Author Archive: Annapurna Shastri

Budget 2014- from an investor’s perspective




The union budget 2014, one of the most awaited events since the Modi government came to power, was presented yesterday by the finance minister.

Here is what  it means/changes for you as a common investor and tax payer-

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Do housewives need life insurance?



The main purpose of life insurance is to provide financial stability to the breadwinner’s dependent family members in the event of his untimely death. Today it is more common to find women who are financially independent with careers; yet there are a significant number of them who choose to stay at home and take care of the house and their young children.

In such families, it is usually only the husband who takes a life cover for himself as the housewife is perceived to have no monetary value. Even the life insurance companies prefer insuring working people – many of them do not offer to insure housewives or have an upper limit on the maximum insurance cover which can be provided, that too subject to the husband’s income and existing cover! They do have a seemingly very valid argument for this – while the loss of  a stay at home mom or wife is an irreparable loss for the family in emotional terms, since she doesn’t contribute to the family income in any way, it doesn’t have any monetary impact. And since the loss of income is what an insurance policy is supposed to protect against, it doesn’t make sense to insure her and is viewed as an unwanted expense.

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Why it is important to read the fine print


We live in an era where almost every product is sold using aggressive marketing techniques. Most products in the finance domain- credit cards, loans, bank account, real estate are advertised using eye catching colorful images and bold text. And using fine print has become a common method of advertising – all the positives and attractive features of the product on offer are highlighted in bold and the accompanying conditions, restrictive clauses and “not so attractive” features which could influence the prospective client to re-consider his buy decision are very carefully tucked away in small or fine print somewhere at the bottom part of the page or the last page.

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Using indexation to earn a guaranteed tax free profit, yet book a loss



The captioned statement may sound too good to be true, and it is only fair if you think – “there must be a catch somewhere”. Honestly, there isn’t and this concept of indexation benefit, if properly understood and implemented, is one of the most powerful tax planning tools; and if timed correctly can not only be used to make your returns on debt and debt oriented investments tax free, but also enable you to book a long term capital loss which can be offset against any other long term capital gains.

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Preparing yourself financially for a job loss



Even as I write this, India’s job market is going through one of the worst crises ever. Two of the largest sectors – finance and IT which employ the majority of India’s workforce are experiencing a major slowdown. A leading IT company was in the news recently for laying off as many as 1000 employees in the tech capital of Bangalore without any notice.

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Avoiding money conflicts in your relationships

“ Money may not buy love, but fighting about it will bankrupt your relationship”

This is a quote from an unknown author, but very apt in the current scenario.

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Product Review- Double My Money scheme by DHFL Fixed Deposit

Dewan Housing Finance Limited (DHFL) has launched a fixed deposit scheme  which enables the customer to double their investment in a timeframe ranging from 80 months to 86 months depending upon the client category and the amount to be invested as per the table below –

Deposit Amount


General Category

Deposit doubles in

Senior citizens, Shareholders and loan holders

Deposit doubles in


 Less than Rs. 25 lac.

Rate of Interest (% p.a.)


  86 months



Annual Yield




Deposit Rs. 25 lac & above

Rate of interest (% p.a.)


84 months



Annual Yield




This is a cumulative interest scheme with half yearly compounding of interest. The minimum amount required to be deposited is Rs. 10,000/-

About the company

Dewan Housing Finance limited is one of the largest housing finance companies in the country and has been in operation for 29 years now. DHFL fixed deposits are rated AA+ by CARE and FAAA by Brickworks, which makes it reasonably safe for investing. Apart from this new scheme, the company offers regular fixed deposits (DHFL Aashray Plus) of tenures ranging from 1 year to 5 years.

About the scheme

The scheme works like any other fixed deposit with standard features, the only difference being the longer tenure which gives the investor the benefit of compounding and an attractive annual yield. There are other fixed deposits rated as investment grade like Shriram Transport and Mahindra and Mahindra which offer similar rates of interest per annum. However the maximum period for which one can stay invested in these is 5 years. The scheme suffers from the advantages (higher interest rate than bank FDs, flexibility) and disadvantages (unsecured/risk of default, no deposit insurance) associated with company FDs.

Investors looking to invest in fixed income schemes for a longer term can consider these.

DISCLAIMER : All the views expressed here are just for informative purposes and do not constitute or indicate any kind of investment recommendation.

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