My Money – MoneyXTension: Financial Freedom

Do You Know? Crypto Bitcoin Moved to Indian Markets

“If you don’t believe it or don’t get it, I don’t have the time to try to convince you, sorry.” – Satoshi Nakamoto

Cryptocurrency or Bitcoin may be a atypical phraseology for an ordinary Indian citizen but you will be surprised to know that all the authorized exchanges in INDIA have recorded an extraordinary growth in the Cryptocurrency business since March 2020. Any conjecture amongst the investors or the Bankers has been removed by the Supreme court order dated 4th, March 2020, setting aside the circular issued by RBI in April 2018. Though no formal regulatory has been issued by the RBI for explicating the matter, the Banks/Customers/Exchanges have already started conducting the business.

There are pros and cons attributed to this unregulated currency but statements coming from the sources like Bill Gates creates confidence:

“Bitcoin is a technological tour de force.”– Bill Gates.
The founder of Microsoft has a great passion for this currency and already holds a considerable quantity of Bitcoins: https://tradingbeasts.com/featured/cryptocurrency-quotes/
There has been an unprecedented increase in business over the last few months in India. The previous eight months starting from March 2020 till date have witnessed the growth of cryptocurrency business in India by more than 600%. Reportedly, the Indian cryptocurrency business with a monthly turnover of more than 23 million dollars stands at number 2 in Asia and number 6 in the world. Mind-blowing?

Launched in 2009 by an unknown person using the alias Santoshi Nakamato, Bitcoin is the new paperless currency that doesn’t have control by the Govts or Banks. It is a digital currency and you can not touch it with your hand. You can buy anything from hotel booking to furniture through this currency.

ATM’s and other dispensing centers facilitate convenient use of cryptocurrency by the customers in many countries. You can use your smart phone or computer to send or receive money without involvement of any Bank. The technology has brought a revolution in the Financial markets with more and more institutions coming out to provide commercial services to their customers.

With a limited possibility of mining maximum 21 million of Bitcoins, the persistent demand of Bitcoin results in high volatility in the market. The market data suggests 18.75 million Bitcoins are already in circulation as of today. Big institutional investors have been amassing this coin continuously as the price is gradually moving beyond the reach of retail investors. The price of one Bitcoin has scrambled up from 8000$ to 27000$ within 12 months. That makes one Bitcoin equal to 27000×78= Rs.2079000 (Twenty Lac and seventy-nine thousand). Isn’t it a huge amount for one unit of Bitcoin? However, you can buy a small fraction of Bitcoin also.

Unlike, the currency notes and coins minted and printed by the Governments in the closely guarded printed press, these cryptocurrency coins can be mined by the miners from the convenience of their bed rooms. Highly sophisticated computers are used by the experts through a complicated “Blockchain” process popularly known as Mining. This being a technical and labour intensive exercise requires immense concentration. Anybody sitting at home can mine this currency and earn a value of 6.25 BTC for creating one block. By any standards, Its a huge compensation!!

The cryptocurrency markets are in operation 24x7x365 as the blockchain technology has made this market very competitive now. There are more than 6000 coins trading in the markets through hundreds of authorized cryptocurrency exchanges. Every coin has its distinct value and utility. Some of the most popular and traded coins in the markets are indicated below:

Bitcoin: BTC:
Etherium: ETH
Bitcoin Cash: BCH
Ripple: XRP
Litecoin: LTC
Binance: BNB
Cardano: ADA
Polkadot: DOT
Bitcoin SV: BSV
Steller: XLM

There are still many countries that have not regulated this currency for valid reasons and genuine apprehensions. Being a parallel economy without any control of the Central Bank or the Governments, this may land in the hands of terrorists or antinational activists. They have their own perceptions of losing the entire control over the currency and its regulatory authority. Most of the countries don’t want this to happen in their own interests.

From India’s perspective, strange statistics forewarn about the pattern of investors investing or trading in cryptocurrencies. More than 50% of investors in the crypto currency markets in India have an annual income of less than 10 lac.

This being a very risky volatile market with turbulences occurring at regular intervals, you must ensure to be circumspect and discreet in handling the transactions. Any impulsive act can make your money vanish in seconds. You can not approach your Bank or RBI for complaining about any pecuniary loss perpetrated by the swindlers through fishing and other fraudulant modus operandi.

Friends, Stay Safe Stay Connected but keep reading

Disclaimer: The material and information contained on this website/Blog is for general purposes only. You should not rely upon the material or information on the website as a basis for making any business, legal or any other decisions. Any reliance you place on such material is strictly at your own risk and responsibility

(P2P):Peer-to-Peer Lending,Debt Crowdfunding,capital, Easy Loans,Money,Borrower

Friends, We have seen technology doing wonders in almost every facet of modern-day life as we are getting accustomed to everything available at our fingertips. Innovative ideas have been transformed into applications to help the ultimate customer in every domain. So is the case with Banking and Finance as the Fintech companies have taken over the charge to provide the services which were beyond comprehension only a few years ago.

Banks would express reluctance entertaining request from an individual whose credit score is not consistant with the prescribed norms and small businesses needing funds for their immediate working capital requirements may found Banks too demanding taking a comparatively long time for processing of loan proposals.This made such borrowers shifting their alliance to local money lenders who would pay money immediately by charging exorbitant interest rates. The idea of removing intermediaries in providing immediate funds to such borrowers, particularly startups made the concept P2P platform a possibility.

The concept of P2P Lending emerged in the UK in 2005, when ZOPA, the first company started providing services but the first real fintech platform came into being in 2010 as “Funding Circle” started offering small loans to small businesses from the investors via its platform. P2P is a convenient platform that facilitates transactions between a lender and a borrower by charging a nominal fee. All intermediaries removed in one shot!!

Furthermore, Fixed income group customers like pensioners tend to invest in Mutual Funds or Bank FDR’s for risk-free returns. Average returns on these investments are always in single digit not even matching the inflation rate of 7% in India. There is always an inclination to search for high yield avenues by these fixed income investors. P2P Platforms made it possible for them to earn returns of more than 12%. Although delinquencies and NPA’s keep rising section 138 has checked the menace of check bouncing and one can diversify the portfolio by investing a part of funds under this segment too.

Important features and check points for Investors (Lenders) and Borrowers to know about P2P lending:

Lender(Investor)	Borrower
Identify P2P company with tolerable NPA levels and good reviews	Identify P2P company with good reviews and known for quick action
Register with the P2P lending company	Register with the P2P lending company
Search Borrowers and identify borrower you want to invest	Send request for the Loan amount and negotiate for Interest rates
Receive a copy of the Loan documents for your records	Execute the Loan documents
Diarise the date of Installments at your end and follow up	Receive loan disbursement in your account
You can lend a maximum Rs.50000/- per borrower	You can borrow a maximum loan of Rs.10 lakh from P2P Platforms and Rs.50000/- from individual lender
You can Fund a maximum Rs.10 Lakh on all the P2P Platforms	Avoid any default on your loan account
Submit CA certificate for 50 Lakh net worth if interested in lending more than Rs. 10 lakh	Your loan account is being reported to CIBIL You stand a chance to improve your credit (CIBIL)score by paying regularly
The maximum repayment period is 36 months. However, no pre-payment charges if paid after three months	The maximum repayment period is 36 months. However, no pre-payment charges if paid after three months

Check points P2P Lending

Like other regulators across the world, RBI brought this category of debt crowdfunding under the ambit of its governance in 2016. Any P2P company operating in India needs to adhere to the prescribed guidelines strictly:

P2P company needs to be a registered NBFC with a minimum paid-up capital of Rs.2 crores.
P2P Company: will only facilitate transactions between the lender and borrower without assuming the role of a Banker.
Will not seek any deposits from the investors
Will not guarantee any returns to its customers
The total exposure of any lender to the individual borrower will not exceed Rs.50000/- on all the platforms
Any lender will lend only up to Rs.10 lakhs and a CA certificate about his net worth is required if he wants to lend more than Rs.10 lakh up to Rs,50 lakh
Any borrower can borrow the maximum amount of 10 lakh only from all the platforms
The maximum tenure of the loan will be 36 months only
Will display on its website the NPA figures in the existing cases
Will prepare risk profile of each borrower and investor
Will decide the interest rate depending on the risk profiles of borrowers
Will execute loan documents and help in recovery
Will have a panel of lawyers who will start proceedings against the defaulter against section 138 for bouncing of installments
Will conduct due diligence on borrowers and lenders

Friends, P2P platforms are providing very quick loans to small business or individuals without any collateral security. The cost could be more but it is worth meeting your emergent fund requirements. Hold on!! This is one way of improving your credit score also. You stand a chance to improve your credit score by proving yourself a good borrower by paying the installments regularly.

Stay safe and keep reading

RETIRING SOON or Restarting Your Re-tyred Life?

Hey!! Feeling young at 60? I know you are surprised at your retirement transpiring too early but in reality, it’s time for your exit paving the way for others to take charge now!! Just relax and feel the pulse of my heart reverberating wishes on your well-deserved retirement. Some of you must be feeling more relaxed and secured having accomplished all your life goals in a phased manner. Intrusive thoughts and nervousness must be creeping in the minds of a few others at the prospects of their retirement.

This post is dedicated to you guys who could not plan their retirement during the early part of life for reasons beyond comprehension. Hope the subject will be absorbing for you to comprehend and follow to spruce up your re-tyred life.

Globally, all Financial Consultants recommend starting the planning of personal finances at the age of 25 to 30 years. Ideally, this is the age group when you should have started saving and planning for all your financial goals. However, in our country where an average Indian starts planning for retirement only after crossing the age of 50, you might be late but the game is not over yet. Maybe the retirement planning escaped your attention due to other priorities, social obligations or, living with your current lifestyle? You can’t retrieve those lost moments but certainly, you can spruce up your future with some purpose even now.

Hopefully, your perquisites like, PF/Gratuity/Leave Encashment and some other entitlements have already been processed by your employer. Your savings and receivable funds put together may heap up into a healthy corpus. Please see that all your debts are cleared before starting planning further. Don’t carry forward any such liability with you to avoid any untoward situation.

Further, the value of your money subject to inflation is likely to depreciate every year. The average inflation rate in India hovers around 6.5%, you need to earn interest or generate income on your money at least a net of 7% to neutralise the effect of this invisible enemy. You must ensure that this money is allocated to diverse securities/investments so that they continue producing passive income for you. Restrain yourself from spending lavishly on avoidable expenses.

By natural instinct, you are going to feel financially insecure after retirement. You may be tempted to keep maximum balances in your bank savings account as an emergency fund. Interest earning on such deposits is being 3% only, you may not be able to grow your funds as per your needs. There is every possibility of any friends/relative suddenly seeking financial help which you may not resist. In both cases, your risk and potential loss of money can’t be ruled out.

I will discuss the allocation of the money in the latter part of this post. Let’s find out the opportunities available for you to keep busy and earning portfolio income to supplement the limited resources.

The possibility of getting hired after retirement has always been remote but the prevailing pandemic conditions have made the task more difficult. Social distancing norms as prescribed by the administration worldwide are more inconvenient and painful for the senior citizens. The virus is more threatening for elderly people aged 60 years and above due to their weakening immunity. The chances of getting a good break look bleak under the given circumstances.

Working from Home has come as a blessing in disguise for many companies and individuals. Wherever feasible, the companies have allowed their workforce to work from Home making it a win-win situation for all. Why don’t you try the undernoted resources for keeping yourself busy and earning a bit while sitting safely at home?

Freelancer Jobs: Friends, some of you must have acquired expertise in Financial Markets, IT and Software, Computing, Data entry, Tuition work, Legal, content writing skills, or any other specialization working for more than 30 years. You can explore opportunities for getting freelance jobs sitting at your home.

There are hundreds of websites offering you freelance jobs. Some of these are, Upwork, Freelancer, Fiverr, Toptal, and Guru. You can register with these companies and start earning right away. No formal education is required as the only pre-requisite qualification is your talent and expertise.

The payments are secured and guaranteed as these websites take a cut out of your income. Earning may range from 5$ to 100$ per hour depending upon your proficiency, efficiency, and competence.

Stock Market: If you have prior experience of conducting the business of share trading in the stock market or you have enough patience and perseverance, you can also look for trading in the stock markets. This will not only keep you busy for a few hours daily but also help in generating a passive income. Intraday trading is beyond your scope and should not be undertaken. This product has been devised for proficient investors with more risk appetite and possessing professional skills.

However, you can identify a few stocks by using due diligence/normal prudence and go for positional trading. Positional trading allows leverage of a few days and you can decide your trade accordingly. This is a high yield lucrative business space if you can invest wisely after thorough research. Stock markets are not open on Saturdays and Sundays that allows you to trade for 20 days in a month.

Coming back to the management of your funds and life after retirement, you need to sit down and jot down the income and expenditure details accruing every month. There is no need to create an emergency fund as most of the Bank FDR’s or other investments can be encashed prematurely these days. You need only two months of living expenses and Rs.100,000/- for any incidental expenditure required to be incurred during the odd hours.

Since life expectancy has increased by more than 20 years, you need to know that health care is going to be the biggest issue now. Most employers have a group insurance scheme in force for their employees. You need to confirm whether this will continue after retirement or not. Health insurance is not only costly after 60 years of age but comes with lots of strings attached to it.

In case the existing insurance cover provided by the employer can’t be taken forward, you must identify a good health policy for you under family floater. Go for the plan which has positive reviews from the customers about the hassle-free settlement of claim cases backed up with the best customer service. No frivolous condition laid down by the issuing company be accepted in the Policy lest a genuine claim is declined in future.

Let me list a road map for you to manage your money with an eye on preserving your capital by generating enough passive income for the living expenses regularly:

SCSS(Senior Citizens Saving Scheme): With a sovereign guarantee, this scheme looks attractive for those retiring from active service. The Senior citizen’s savings scheme is open only to senior citizens aged 60 years and above. You need to open this account within one month of your retirement. The upper limit of deposit in this scheme per account is 15 lac but you can open more than one account also. Initially, any deposit made under this scheme matures after five years However, it can be renewed further for three years. The interest rate is decided every quarter but once invested, you get a fixed return for five years. The present rate of interest is 8.6% per annum. The interest amount is taxable under the Income Tax Act. However, You can get premature payment also.
Mutual Funds: Ordinarily Mutual Funds in India provide 10 to 13% returns on various MF schemes. You can consider this option by investing a portion of your funds in Mutuals Fund schemes where fund allocation is 100% in equity. This is risky but the most rewarding portfolio for investments on longer horizons. There is no lock-in period and you can exit as and when you need the funds. Just a few clicks on your computer and the proceeds get credited to your Bank account within a week’s time. There is no capital gain tax on MF’s investing in equity only. However, the maximum permissible amount of capital gain is Rs.100,000 only
Bank FDR: Though interest rates have come down considerably, the Bank FD still remains a choice for many as you get a special interest for senior citizens also. These instruments can be encashed online at any time. Gone are the days when you had to visit the Bank branch for canceling and encashment of your FD prematurely. The payment gets credited to your Bank account immediately. Except for Tax saving FDR which has a lock-in period, all other FD’s are easily payable before maturity.
POMIS(Post Office Monthly Income Scheme): Maximum of three joint account holders with 4.5 lac each for individuals is permissible in this scheme. The maximum limit for minor accounts is Rs. 3 Lakh. The minimum amount which can be invested is Rs. 1,500 for any individual. Interest is revised regularly on a quarterly basis. However, presently the post office is paying an interest rate of 7.8% to their customers. Interest is fully taxable but no TDS is deducted at source. Interest is credited to your post office savings account every month.
Tax-Free Bonds: Another safe and better yielding option for retired people is an investment in Tax-Free Bonds issued by the Govt. of India. These are long term securities offering interest rates as high as 8% and no tax is deductible at source as interest earnings are completely tax-free. Maturity ranges from 10 to 20 years as such it is advisable for those investors who can spare money for longer periods. You can buy these bonds through your Demat account or in physical form as per your convenience. These are risk-free investments due to sovereign guarantee,

Besides, all retiring people will appreciate that Income Tax liabilities are going to remain the same except for a small exemption for senior citizens in the country. Each and every penny is going to be accounted for payment of income tax. Although, there is no penalty for late payment of income tax by senior citizens in India you must ensure paying advance income tax out of your pension or other resources. Filing of ITR is mandatory for all senior citizens and must be taken care of for timely submission every year.

Happy reading friends! Stay Safe Stay Connected

Income Protection or Permanent Disability Insurance

Normally every one of us is obligated to obtain a number of insurance covers to safeguard against the uncertainties and financial losses in our life. As a matter of fact, every activity involving financial transactions is covered against one risk or the other. However, I will delve into the intricacies of Insurance covers that most of the employees tend to undertake for protection against personal risks.

Term Insurance Plan against the risk of Life attracts comparatively low premium and the sum assured is paid to the legal heirs/dependents only after passing away of the assured. We keep paying premium year after year and in case of death of the insured/earning member, the Insurance Company pays a fixed pre- agreed/insured amount to the surviving family. LIC/HDFC Life/SBI Life/ICICI/Kotak Insurance/ and a host of other companies issue these policies with a different set of conditions. Insurance premium keeps rising as you grow in age. It’s better to start early.

Health/Medical Insurance: Another insurance plan we prefer these days is Medical Insurance which safeguards against the risk of costly medicines/hospitalization for treatment of unforeseen medical conditions. The cover is available as long as we are paying the insurance premium which keeps increasing every year due to escalation in medical costs. HDFC Ergo, Bajaj Alliance, Star Health, Oriental Insurance, National Insurance, SBI General, and a few others are issuing these policies for treatment in India only. Insurance premium depends upon your age, existing disease, habits, and family history

In this fast-moving world, there is every possibility of someone contracting critical disease/meet a serious accident rendering him permanently disabled unexpectedly. Health Insurance will cover the expenses incurred during the treatment to some extent only and Term Insurance comes into effect only after the death of the insured.

Permanently Disabled/Income Protection Plan:: What happens if you are unable to work indefinitely due to prolonged illness or getting permanently disabled due to an accident.

A sudden income reduction could have dramatic negative repercussions, leaving you wondering where to turn to keep the lights on or to stay current with your payment liabilities. For most families, it takes only about 30 days for the ramifications of a disabling illness or injury to start causing problems. By this point, you will have spent whatever money you had in hand, and maybe facing the prospect of dipping into your savings to meet your financial obligations

What happens if there are no emergency funds to take care of day-to-day expenses including living expenses, Children’s education, and other recurring expenses of the dependent family. We understand that the employers support their staff for only a few months if they’re sick and absent from work. What happens after six months?

The question arises as to how the family will survive without any regular income to pay off their bills for living expenses. Either the family will borrow from relatives/other resources or the surviving member will look for an alternate source of income. Whatever be the case, the family will be in a miserable condition due to a financial crisis.

Nothing to worry about!

These days there is a plan which protects your income also. It’s generally known as an Income protection plan/Permanently Disabled Plan, taking care of all your expenses when you are unable to work.

You can take an exclusive Long Term Disability plan or add a rider to your existing Life Insurance Policy. Long Term Disability Insurance can protect your financial stability and your peace of mind. As evident from its nomenclature, this insurance plan is meant to take care of the family if you are rendered helpless due to any circumstances. In case of any eventuality, the insurance company provides a lump-sum payment or periodical monetary benefits to the insured as per the terms of the policy. This claim amount facilitates a respectable living by the family even when you are not in a position to work.

There are two types of Permanent Disabilty Insurance Plan:

Short Term: Provides benefits up to 2 years
Long Term: Usually covers critical illnesses and injuries which might force you to discontinue your work. Covers a wide range of mental illnesses, cancer, cardiovascular ailments, tissue rupture and similar diseases. Benefits may be for the whole life

Whereas, the minimum age remains 18 years, the maximum age has been fixed preferrably at 60 years but some companies are allowing it upto 70 years too. Insurance companies are strict on the pre-existing conditions and insist for the relevant documents from the competent board of the Hospital before admitting any claims. Normally, the initial waiting period for entertaining any claim is 30 days. Many Insurance companies in India are issuing these policies to their customers. Some of them are shown herein below:

Max Bupa
HDFC Life
ICICI Lombard
PNB MetLife Insurance
Kotak Life
SBI Life

Friends, some of you must be wondering about the relevance of paying such a hefty premium from your income for nothing. Interestingly, there are insurance linked wealth creation schemes in this most competitive market these days. Every salaried employee is lured to invest in these schemes thinking that he is covering his insurance risk and growth opportunities as well. He thinks twice before spending money on purely Insurance Plans which are apparently not going to generate any income for him.

Let’s consider the three stages for elaborating the significance of pure Insurance policy:

Term Insurance Plan: Mr. David aged 41 years has a wife and two children in the family, depending on his monthly salary. Whereas, the monthly living expenses are Rs.60000/-.and he has Rs.300000/- in his emergency fund. Suddenly while returning from his duty, he meets an accident and dies on the spot. What if he has not taken Term Insurance? The family will be on the road after a few months. In case he was wise enough to have already covered himself against this risk by paying only a few thousands, his family would live gracefully as they will get enough money to see through the tough times
Health/Medical Insurance Plan: Coming on the same example, if Mr. David had survived with minor injuries, requiring a few days hospitalization or his family member fell sick and had to be hospitalized? If there was a medical insurance cover available for him and the family, the entire expenditure incurred on their hospitalization would have been covered by the Insurance Company. He doesn’t need to worry but you can imagine the plight of the family otherwise if they have not taken Health Insurance cover.
Income Protection Plan: Now coming to the example again, Mr. David is run over by a speeding truck while returning from his office. He loses both his legs and one eye. Due to his disability, he is unable to perform his duties and loses his job. If he has Term Plan and Health Plan only, then he will not get anything as compensation for his income. Health insurance will cover him till he is out of hospital and post hopitalization treatment for another 180 days. However, if he is covered under yhe Income Protection plan also, he is going to get a lump sum or periodical payments that he can use for living expenses. However, you can imagine the plight of the family otherwise not covered.
The general thumb rule advises not to take insurance worth more than 20 to 30 times your current income, depending on your age and the carrier. You can identify the needs of your family and accordingly find out the quantum of insurance cover you must take to cover all the above mentioned risks.

Hopefully, I am able to clarify the doubts in the minds of my dear friends about the relevance of obtaining pure insurance cover and more importantly the Income Protection or PermanentDisability cover to face the uncertainities in life.

Mutual Funds for All

Having explained the significance of Mutual Funds in creation of wealth by securing your money in the last post, we will see how your money grows constantly by taking care of “timing the market” risk. Though its not possible to avoid 100% risk in business and no investor or professional can claim to time or tame the market perfectly.

Stack of coins and growth sprout plant with hand watering as business finance or grow investment concept.

However there are ways to minimise the risks by following certain well researched and proven practices. Yes:Mutual Funds cover the risk broadly by spreading their exposure in diverse activities of fund management but investment in mutual funds through SIP almost nullifes the “timing of market” risk as small investments averages the price range which keep fluctuating through the entire time horizon of your investments.

A Systematic Investment Plan (SIP) is a vehicle offered by Mutual Funds to help investors invest regularly in a disciplined manner, through small and periodic installments. The funds with portfolio of 100% equity stocks look risk oriented product in the basket of all the AMC’s but these funds have outsmarted index in the past by getting return of as high as 16%.

You need to work out your risk appetite and periodical financial goals fixed for achieving a relaxed retirement life. If you have started early and the first financial goal is expected any time after ten years then putting 15 to 20% of your income will create an ideal platform by investing into equity funds. The balance could be allocated to a low earning safer mode like Debt Funds. The number of Investors under SIP mode are increasing globally for the reason:

REGULAR SMALL SAVINGS
TIMING OF MARKET RISK COVERAGE
HIGHER RETURNS SOMETIMES BEATING THE INDEX
DUE TO AUTOMATED PAYMENT OF MONTHLY THERE IS VIRTUALLY NO CHANCE OF ANY PAYMENT PENALTY DUE TO ANY LATE INSTALLMENT

The AUM(Assets under management) has grown exponentiolly as the figures suggest: ₹ 6.28 trillion as on 30th September, 2009 to ₹ 24.6 trillion as on 30th September, 2019, about 4 fold increase in a span of 10 years and the total number of investors have grown to more than 2900000 in number. Like any other business this portfolio has also tasted rough weather due to volatality in the market which saw outflow of 1.6 lakh crores against inflow of 66990 cr only in 2019. The downside came as income and debt oriented schemes including close-ended and interval schemes saw net outflows of Rs 1.74 lakh crore in June as against net inflows of Rs 67,930 crore in the previous month.

AMFI regulates the funds in India and its very easy to start investing through SIP. You need to submit your KYC which get verified online as the process has been made very simple through AADHAR card also.

POA(Proof of residence)
Identity Proof (Voter Card, Passport,Bank Statement)
PAN Card
Aadhar Card

Once you are KYC compliant, you can start investing directly. DEMAT account is not manadatory as the customer can invest directly with the Funds distributors/Mutual Fund Companies, therby saving on the fees. You can provide mandate for automated instalment from your Bank and the instalment will start on a fixed date as agreed to by you at the time of starting the investment. You can start on 1st of every month or from the date of your salary or any other day which is convenient for you.

The redemption of mutual funds can be made any time in part or full and the proceeds get credited into your bank account within three business days. Normally the bank account for getting redemption amount remains the same from which the investments have been made. There is a lock in period for the funds enjoying tax deductions from their income like ELSS schemes, where the whole amount is invested in the equity market by the fund managers. May be this is one way to encourage the stock markets to prosper. Whereas the indian residents can start investments as and when they like but the NRI need to follow certain specific guidelines to comply before starting SIP. The undernoted funds accept investments from the NRIs irrespective of the countries they are living in.

Birla Sun Life Mutual Fund
SBI Mutual Fund
UTI Mutual Fund
ICICI Prudential Mutual Fund
DHFL Pramerica Mutual Fund
L&T Mutual Fund
PPFAS Mutual Fund
Sundaram Mutual Fund
However,ICICI Prudential AMC, Birla Sun Life Mutual Fund and SBI Mutual Fund allow investments only through an offline transaction with an additional declaration signed by the client. Similarly, L&T Mutual Fund doesn’t allow USA and Canada based clients to invest in close-ended funds.

The best option available with the NRI investors is to appoint a POA(Power of AttorneY) for completing all their formalities back home before starting any investments through Mutual Funds SIP Scheme. They need to provide these documents through POA for updation of KYC with CAMS, KARVY or AMC branch offices. Once the KYC is complete, they are open to investments at any point of time in future as its a one time exercise. If you are staying outside India, then you can approach authorized officials of overseas branches of Scheduled Commercial Banks registered in India, notary public, Court Magistrate, Judge, Indian Embassy/Consulate General in the country where you reside. Such individuals are permitted to do IPV along with verification of originals.

Copy of Passport is compulsory
Copy of Overseas Address Proof (in English)
Copy of Indian PAN card
Two passport size photos
The fully Filled KYC form
Power of Attorney(POA)

It must be noted that any redemption of mutual fund units shall be credited to the same account only. If the investment is coming from NRO account then the redeemed amount will get credited in the NRO account and investments made through NRE account will find the redeemed amount credited in the NRE accounts. Sometimes the defintion of NRI is not understood properly by the beneficiaries and for the sake of clarity and brevity, the same is briefed herein below for the benefit of all concerned:

“A Non-Resident Indian (NRI) is a person residing outside India. This person may be an Indian citizen or of Indian origin. One is deemed to be a “person of Indian origin”(PIO) if he or she is a citizen of any country other than Bangladesh or Pakistan and if:

He or she has At any time held an Indian passport
The person or either of his or her parent or grandparent was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57of 1955);
The person is a spouse of an Indian citizen or a spouse of the person referred to in the above points.

I hope the progress on our effort to make you wealthy and a satisfied person has been going on as contemplated but your feedback matters a lot for getting this process more interesting.. Stay blessed stay connected

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