What is eInsurance

 

Have you taken various types of Insurance from various insurer companies and find it difficult to manage it  ?? your solution is  eInsurance .

 What is eInsurance :

 eInsurance account  is a digital account where all  your Insurance policies can be saved and kept in the digital form.

 It means managing all your health insurance, life insurance, motor vehicle insurance, travel insurance, and other insurance policies digitally in a single account.

 It is exactly like holding shares in a Demat account. The policyholders of an eInsurance account can access their all insurance portfolios in a single  clicks.

 How Does It Work?

Much like having depositories for Demat services, there are service providers who open an insurance repository to store insurance policies of individuals. The insurance policies of different insurers can also be stored in the same account. Each insurance company has repository partners who help the company’s issue policies in the digital form. Individuals can opt for any of both, insurance company or the repository itself to open the e-insurance account. There are 5 authorized repositories to open an e-insurance account:

·              NSDL Database Management Limited

·              Central Insurance Repository Limited

·              CAMS Repository Services Limited

·              Karvy Insurance Repository Limited

·              SHCIL Projects Limited

Note: An individual can hold only one e-insurance account.

Is It Mandatory To Have An E-Insurance Account?

No. Having an e-insurance account isn’t a necessity. However, some times in some policies IRDAI makes it mandatory to have E insurance account.. Since an e-insurance account is all about keeping your policies safeguarded from policy loss; the need for it is anticipated.

How Will An E-Insurance Account Be Useful?

E-insurance account holder enjoys multiple benefits by opening one e-insurance account. Below listed are the few points that suffice how useful an e-insurance account is:

·  Opening an e-insurance account is absolutely free.

·  The insurance policy in digital form prevents the policy from loss and theft.

·  One can access his insurance policy anytime, anywhere in a few clicks since it is in an electronic form

·  All the insurance policies can be monitored in one account, it is easy to track the policy status

·  The premium of your insurance can be paid online instead of wasting time standing in queues and paying through cash.

·  E-insurance subscriber doesn’t have to submit KYC document every time he buys a new insurance policy. Online Insurance account number is required for this process.

Is It Easy To Open An E-Insurance Account?

Yes, it is very easy to open an e-insurance account. You can do it offline or online . in offline You need to download an application form to any insurance repository of your choice, fill it and submit it along with self-attested necessary documents as identity proof, address proof, and a canceled cheque.. for online opening visit the site of any insurance repository and register  after opening  you  can store all your electronic insurance policies inclusive of health, life, and other insurance policies from different insurers in the same account.

What Are The Charges For This?

Opening an e-insurance account is free of any charge .

 

How Many Days Does It Take To Open An E-Insurance Account After All The Necessary Formalities Are Completed?

Approximate seven days or less. Once the account is created successfully, the subscriber of the account gets a welcome kit. The pin number for the account is sent separately. Then you can log in and add all your insurance policies taken from different insurers.

 @Ajit Kumar Singh

What is Multi Cap Fund

 

Should you invest in SBI Multicap Fund NFO

SBI mutual fund will shortly be in launching a New Fund Offer (NFO) for a multicap equity fund, SBI Multicap Equity Fund. The NFO launches on February 14 and closes on February 28, 2022

What are Multicap Funds?

Multicap mutual funds are diversified equity mutual fund schemes which invest across market cap segments i.e. LARGE CAP, MID CAP and SMALL CAP. Multicap funds are mix of above three caps. Multicap Funds are new concept , earlier there used to be  individual cap funds like Large Cap funds, or Mid cap Funds or Small Cap funds , but now SEBI has approved a new category of Fund called Multicap fund which is a mix of all three caps.  As per SEBI’s circular in September 2020, multicap funds must invest at least 25% of their assets in large cap stocks, at least 25% in midcap stocks and at least 25% in small cap stocks. Investors should note that multicap funds will have minimum 50% exposure to midcaps and small caps.

What is Large Cap , Mid Cap & Small Cap

In short these are Equity funds of Large Companies , Mid Size Companies & Small size companies. 

How Multicap Funds work :

 We all know that economy of any country keeps changing . Different segments of the market outperform each other in different market conditions ..When market is in bear mode  Large caps usually outperform small and madcap & When market is in bull mode Midcap and small cap stocks tend to outperform  Large cap. So multicap funds adjust itself as per market scenario , when market is in bear mode Fund manager increases the proportion of Large cap as per need and when market is in bull mode Fund manager reduces proportion of Large cap and increases mid cap and small cap  giving the best optimum result.

 Should you Invest in SBI Multicap Fund

 SBI MF house is Launching Multicap Fund on 14^th Feb till 28^th Feb , during this NFO period fund is available at a Price of Rs. 10 per unit . After that fund  will be available as per NAV of the day .

 SBI Mutual Fund has a proven track record of delivering superior performance across product categories i.e. large cap funds, mid cap funds and small cap funds.

SBI MF’s long term track record gives us the confidence about SBI Multicap Fund’s alpha creation potential in the future too.

What are  strategies of SBI MF to create higher returns in Multicap Fund

1.     The fund will not have any sector or style bias as the outcome of portfolio selection will be based on the analyst recommendations, the company said in its statement. “The Fund combines the strength of high conviction stock ideas of the sector analysts that will be selected from the fund house’s active coverage universe (~350 companies). The high conviction ideas recommended by the analysts are arrived at after a robust 7-step research process wherein ranks and confidence scores are assigned to each recommendation.."

2.    Unconstrained, sector agnostic approach.

3.    Active Stock Management with Bottom-up strategy.

4.    High Conviction Play through Analyst Portfolio.

5.    Style Agnostic with broader opportunity set for stock selection.

6.    Strong pedigree of Investment Expertise across market cap.

7. The fund offers MITRA SIP feature, which will let investors invest through a Systematic Investment Plan (SIP) and simultaneously register a Systematic Withdrawal Plan (SWP) which will be activated at the end of the SIP period to generate tax-efficient regular cash flows.

 

Conclusion  :

     SBI  Multicap Fund  will be  an ideal investment option for investors who would like a mix across market cap as they provide diversification of opportunities and growth potential while getting the benefit of limiting downside risk and who have a investment time horizon of minimum 3 years for best result as the fund will be a pure equity fund and such funds are volatile in short period of time.

@Ajit Kumar Singh

How to get Rs. 1,30,000 (Rs. 1.30 Lakh ) monthly pension

 

How to get Rs. 1,30,000 (Rs. 1.30 Lakh )  monthly pension

Assume you or your spouse are 35 years old and wish to get a monthly pension of Rs  1.30 Lakh or  Rs.50,000 after reaching the age of 60. In this case, you will have to deposit Rs 15,000 in this scheme on a monthly basis. You must put this money aside until you reach the age of 60. In this manner, you will have to deposit Rs 45 lakh in this scheme over a period of 25 years. Your maturity amount will be roughly Rs 2 crore when you reach the age of 60.

With Rs. 2 crore in hand  @ age of 60,  you have 2 options :

1.     Invest full amount in purchase of Annuity , in that case you can get Rs. 1 Lakh per month life time as pension assuming 6% annuity purchase rate.

2.     Take back  60 percent of this, or around Rs 1.20 crore, in a single sum called commuted pension which is Tax Free, (and invest in Mutual Fund with SWP of Rs. 80000 pm life time and your corpus keeps growing too)  with the remaining Rs 80 Lakh available as  annuity purchase.

If the annuity rate is 7% at the time, you will receive a monthly pension of around Rs 50,000 for life time .

In the event of the scheme holder's death, the remaining amount will be paid out in a lump payment to his or her nominee.

Please Note that pension is treated as Salary for Tax purpose so Income from Pension is Taxable at your slab rate in case of Annuity. However Income from SWP is subject to capital gain which is exempt upto Rs. 1 lakh per year)

 

@Ajit Kumar Singh

 

How to make your wife rich and self reliant ??

Your wife would get Rs 45,000 every month as pension and a lumpsum of around  Rs. 60 Lakh for as little investment as Rs. 5000 pm.

If you want your wife to become self-reliant so that in your absence there is a regular income in the house and in future, your wife does not depend on anyone for money, then you can arrange regular income for her today. For this you should invest in National Pension Scheme.

Open new pension system account in the name of wife: You can open a New Pension System (NPS) account in the name of your wife. The NPS account will give a lump sum amount to your wife on attaining the age of 60 years. Along with this, they will also have regular income in the form of pension every month. Not only this, with NPS account you can also decide how much pension your wife will get every month. With this, your wife will not depend on anyone for money after the age of 60. Let us know about this scheme in detail.

You can deposit money every month or yearly as per your convenience in the New Pension System (NPS) account. You can open an NPS account in the name of your wife with just Rs 1,000. The NPS account matures at the age of 60. Under the new rules, if you want, you can run the NPS account even till the age of the wife is 65 years.

Monthly income up to 45 thousand: For example, if your wife is 30 years old and you invest Rs 5000 every month in her NPS account. If she gets 10 per cent return on investment annually, then at the age of 60, she will have a total of Rs 1.12 crore in his account. They will get about 45 lakh rupees out of this. Apart from this, they will start getting pension around Rs 45,000 every month. The most important thing is that they will continue to get this pension for life.

How much will she get pension?

• Age- 30 years
• Total investment period – 30 years
• Monthly contribution –  Rs 5,000
• Estimated return on investment- 10 per cent
• Total pension fund – Rs 1,11,98,471 (can be withdrawn on maturity)
• Amount to buy annuity plan – 44, Rs 79,388
• Estimated annuity rate 8 per cent – Rs 67,19,083
• Monthly pension – Rs 44,793.

NPS is the Social Security Scheme of the Central Government. The money you invest in this scheme is managed by a professional fund managers like in Mutual Funds. The central government appoints these professional managers to manage the fund.. In such a situation, your investment in NPS is completely safe. However, the return on the money you invest under this scheme is not guaranteed however past analysis  shows  NPS has given an average  10-11%  since its inception.

Note : Contribution to NPS can be made either like SIP or Lumpsum . Minimum Rs. 6000 per year should be contributed (Rs. 500 pm) . There is no maximum limit to contribute , so if you contribute Rs, 10000 pm for 30 years there is likely that your wife may get pension of around Rs. 90000 pm  AND a lumpsum on exit.

 

Digital Currency and Blockchain

 What is Digital Currency &  Blockchain ???

 In the Budget speech Finance Minister Nirmala Sitaraman has mentioned about introduction of Digital Currency using the Blockchain.

 Now every one wondering what is Digital Currency and Blockchain .

 What is Digital Currency

 Digital money  (or digital currency) refers to any means of payment that exists in a purely electronic form. ... Digital money is exchanged using technologies such as smartphones, credit cards, UPI and online cryptocurrency exchanges.

 What is Blockchain..

 The Blockchain is a software protocol (like SMTP is for email). On which Digital Currency (and other transactions ) will run . It is comprised of several pieces: a database, software application, Internet , some connected computers, etc.

 Blockchain is a system of recording information in a way that makes it difficult or impossible to change, hack, or cheat the system. A blockchain is essentially a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems on the blockchain.

 The blockchain is used for the secure transfer of items like money, property, contracts, etc, without requiring a third-party intermediary like a bank or government. Once data is recorded inside a blockchain, it is very difficult to change it.

 

Sometimes the term is used for Bitcoin Blockchain or The Ethereum Blockchain, and sometimes, it’s other virtual currencies or digital tokens. However, it may be noted that

 

Bitcoin is digital currency and Bloackchain is a software on which Bitcoin is traded.

• Blockchain is not Bitcoin,( or Cryptocurrency  or digital currency), but it is the technology behind Bitcoin or Digital Currency.
• Bitcoin is the digital token, and the blockchain is the ledger to keep track of who owns the digital tokens
• You can’t have Bitcoin without blockchain, but you can have a blockchain without Bitcoin.

Applications of Blockchain Technology

Here are some common applications of Blockchain:

• It is used to create a secure and transparent digital ledger of all transactions.
• It allows you to create a tamper-proof record of academic achievement that is accessible to all students and teachers.
• It is used for creating a more efficient system for trading securities.
• Lenders use blockchain to execute collateralized loans through smart contracts
• Using blockchain technology to record real estate transactions can provide a more secure and accessible means of verifying and transferring ownership.
• Use for keeping data like Social Security number, date of birth, and other identifying information on a public ledger.
• Blockchain technology is also used in the logistics industry as it helps to track items as they move through a logistics or supply chain network.

Limitations of Blockchain technology

Higher costs: Nodes seek higher rewards for completing Transactions in a business that work on the principle of Supply and Demand

Slower transactions: Nodes prioritize transactions with higher rewards, backlogs of transactions build-up
Smaller ledger: It is not possible to a full copy of the Blockchain, potentially which can affect immutability, consensus, etc.

Transaction costs, network speed: The transactions cost of Bitcoin is quite high after being touted as ‘nearly free’ for the first few years.

Risk of error: There is always a risk of error, as long as the human factor is involved. In case a blockchain serves as a database, all the incoming data has to be of high quality. However, human involvement can quickly resolve the error.

Wasteful: Every node that runs the blockchain has to maintain consensus across the blockchain. This offers very low downtime and makes data stored on the blockchain forever unchangeable. However, all this is wasteful because each node repeats a task to reach a consensus.

@Ajit Kumar Singh : Writer is a pure Finance Professional but knowledge of Financial Technology and Financial Software.

LIC IPO : how to get assured allottment

 

How to get assured allotment in LIC IPO

 Are you always interested in IPO ??

Here is your chance to  sure get an assured allotment in upcoming largest IPO of LIC

 LIC IPO coming soon

 Life Insurance Corporation of India (LIC) is government owned and is the largest life insurance company with an IPO on the cards where the government is planning to offload a portion of its shares to the public. As per the proposed plan by the government, up to 10 per cent of the LIC IPO issue size would be reserved for its policyholders. (Max Rs. 2 Lakh per PAN) . Last week, the life insurer asked its policyholders to update their PAN, so that they can participate in the proposed public offer. To be able to be eligible to apply for the shares as an existing policyholder, it is important to make sure certain details are updated by the policyholder on the LIC portal.

Prerequisites

The prerequisites to be eligible for IPO under the policyholder category  is as under:

·       PAN details of the policyholder should be updated on LIC portal.

 

·     Policyholder should have a demat account. With any broking house. If you do not have demat a/c contact us to open one.

To link PAN, the policy holder needs to visit the LIC website at www.licindia.com and click on the button “Online PAN registration”. The policyholder needs to key in the date of birth, email ID PAN, name as per PAN, mobile number and policy number. If there are multiple policies, all policy numbers can be added. A mobile verification OTP is sent to the registered mobile number of the policyholder. Once the authentication is completed, one can check the status of updation by clicking on the button “Online Checking Policy PAN Status” on the LIC website.

Steps to link PAN with LIC Policy

 

STEP 01

Go to the official LIC website https://licindia.in

STEP 02

Tap on to ‘Online PAN Registration’ button.

STEP 03

Provide Email-ID, PAN, mobile number & LIC policy number

 

STEP 04

Request & Enter OTP to succesfully link LIC policy

Conclusion

·                                 You can also apply for LIC IPO under retail category even if you are not LIC policyholders .

 ·      If you are policy holder , You can take the help of your  LIC agent to make sure all updates have been carried out.

@Ajit Kumar Singh

All About RBI's (Reserve Bank of India) Direct Retail Scheme

 

All About   RBI's (Reserve Bank of India)  Direct Retail Scheme

 

Until now the government security ( g-sec)  market was dominated by institutional investors such as banks, mutual fund houses, and insurance companies. These entities trade in lot sizes of Rs 5 crore or more. In order to make access to ordinary retail investors, recently govt launched   The RBI Retail Direct Scheme .

 The RBI Retail Direct Scheme is a facility or  platform for small individual investors to invest (buy /sell) in the Govt.security scheme directly  that facilitates retail (individual)  investors to purchase and sell government securities (G-sec) on the primary and secondary markets over the internet. It provides ordinary investors with a new way to invest directly in securities issued by the Central  and state governments

These small investors can now invest in G-Secs by creating a gilt security account with the RBI,. The new account will be known as the Retail Direct Gilt (RDG) Account.

Before we try to know full details about the Scheme, we should first know what is Govt. Securities and is it beneficial for you to buy it.

What is G-Sec. (Govt Securities)

When Govt expenditure exceeds its revenues, the government issues securities, popularly known as G-secs or government bonds to raise funds, which is utilised to cover the deficit.

These are debt instruments issued by the Central or State government to borrow money from market and usually carry Fixed Interest Rate that you get on maturity.

 

These are of two types  , short or Long term

Short terms :

which mature in 91 days, 182 days, or 364 days, and

Long Terms

which mature anywhere between 5 years and 40 years.

 

Examples of Govt Securities are :

 

Treasury Bill (T-Bill) , Bonds etc.

 

Treasury Bills are short terms while bonds are of long terms

Should you buy :

Most people while taking investment decision would think about equities (co. share) , Bank fixed deposits, mutual funds, real estate (land, house, flat)  or gold Very few consider investing in government securities or bonds. However, investing in government bonds can be an effective way of diversifying your investments and reducing risk.

the government pays a fixed interest rate on the bonds and by remaining invested in government bonds until maturity, you can derive maximum yield. One can also consider investing in government bonds to diversify his/her portfolio as these are largely stable and perform well when other asset classes are under pressure.

Interest rates in different Govt Securities are usually 6 to 12%  depending on tenures.

Returns on these bonds are not affected by ups and downs in capital market , however there are some credit risk in investment , if Govt reduces interest rate then some risk is there in pre mature withdrawal , if you remain invested till maturity , there is very less chance of risk

 Such bonds are guaranteed by Govt so it is super secure.

 Disvantages

Interest rate is usually low , between 6 to 12% .  Higher Interest rate is only when tenure of Govt Securities is high like 10 to 20 years.

And such low rate of interest usually does not justify inflation ( loss in purchasing power of Money

For example a 8% 7 years govt security/bond of Rs. 10000 will Guaranteed return you Rs. 10800  after 7 years . Consider Value of Rs. 10800 after 7 years???

So the investment kin Govt Securities  is good for Conservative investors who do want to take any risk at all

Taxation Effect :

Return is Taxable when received unless mentioned as Tax free. So post Tax return will be less than 8%

What should you do ;

If you want to diversify your portfolio with no risk investment , you can invest in Govt Securities

There are Two ways to Invest in Govt Securities :

 

1.     Via Mutual Fund ,

 

 Specially named as Govt Securities Fund or Guilt Fund, Such as  Aditya Birla sunlife Govt Security Fund, DSP G-sec Fund, ICICI Govt Security Fund, SBI Bond funds etc. These mutual funds primary invest in Govt Securities and bonds and are less risky , less volatile (and consequently gives less returns)

 

2. Via  RBI Retail Direct Scheme .

 

        If you do not want to invest in Govt Securities through Mutual Funds , You can now Directly buy from RBI’s web site. RBI has recently launched  a scheme called Retail Direct scheme for Individual Investors to buy Govt Security. For this you have to undergo following process :

 

1. Visit RBI web site rbiretaildirect.org.in/
   
   
2.  Register yourself & open an account . The new account will be known as the Retail Direct Gilt (RDG) Account.
   
   
3. After opening your account there you can buy or sell  Govt securities and Bonds
4. Detail process is given on that site rbiretaildirect.org.in/

 

Benefit of Direct Investment

 

There is no Fee attached , No expenses are charged by RBI . Rates may be Low then secondary market like Mutual Fund.

 

Conclusion :

 If you do not want hassles of  investing through RBI Retail Direct Scheme , you can invest through Guilt Funds – which invest primary in Govt Securities only.

 

Some Popular Guilt Funds are :

 

SBI Guilt Funds , ICICI Guilt Funds, Aditya Birla Govt Security Funds , DSP Guilt funds etc.

All these guilt funds have given around 8 to 9% returns consistently and not much effected by Volatility of Market .