these factors into account, you can increase your chances of getting a low-interest rate on your car loan. You can use a car loan interest rate calculator to estimate the car loan rates you are eligible for. How Can You Get the Best Car Loan Interest Rate? There are a few things that you can do to ensure that you get the best rate possible: Try to put down a substantial down payment. This will show lenders that you are serious about the loan and can make payments. Try to get your credit score as high as possible; the higher your score, the lower your interest rate. Try to find a co-signer with good credit. Having good credit to back up the loan will help lower the interest rate. By following these steps, you can ensure that you get the best car loan interest rates possible. Parting Words Car loan interest rates in September 2022 are expected to rise as the economy continues to recover from the COVID-19 pandemic. The Reserve Bank of India raised interest rates twice in 2021, and further increases are likely as inflationary pressures build. This will make it more expensive to finance a car purchase, but it is still possible to get a good deal on a loan if you shop around. Some lenders may offer promotional rates or discounts for certain buyers, so it is essential to compare offers before deciding on a loan. [B-02] With careful planning and tools such as a car loan calculator and comparison shopping, you can find a loan that meets your needs and helps you save money on your car purchase. We hope you are all clear about car loan interest rates in September 2022. But if you still need help with any financial doubts or concerns related to a car loan, you can always contact the finance experts at Piramal Finance!

08-11-2023

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Everything You Need to Know About Intraday Trading

When it comes to stock markets, there are two actions you can take. You can be an investor who buys a company stock and holds it for a long time. Or else, you could be a trader and buy or sell a stock within a short time. If you buy or sell a stock on the same day, you are a trader doing day or intraday trading. The stock market moves up and down the price curve during the entire trading day. So, if you are an intraday trader, the best part is that you can make money on both the moves, up or down. But you must know everything about being an intraday trader before starting day trading. [B-01] Intraday Trading Concepts Some basic concepts you should know about intraday trading are as follows: 1) Square Off: One essential point you must always remember is to square off your trade on the same day. Squaring off means you must buy and sell the stock by the end of the day’s trading session. 2) Leverage: This means the broker providing the trading platform gives you extra money to trade. For example, if you have INR 1000 in your trading account, the broker may leverage that amount by five times. It would mean that now you can buy or sell stocks worth INR 5000 during the day. This leverage is only given for intraday trading and not for long-term trading. 3) Day Trading Brokerage: Every broker who provides a trading account to you charges fees for its services. This fee is the brokerage, which gets charged for every sell or buy order you place. The charge varies from one broker to another. 4) Trading Indicators: In the trading platform, your broker provides, you will get a chart on display. On this chart, there are many technical indicators. These indicators can guide you in predicting the price movement of the stocks. There are many technical indicators available, and each can predict different aspects. So, you should get an in-depth knowledge of them before starting intraday trading. Important Intraday Trading Tips Important tips you must remember while doing day trading are: 1) Select a Business, Not the Stock: As a day trader, you must decide the stock to trade based on the business performance. Thus, it is vital that you first study the financial statements and the background of the company. This way, you know that the company’s stock will perform well in the stock market. Also, the past price movement of the company will give you a reasonable idea of the possible direction you should trade during the day. 2) Choose High Volume Stocks: This intraday trading tip is very important for choosing the right stock. Since this trading method is just for the day, pick high-volume stocks. When a stock has high volumes of transactions throughout the day, the range of price movement is wider. Thus, it allows you to make better profits in a short time with such stocks. 3) Stick to a Consistent Trading Strategy: You must have a consistent trading strategy while day trading. You should know precisely when you will enter and exit a transaction. Make use of the technical indicators available to you to plan your strategy. The vital point here is to stick to the trading strategy no matter the outcome. In the long run, consistency will give better results in intraday trading. 4) Develop the Discipline of Honouring Stop Loss: A stop loss is a price point that determines the most loss you will incur. Develop the discipline to honour this, as it helps in curtailing your trade losses. The stop loss is vital in day trading as the trading amount and quantity are significant. It means that you make high profits and losses with this trading method. 5) Day Trade with Expendable Money: When you are doing day trading, it involves greater risk. Thus, ensure that you use expendable money while using this trading method. This trading method even requires calculating your risk capacity per trade and day. 6) Get Rid of Emotions: It is one of the essential intraday trading tips you must follow. Emotions are the biggest enemy of day trading, and you should ignore them completely. Instead, what is necessary for you is to think objectively. Here, sticking to your trading strategy becomes crucial to make the right trading decisions. This point is going to decide your increasing profits or losses. 7) Never Trade Too Much: Follow a fixed schedule of trading with only a few stocks per day. It will ensure that you trade only a limited number throughout the trading period. The stock market trend can differ from what you anticipated, and you should stop once this happens. This way, you will cut your losses and ensure better gains in your intraday trading. 8) Keep Track of Market Trending News: There are many companies of various industries listed in the stock market. A shift in the trend of any one of them can affect the stock market. Thus, keeping track of the stock market news and changes can help you make intelligent decisions. This point is especially vital in day trading as the trading duration is short. Also, the possibility of taking corrective action is limited. Thus, tracking the news will help you enter and exit promptly. 9) Maintain a Trading Journal: A trading journal is a logbook of all your daily trades. It is where you must enter all your decisions and details of every transaction during the day. This intraday trading tip is a lifeline for all your future trading decisions. Additionally, the trading journal will provide insights into all past right and wrong trades. [B-02] Conclusion If you are someone who has a high-risk tolerance, then you can opt for day trading. This method of trading can be rewarding when you do it properly. Knowledge and practice are the two critical factors when you do intraday trading. Spend time in the stock market and ensure that you consider all the important tips provided above. For further help in day trading, you can confer with Piramal Finance.

08-11-2023

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All you Need to Know About the Gratuity Rule

You must be wondering about your gratuity entitlement if you are an employee. You may have heard about it but need clarification on what it means or how much you can get as an employee. This article will discuss the gratuity rule and how it applies to you as an employee. Keep reading to gather more knowledge about this. This blog post will teach you useful information about it. [B-01] The gratuity law can be claimed by employees who have completed five or more years of service. The gratuity law can be claimed by employees who have completed five or more years of service. This is usually taken as the end of their employment. With an employer and is paid to them on retirement or exit from the job. The gratuity amount that an employer pays to an employee after completing five years of service (or more) is called gratuity. It may be taxable in the employee’s hands if it exceeds Rs 50 lakhs per year. Or such other amount prescribed by law as per Section 32(c) of the Income Tax Act of 1961. The gratuity amount is the last drawn salary multiplied by the years of service completed. The gratuity amount that an employee receives is not taxable in your hands. And will be transferred to you after deducting an appropriate sum for provident fund contributions. Employers pay it to employees on retirement or when they leave their jobs. In the Indian context, gratuity is paid to employees who have completed five or more years of service. It is calculated as the last drawn salary multiplied by the number of years completed. Completed in service, and it is not taxable in the hands of an employee. The amount may be increased if there are exceptional circumstances, such as death due to accidents or natural causes. Retirement on grounds other than age; resignation with one month’s notice, etc., up to a legal maximum (currently Rs 200000/-) . Tax-Related Benefits of Gratuity ● The income tax that one can save from this goes up to 20%. ● With recent modifications to Section 10, gratuity is tax-free up to Rs. 20 lakh (10). ● It is a one-time cash payment made to the worker upon retirement. ● It is a tax-free amount paid by the company, not the employee. ● Statutory gratuities are the only payments free from income taxes. A gratuity is a sum of money given by an employer to a worker in recognition of their efforts, according to the Income Tax Act of 1961, which has exempted them from income tax ever since gratuities are not taxable. The maximum annual gratuity is determined based on the age at which you retire or leave your employer’s employment. It is calculated as below: The gratuity is calculated as follows: ● Last drawn salary ● 15/26 of the last drawn salary (for conductors) or 15/30 of the last drawn salary (for non-conductors). ● This can be reduced by up to 50% if there has been a long illness, maternity leave, or other circumstances. If you have worked for more than ten years with the same employer, you are not entitled to any other benefits. Like medical reimbursement, you may get more monetary relief instead of a pension plan, depending on your position within that organization. ● If you have retired from service, your gratuity will depend upon whether you were an employee during all these years, exactly as per the above calculation methodologies. Last Drawn Salary: 15/30 Number of Completed Years ● Last drawn salary: The average of the last ten months’ salary ● 15/30: The ratio of gratuity to last drawn salary NWC (number of completed years): The number of years you have worked for the company divided by 16. The gratuity limit has been raised from Rs 10 lakh to Rs 20 lakh in March 2018. The gratuity limit was raised from Rs 10 lakh to Rs 20 lakh in March 2018. This is the maximum amount an employee can claim as gratuity, and it’s a fixed amount, not a percentage of their salary. Gratuity is also a gift or parting payment, but it does not have to be paid in cash. Most companies encourage employees to use their savings or tax-free bonds. Gratuity rules for 2021 The 2021 gratuity rules went into effect on April 1, 2021. The following changes that are mentioned below were made. The following items previously considered will be excluded from salary per the new definition under the gratuity rules 2021: ● Bonus, pension, PF contributions, transportation allowance, HRA, overtime, and gratuity. ● Employees’ in-hand pay may be reduced due to these new laws taking effect. The deduction for social security programmes like the Provident Fund (PF) will go up. ● Due to the new law’s restriction, an employee’s allowances cannot exceed 50% of their base pay. Employers must raise employees’ basic salaries by 50%; it will be done to comply with this rule by limiting the allowance to 50% of the total salary. The employer will also pay more in staff gratuities, which are given to employees who have been with the business for more than five years. Employees will receive more benefits than before upon retirement as a result. Retirees should know their gratuity entitlement under the law. ● The gratuity law applies to all employees, regardless of age or service length. ● Employees who have completed five or more years of service are entitled to a gratuity of one month’s salary for every year worked over five years. ● The gratuity amount is the last drawn salary multiplied by the years completed in service (i.e., $80,000 x 6 = $480,000). [B-02] Conclusion This article has helped you better understand the gratuity rule. Gratuity entitlement is a critical topic in India. And we should all be well informed about it to make informed decisions regarding our future. The gratuity rules 2021bought Some significant changes in the gratuity rules have been explained in this article. For additional reading, you should head to Piramal Finance and increase your financial literacy. Keep reading to enhance your knowledge.

08-11-2023

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What are bonus shares, and what are the different benefits of it?

What are Bonus Shares And What Are The Different Benefits Of It? A firm offers bonus shares to its present shareholders. When a corporation cannot pay dividends to its investors, it may distribute those payments to its investors as a “bonus.” The firm may face an inability even if it had a good quarter. The firm also retains a portion of its profits. A firm may only issue bonus shares to its owners, according to the Companies Act of 2013. These are businesses that have made a lot of money or have a lot of cash. Those with a Demat account may readily trade their stocks on the secondary market to fulfil their liquidity requirements. [B-01] Capitalisation occurs when a corporation utilises its earnings or cash reserves to enhance its share capital. The corporation then distributes bonus stock. Some shareholders may be perplexed as to why a corporation would distribute such shares. Potential investors will see the firm as more successful if it earns more money per employee. Distributing Bonus Shares Investors are awarded a bonus in the form of additional shares determined by the number of shares they own. Let’s say a firm announces that it will provide a one-share bonus for every share that is already in circulation. This means that a shareholder who already owns one share of Company X’s stock will be given another share of Company X’s stock in return for the share that they already own. This will happen until the ratio is precisely 1:1 throughout the whole process. Process and Eligibility for Bonus Shares The following are the eligibility criteria for getting bonus shares as an investor: Those who possess corporation shares as of the ex-date- one day before the record date- and the record date will be eligible to receive bonus stock. The shares will be sent on a rolling basis on a T+2 basis, which means that the record date will be two days after the ex-date. Since the company won’t change the ownership of shares on the ex-date, shareholders must buy shares before the ex-date to get bonus shares. After the bonus stock has been given an ISIN(International Securities Identification Number), the bonus shares will be added to the shareholder’s account within 15 days. In this manner, bonus shares are identical to regular shares in all other respects. They are added to the Demat accounts of the existing investors in the company. As we’ve seen, this process usually takes between ten and fifteen days. Benefits of Bonus Shares Bonus shares have many benefits. Here are some of them. Investors may earn extra money while still participating in market growth. The purpose of distributing these shares is to compensate stockholders. Furthermore, the market price of these bonus shares is frequently less than the price per share, making them lucrative and accessible to investors. Furthermore, when investors finally get their bonus share, they are exempt from paying taxes, which is a significant benefit. If you have been a shareholder for a long time and want to expand your investment, you could apply for bonus shares. The corporation provides bonus shares at no additional expense to owners. As the name implies, they increase an investor’s stake in the company and, thus, the value of their holdings. Disadvantages of Bonus Shares for Investors Bonus shares do not result in any extra cash or profits for the firm. So, the distribution of these shares can be both beneficial and bad. Let’s take a look at how this impacts those that are financially stable. Even though there are now more shares in circulation, profits per share have remained the same throughout time. This is because the total amount of money produced is unaffected by the distribution of bonus shares. This also means that stockholders’ earnings will be reduced individually. Types of Bonus Shares Bonus shares are divided into two types which are described below: 1) Fully paid bonus shares 2) Partly-paid-up bonus shares Fully paid Bonus Shares Fully paid bonus shares can be described as those given to investors who already have a few shares. It doesn’t cost the investors anything extra to avail of these shares. Here are some situations in which these bonus shares could be given out: 1) A statement of profit or loss 2) Stockpiles of liquid assets 3) Reserves for redeeming capital 4) Insurance premium savings Partly-Paid Up Bonus Shares A share that has only had a portion of its issue price paid for is said to be ‘partially paid.’ This means that investors can buy shares at a discount. They need only pay a part of the full issue price. When the time comes, the rest of the payment can be made in instalments for partially paid shares. This is something multiple investors use. Partially paid-up bonus shares are those that have received a bonus. Because of profit capitalisation, the uncalled sum is not “called out,” and the shares are completely paid. If a bonus is only partially paid for, the funds for the bonus cannot come from the security account or the capital redemption reserve account. [B-02] Conclusion Bonus shares are a great investment option. But you have to look for investments that give bonus shares. Piramal Finance is one of the leading financial advisors that provide you with the best financial solutions on the market. They will help you invest so that you will receive bonus shares. They will also teach you about bonus shares and how to invest well. This way, you will reap the rewards of smart investments and make great choices too.

08-11-2023

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EPF vs. PPF: Which One Is Better for Saving Money?

A stress-free financial life after retirement is the dream for almost all people. For this, you need to save and invest. There are various schemes in which you can invest, with EPF and PPF being the most popular options for saving for a hassle-free future retirement. Read on to learn the difference between an EPF (Employees Provident Fund) and a PPF (Public Provident Fund). [B-01] What is the Employees Provident Fund (EPF)? EPF has been introduced by a statutory body called the Employees’ Provident Fund Organization (EPFO). EPFO works under the Indian Government’s Ministry of Labour and Employment. An Employees Provident Fund (EPF) is a savings scheme for building a retirement corpus. In EPF, both the employer and employee should contribute 12% on a monthly basis to the EPF account. The return for EPF is slightly higher than the PPF scheme. The amount will be deducted from your salary and sent to the EPF Account directly. What are the benefits of the Employees Provident Fund (EPF)? Here are some of the benefits of EPF: Secure Savings: As the EPF account is under the supervision of the government, it is hence a secure investment. Higher Interest Rate: The interest given for an EPF account is higher than the PPF. Flexible Choice: If there is an emergency or job loss, you can withdraw the amount from an EPF account. Contribution: This is the best benefit that you can reap from the EPF account. The savings will be contributed both by you and the employer. Withdrawal: You can withdraw the amount from the EPF account in case of an emergency. Lock-in period: The lock-in period for the EPF scheme is until your retirement. You can also withdraw in the event of a job loss. Tax Exemption: You can avail of tax exemption from the EPF scheme. As per Section 80C of the Income Tax Act (ITA), EPF is exempt from tax. What is the Public Provident Fund (PPF)? PPF Scheme (Public Provident Fund) is regarded as a secure option for saving and long-term investment in India. The main aim of the PPF scheme is to invest a small amount of money over a long period and create a corpus. The PPF scheme is maintained by the Central Government of India. A PPF account will be opened when you invest in the PPF scheme. You can invest from INR 500 to INR 1,50,000. This account is open only to Indian citizens. PPF accounts can be opened at post offices and other participating institutions. What are the benefits of the Public Provident Fund (PPF)? Here are some of the benefits of PPF: Secure Option: As the government is involved, it is one of the most secure investments. Security is the most sought-after advantage of the PPF scheme. Higher Interest Rate: The interest given for the Public Provident Fund (PPF) is higher than the interest given for fixed deposits. This is because the authority to fix the interest rates lies with the government. Flexible Deposits: The mode of depositing in a PPF account is very flexible. You can deposit via cash, cheque, demand draft (DD), or online mode. Flexible Number of Deposits: The number of deposits that you make for a year into the PPF does not matter. You can deposit as many times as you need. Emergency: During an emergency, you can partially withdraw the principal. However, it is only possible after the seventh year of account opening. Tax Exemption: The greatest benefit is the tax exemption. As per Section 80C of the Income Tax Act (ITA), the PPF is exempt from tax. The returns from PPF are also tax-free. EPF vs. PPF Here is a simple table that gives you the exact difference between EPF and PPF. This will help you compare and invest in the best option of your choice. ParticularsEmployees Provident Fund (EPF)Public Provident Fund (PPF)Providing OrganisationEPFO (Employee Provident Fund Organization) – a statutory body.Post Offices and other participating institutions.Interest Rate8.1%7.1%EligibilityOnly for salaried individuals.Any Indian citizen except NRIs.Investing Amount12% of the salary is mandatory.Can also be increased, optionally.Minimum Investment: INR 500Maximum Investment: INR 1,50,000Lock-in PeriodTill retirement or resignation15 years or 15+5 yearsTax ExemptionApplicableApplicableContributing MemberBoth the employer and the employee.Only by employees. EPF vs. PPF – Which One is Better for Saving Money? Based on the above-mentioned aspects, you can come to the following analysis. Security: When it comes to security, both EPF and PPF schemes are secure. This is because they are guaranteed by the government of India. Interest Rate: When it comes to interest rates, the EPF account is the best since it offers a higher interest rate. Contributors: Under the Employees Provident Fund (EPF), both the employee and the employer will contribute. However, in the PPF scheme, only the employee will contribute. This makes EPF a better option. Withdrawal: When it comes to withdrawal, EPF is the best option, as you can withdraw whenever you need. Because under the PPF scheme, you will be able to partially withdraw only after a certain period. [B-02] Final Takeaway By now, you must have a better understanding of the differences between the EPF and PPF. It is best to choose EPF as the saving scheme for a retirement corpus. This way, you can select the best savings instruments that match your personal financial goals after retirement. If you have any doubts about your finances, feel free to contact Piramal Finance. Piramal Finance works with a pool of financial experts who will help guide you through every doubt and process. To read more about such topics, visit Piramal Finance. I wish you a happy and peaceful life after retirement!

08-11-2023

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Everything you need to know about Sukanya Samriddhi Yojana

The well-being of girls is one of the core things which should be focused on. This is especially needed in rural areas. For decades, women weren’t provided with the same facilities and benefits as men in India. Its damage to the progress of society can’t be denied. In today’s society, there are many aspects of girls which can be improved. Some of them include: Education for girls. Healthcare. Employment. Safety. Education for girls is one of the areas which needs the most upgrade. For this, PM Narendra Modi launched the “Beti Bachao Beti Padhao” campaign on 22nd January 2015. One of the most prominent schemes of this campaign was Sukanya Samriddhi Yojana. The article below will discuss everything you need to know about it. [B-01] What is Sukanya Samriddhi Yojana? This scheme is a worthy choice for parents to fund their daughter’s future until her marriage. Under the scheme, the girl’s family should set up a Sukanya Yojana account for her. This should be done before she is ten years old. The account will expire 21 years after being set up. This limit does not apply if the girl marries before the end of that period. The Sukanya Samriddhi Yojana account does not work after marriage. If there are no deposits in any of the years, the banks consider the account “default”. The minimum amount that you can invest is ₹250 per year. This is very helpful for low-income families. The maximum amount is ₹1,50,000 annually. You can set up a Sukanya Samriddhi Yojna account in most authorized post offices and banks. The process is done through online means as well. You should submit the documents for the girl’s identity. These include birth certificates, an Aadhaar card, etc. Other Sukanya Samriddhi Yojna Details You must make annual deposits to the Sukanya Samriddhi Yojna account for 15 years after setting it up. The deposit will continue to accumulate until the account expires. Annual interest will be charged on it as determined by the Government of India. This interest is calculated based on your minimum account balance from the 5th to the end of the month. Henceforth, your best option would be to pay the instalments before the fifth day of every month. Upon maturity, the girl will receive the entire accrued amount. Usually, the account is established and handled by her parents or guardians. Yet, she has permission to operate it herself from the age of 18 by submitting the required documents. When the girl reaches 18 years of age, partial withdrawal of up to 50% of the balance is allowed to meet the need for her education. Besides a written application, you will need a fee slip from the institution. A certified admission offer from the school stating the necessary funds will also do. The withdrawal amount will only be as much as the true demand for the fee. The charges in the admission offer or the apt fee slip given during admission are also covered. The early closure/withdrawal of the account is only valid in the following cases: If the girl suddenly passes away. If the girl is no longer a citizen. The change in citizenship should be informed one month before the bank. The depositor is financially unable to contribute to the account. If the girl marries as soon as she turns 18. The owner of the account should appeal twice: One month before the marriage Three months after the marriage. Calculation of Interest: The Government uses G-sec yields as a basis to determine the interest rates quarterly. Currently, the Sukanya Samriddhi Yojana has a 7.5% interest rate differential over the G-sec rate for a similar maturity. The account will be credited with annual compound interest at the rate that the government will announce. If the account holder chooses monthly interest, it will be calculated on the following basis: On the account’s balance in completed thousands On the balance that will be paid to the account holder In the fraction of thousands that remain, which will continue to earn interest at the rate in effect. The amount rounded off to thousands is considered for monthly interest. The remaining balance will continue to accumulate interest at the current rate. The deposits between the end of the 10th day and the end of the calendar month are used to calculate the interest. It will calculate interest for the entire month. The calculation is based on the account’s lowest balance. Benefits: The returns offered by the Sukanya Samriddhi Yojana are a huge source of comfort to families. Currently, its interest rate is 7.6% annually. It is higher than the interest earned on bank deposits and other scheme instruments. This makes it a safe option for families to invest in a girl’s higher education or future marriage. Let’s sum up all the advantages of the SSY scheme. The account can be opened with a deposit of a mere Rs.250, making it affordable for millions of families in India. You can withdraw nearly half of the entire accumulation. This will likely meet the needs in studies and marriage. There is no tax on the annually compounded interest. The same goes for the sum received when the account expires. You are not required to make further investments as soon as the account reaches fifteen years. The collected savings will keep accumulating interest until the owner shuts it down. [B-02] Conclusion: Families often search for an income source for the bright future of their daughters. Sukanya Yojana is highly useful for them. The scheme provides stable financial support to the family. It includes a sovereign guarantee. It is an EEE program that allows parents and daughters to utilize it in many ways. You can check out further details and queries about the Sukanya Samriddhi Yojna on our website Piramal Finance. It’ll be our sincere pleasure to help you out.

08-11-2023

Know More

Top Biggest Upcoming IPO For The Year 2022

If you are beginning your investment journey, you might have missed out on the IPOs of Indian companies. These are very popular among investors as they give good returns within a year of their listing on the stock exchange. If you have missed out on these IPOs, you need not worry. In this article, you will find everything about the top 10 upcoming IPOs in India for 2022. These IPOs will offer you a great chance to create a portfolio with high returns. What is an IPO? IPO is the initial public offering of a company’s shares. This process is typically done when a company has become stable, which usually takes about 3-5 years. Many companies will hold their IPO for some time after they have been listed on the stock exchange. In India, a company can list its shares on one of the two public stock exchanges: the BSE, or Bombay Stock Exchange, based out of Mumbai and the NSE, or National Stock Exchange, based out of New Delhi. You can choose from a range of IPOs, based on what you want to achieve through your investment. Top 10 Upcoming IPOs in 2022 Following are the best upcoming IPOs of 2022 that you should consider investing in: 1. MobiKwik As per the latest IPO news, Mobikwik will list itself on the stock market in 2022, and the IPO will be for ₹15,000 mn. The company will list its IPO both on the BSE and NSE. Founded in 2009 by Bipin Preet Singh and Upasana Taku, Mobikwik is an Indian fintech company registered under the name One MobiKwik Systems Pvt Ltd. It provides phone app-based payment services. The Mobikwik Wallet is one of the most prevalent mobile wallets in India. 2. GoAir GoAir is an ultra-low-cost carrier, with a rising share in the Indian market. Its share has risen from 8.8% in the fiscal year 2018 to 10.8% in 2020. The airline currently has 56 aeroplanes, connecting 28 domestic and 9 international destinations. In its initial public offering, the airline plans to list up to ₹3,600 cr in equity. 3. Penna Cement One of India’s leading cement producers, Penna Cement operates out of four cement factories in Telangana, Andhra Pradesh, and Maharashtra. Its total production capacity is 10 mn tons a year. The company is projected to raise ₹1,550 cr through a public equity offering, of which ₹1,300 cr will be raised through a new equity share issue and ₹250 cr through an offer for sale. 4. Arohan Financial Services Arohan Financial Services works in India’s low-income, unexplored states, making it one of the leading NBFC-MFIs in the country and earning it a spot in the top upcoming IPOs in 2022. The company provides a range of credit and insurance products. Under credit, the company offers income-generating loans and other financial aid. It also provides life and health insurance products. Arohan Financial Services plans to raise between ₹1,750 cr and ₹1,800 cr. Through its IPO, ₹850 cr will be sold in fresh issues, and the rest will be sold in a secondary market. 5. Delhivery In the fiscal year 2021, Delhivery was one of India’s largest and fastest-growing fully integrated logistics service providers. The company provides a wide range of logistics services, including heavy goods delivery, express parcel delivery, partial truckload and truckload freight, warehousing, and supply chain solutions. According to the latest IPO news, it will sell an offering of new shares worth ₹5,000 cr while a simultaneous offer to sell (OFS) component worth ₹2,460 cr. 6. Fincare Small Finance Bank With a focus on unbanked and under-banked clients in rural and semi-urban areas, Fincare is a digital-first small finance bank. Their business model highlights financial inclusion and provides affordable financial products and services to people and firms. A ₹1,300 cr Fincare IPO will include a new issue of equity shares of ₹330 cr and an OFS of up to ₹1,000 cr. 7. Seven Island Shipping Incorporated in 2002, Seven Island Shipping trades petrochemical lubricants, crude oil, and other commodities. One of the top priorities of this company is to offer safe transportation while also being clean and efficient. As one of the top upcoming IPOs in 2022, the company plans to raise funds worth ₹600 cr, with a fresh issue of ₹400 cr and OFS worth ₹200 cr. 8. SREI Equipment Finance SREI Infrastructure Finance Ltd owns and operates this Kolkata-based company, SREI Equipment Finance. It provides loans to buy equipment for construction, irrigation, water supply, mining, IT infrastructure, healthcare, and farming. A total of ₹2,000 cr will be raised through its IPO, which consists of equity shares of ₹1,100 cr and OFS of ₹900 cr. 9. ESAF Small Finance Bank Among the small businesses in India, ESAF Small Finance Bank is the principal bank in terms of the number of clients, average earnings, interest rates, payments from deposits, loans to rural areas, and the number of loans offered. A new issue of ₹800 cr worth of shares will be made, which will include an OFS worth ₹200 cr. 10. Inspira Enterprise India Inspira Enterprise India works on digital transformation services in the cybersecurity industry. As one of India’s leading firms in this field, Inspira is known for providing only the best to its clients. The company’s IPO includes a public share sale of ₹300 cr, followed by an OFS for equity shares of ₹500 cr. [B-02] Conclusion The top upcoming IPOs in 2022 look very exciting for investors. These IPOs show that the Indian economy is thriving. With so many new companies going public, consumers can enjoy more options and lower prices. If you’re interested in investing or want to learn about some of these great companies, you should read more articles like this on Piramal Finance. While there, you should also take a look at their financial products and services to help you build your plan your finances better.

08-11-2023

Mutual Funds

Which is the Better Investment Instrument: Mutual Funds or PPF?

You need to invest your money to make it grow. You can invest in many schemes to earn good returns and create a corpus for your future. On top of that, many of these saving schemes also offer you tax benefits, i.e., they help you save on income tax. Two of the most popular options to invest your funds are mutual funds and PPF. So, which one should you choose? Read on to learn more about their suitability for your financial profile. [B-01] About PPF PPF, or Public Provident Fund, is a popular savings scheme in India. Many people invest their money in PPF because it is a risk-free option. To start saving in the PPF, you must open a PPF account with a bank or post office. Then you can invest up to Rs. 1.50 lakhs a year in PPF, either as a lump sum or in installments. As per Section 80C of the Income Tax (IT) Act (1961), you can claim a tax deduction of up to Rs. 1.50 lakhs for the money you invest in PPF. The minimum period for PPF is 15 years, but there is no maximum period. You can extend your PPF account in blocks of five years for as long as you want. You need not make any new deposits during this period but can draw only partial amounts. The interest rate on PPF is set by the Indian government every year. There is also the option of taking a loan against your PPF from several banks for your urgent needs. The amount you receive after the PPF account is closed is tax-free. About Mutual Funds Mutual funds are savings plans that are managed by a fund manager from an asset management firm. Mutual funds collect money from several individuals and then invest it in various schemes, such as stocks, gold, bonds, and ETFs. There are many types of mutual funds that are available, and you can select any number of them. You can invest in mutual funds as a lump sum or as a systematic investment plan (SIP). You can also save on your taxes when you invest in ELSS, a special type of mutual fund that offers IT benefits under Sec. 80C up to Rs. 1.50 lakhs annually. While ELSS funds have a lock-in period of three years, other mutual funds do not have a lock-in period. The return on mutual funds is based on the fund manager’s decisions, i.e., where to invest the money and for how long. While there are no fixed returns on mutual funds, they are usually better than other long-term saving schemes. If you have a time horizon of over five years, mutual funds can help you create a decent corpus for your retirement. After opening a Demat account with any fund house or service provider, you can invest in mutual funds. Mutual Funds vs. PPF: Which is a better option for you? This is a question that most people worry about when they decide to start investing and saving. PPF and mutual funds are two of the most well-known options most investors opt for. But which of these two is the best? Read on to learn more. 1. Returns: PPF gives tax-free returns. This means the corpus you get after closing your PPF account does not have any tax. The interest rate on PPF is set by the government every year. Hence, it is a risk-free scheme that can give you good benefits if you invest with a long-term goal. In the case of mutual funds, returns are based on the market situation. This is because fund managers invest money in various schemes and assets. While there are no fixed returns, mutual fund returns are usually higher than other schemes. This can help you beat inflation and create a corpus for your future. 2. Tax benefits If you want to get IT benefits, you can invest in ELSS, a special mutual fund. This scheme has a lock-in period of three years and gives tax benefits under Section 80C. A three-year-long lock-in period is the shortest for any scheme offering IT benefits. So, you can save a lot on your IT deductions when you invest in ELSS. When it comes to PPF, you can get tax benefits under the same section of the IT Act. Though the locking period for PPF is a minimum of 15 years, you can extend it in blocks of five years for as long as you want. This is, in fact, the longest lock-in period for any saving scheme. 3. Limit There is no limit on how much you can invest in mutual funds. Even for ELSS, while the tax benefit limit is Rs. 1.50 lakhs, there is no cap on the maximum amount. As a result, you can invest as much as you want and still make a profit. This can be a good option if you have in-depth market knowledge. However, in the case of PPF, the maximum amount you can invest is Rs. 1.50 lakhs in one year. There is no option for you to invest more, even if you want to. Hence, your chances of saving more are reduced. [B-02] Conclusion PPF and mutual funds are two of the best saving schemes at present. They both have benefits, so you must decide based on your personal preference. Any scheme that can meet your needs and goals is the best option. To learn more about deciding on your future financials, visit Piramal Finance. They have many articles and blogs to help you acquire better finance skills.

08-11-2023