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Saturday 31 December 2016

PPF Interest Rate History

PPF Interest Rate History

This history of PPF interest rate in last 30 years has been as follows:
  • 1986 to Jan-2000 – 12.0%
  • Jan-2000 to Feb-2001 – 11.0%
  • Mar-2001 to Feb-2002 – 9.5%
  • Mar-2002 to Feb-2003 – 9.0%
  • Mar-2003 to Nov-2011 – 8.0%
  • Dec-2011 to Mar-2012 – 8.6%
  • 2012-13 – 8.8%
  • 2013-14 – 8.7%
  • 2014-15 – 8.7%
  • 2015-16 – 8.7%
  • 2016-17 – 8.1% (till now)

Monday 19 December 2016

EPF Interest Rate from 1952 to 2016

Financial Year Interest Rate (%) Financial Year Interest Rate (%)
1952-53 3.00% 1985-86 10.15%
1953-54 3.00% 1986-87 11%
1954-55 3.00% 1987-88 11.50%
1955-56 3.50% 1988-89 11.80%
1956-57 3.50% 1989-90 12%
1957-58 3.75% 1990-91 12%
1958-59 3.75% 1991-92 12%
1959-60 3.75% 1992-93 12%
1960-61 3.75% 1993-94 12%
1961-62 3.75% 1994-95 12%
1962-63 3.75% 1995-96 12%
1963-64 4.00% 1996-97 12%
1964-65 4.25% 1997-98 12%
1965-66 4.50% 1998-99 12%
1966-67 4.75% 1999-2000 12%
1967-68 5.00% 2000-01 11%
1968-69 5.25% 2001-02 9.50%
1969-70 5.50% 2002-03 9.50%
1970-71 5.70% 2003-04 9.50%
1971-72 5.80% 2004-05 9.50%
1972-73 6.00% 2005-06 8.50%
1973-74 6.00% 2006-07 8.50%
1974-75 6.50% 2007-08 8.50%
1975-76 7.00% 2008-09 8.50%
1976-77 7.50% 2009-10 8.50%
1977-78 8.00% 2010-11 9.50%
1978-79 8.25%+0.5 % bonus 2011-12 8.25%
1979-80 8.25% 2012-13 8.50%
1981-82 8.50% 2013-2014 8.75%
1982-83 8.75% 2014-2015 8.75%
1983-84 9.15% 2015-16  8.8%
1984-85 9.90% 2016-17  8.65%

Saturday 17 December 2016

Assets and Liability

Assets are the items with economic value that are owned by an individual or entity, with the expectation that these will generate future benefit.Asset may be tangible physical items or intangible items with no physical form. Liabilities are obligation that binds an individual or entity to transfer economic benefits including money, goods or services to another individual or entity over time.Assets provide a future economic benefit, while liabilities present a future obligation.

 I have come across the a video on youtube where
Robert Kiosaki is explaining about Assets and Liabilities. Please see the video and start shaping up your financial life.


Sunday 11 December 2016

Insurance : Introduction

Insurance is a means of risk management to hedge against any uncertain loss. Insurance company protects the insured from a loss in exchange for monetary compensation known as the premium. The loss may or may not be financial.

The insured and insurer comes under a contract, called the insurance policy, which details the terms and conditions under which the insured will be financially compensated. For this Insurance company charges an amount of money to the insured for the coverage set forth in the insurance policy is called the premium. There different types of insurance policy depending on the risk they mitigate. These include life, health, motor, travel, home, commercial and business insurance.

Insurance is not a modern day concept. The Babylonians developed a system. According to Code of Hammurabi, Mediterranean sailing merchants were used this system for risk mitigation. Traders were encouraged to assume the risks of the caravan trade through loans that were repaid (with interest) only after the goods had arrived safely. In consideration for bearing this risk, the lender calculated interest on the loan at an exceptionally high rate.

In modern days insurance is one of the most effective tools of social security across the globe. Here people from different background come in group and contribute a small amount as premium to create a fund. This fund is used to hedge against any uncertain loss incurred to a person in the group. Insurance had become accepted practice. Farmers wanted crop insurance. Travelers wanted travel insurance.  Everybody turned to insurers to buy peace of mind.

Most common types of insurance:
  • Life Insurance - Pays out a specified figure to the insured or specified beneficiaries on a specific event such as death of the insured.
  • Personal Accident Insurance - This will compensate you if at any single time an external violent event causes you disability, injury or death.
  • Medical and Health Insurance - to insure you from cost of medication, hospitalization, surgery and loss of pay due to medical condition.
  • Vehicle Insurance - this insurance covers it against accident or theft.
  • Home Insurance - to insure your home against loss or damage as a result of fire, electricity fault, plumping malfunction, flood, etc.
  • Travel Insurance – to insure any loss, damage, injury, sickness or inconvenience that comes up as a result. It may cover personal accidents, hijackings, travel delays and more.
  • Crop Insurance -the cover protects you from losses associated with crop failure as a result of bad weather, infection or infestation.
  • Mortgage Insurance –  protects a mortgage lender or title holder in the event that the borrower defaults on payments, dies, or is otherwise unable to meet the contractual obligations of the mortgage..

Saturday 10 December 2016

0% interest free EMI scheme: trap or opportunity

First I want to say that there is No free lunch. So why there is Zero down payment and 0% interest free EMI scheme in the market. Let explain how this works. In this model there are 3 segments of people involved,

1. CUSTOMER: Customer gets to buy a new item for absolutely zero down-payment and a chance to pay the amount in easy installments without any interest being paid.

2. SELLER: Seller gets to sell more goods due to these kind of schemes as the customer base is also increased. These schemes enable a man to buy anything without any money because he has to pay in installments.

3. FINANCE COMPANY: Financing these kind of customers. But it is called 0% interest free scheme means no return on the loan given to the customer. Then why they are doing so… for charity? Answer is NO.

Because no zero percent scheme is actually zero percent.  The amount of interest that you would have paid is taken from the seller in this case. Although it's not as that much but some portion of it (This is a hidden information that most sellers don't tell).

Sellers never agree to any kind of bargain while selling goods on EMI right? Because they have to pay to the financer to give you enough capital to buy something from them. So sellers pay that out of their profits of course.

If you buy anything cash and not over EMI (interest free), then it will an opportunity for you to bargain and some discount on the product. You will easily get 500 to 1000 rupees off because seller need not to pay anything to the FINANCE COMPANY sitting there to offer 0% interest free loan.

How I use my Credit Card and make money….

In our society there is a myth that credit card makes us to spend beyond our means and lead you to a debt trap. But one thing I like to say here that it is not a credit card's issue it is your temptation which lead you in debt trap if we go beyond your limit to test card limit. Card company or bank never say that go and spend which you can’t pay.

Now let me explain how I use my credit card. I have a credit card with money back feature having billing date 4th of each month having due date 30th of the month. I try to use my credit card as much as possible though out the month for all my purchase and utility bills. I never spend without having plan for bill payment in place.

I have register auto pay for bill payment with my bank account to minimize the risk to non payment of credit card bill . Now suppose I have a bill of 20000rs for a month. So I can earn 25 days interest on my bill amount with ROI 4% as per my saving bank account. And the money back point are the bonus. I used to park my bill amount in some liquid fund which result more risk free return. 

I like to just mention that day before yesterday I have redeemed my cash back point which bring my credit card bill for this month to ZERO.

Be a controlled and informed user of credit card.

Real estate investments

 In India, our old people have only two options for investment. These are Real State (house or Plot) and Gold. We will talk about gold some ...