Just About Money: September 2009

Why you should avoid taking a loan

Many of us fall into a debt trap just for the fact the easy availability of debt/loans. We saw something in the market and it says you can get it financed easily so we take a loan, we have a travel plan and instead of saving up for it we take the easy route out by just taking a loan. Getting Married want a dashing ceremony easy take a loan. And at the end of it all we see that most of our income is going into paying those loans like the EMI for the House, EMI for the Car, for the refurnishing of the house and all other kinds of loan we can come up with. The overall impact - you tend to save less, your always thinking about money, your retirement kitty is down and all those things with a lot of tension. We should

1. Be very conservative about taking a loan.

2. A loan should be taken for which we can afford paying the EMI. It should not be more than 20% of our monthly income.

3. If we are planning to take a loan for marriage, we can either delay the big day or just plan something we can afford.

4. A loan for just refurnishing you house is not a sensible thing to do. We can maybe just have furniture we can afford.

5. Avoid as far as possible to keep any credit card debt. This is the biggest sin of them all.

6. Personal loans should be avoided as far as possible, since they have a very high interest rate and we generally tend to take them for expenses we can avoid.

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Fixed deposit / Term Deposit Interest Rates

I heard on the news the other day that banks are revising the deposit interest rates for the fixed / term deposits and i was actually looking for a deposit to be made. So different banks have different interest rates for fixed deposits (Term Deposits) and it gets very complicated if you start to look for the best interest rate in the market, its very difficult to go to each bank and find out the best interest rates. I have made a list of all the interest rates presently on my Google docs page and am sharing it with everyone and will hopefully update it as i get more information. The as on date interest rates for fixed deposits / terms deposits can be found on the this link....

Post Office Investment Schemes

One very good friend of mine today asked me about the Post Office Investment Schemes, so i thought why not share the information with everyone. So here it is in brief about all the Post office schemes....

1. National Savings Scheme - I have been investing in these certificates for some time now. They are issued by Department of post, Government Of India and are available at all post offices in the country. It is a long term safe savings Option for the investor. It is actually also a tax saving scheme which also provides reasonable secured as per the provisions of the Income Tax Act, 1961. The duration of a NSC scheme is 6 years. More features of the Scheme can be found here.....

2. Kisan Vikas Patra - I have recently invested in this scheme(KVP), it basically doubles your money in 7 years and 3 months and you can also do a premature withdrawal. It does not provide tax saving benefit. Also available at all major Post throughout India. The rate of return is 9.75 per cent, compounded annually. More Features of the Scheme Can be found here.....

3. Monthly income scheme (MIS) - This is one scheme i am planning to invest in just for the heck of getting a monthly income. Its an ideal scheme for retirees and you will see a lot of them have invested in them just to get the monthly payment of interest income. It is meant for investors who want to invest a sum amount initially and earn interest on a monthly basis for their livelihood. is meant to provide a source of regular income on a long term basis. More Features of the scheme can be found here.....

4. Recurring Deposit - I have one of these running for my son, i invest a monthly sum into this scheme and at the end of the period of five years, i will get a lump sum amount. It is basically a systematic way for long term savings, and is one of the best investment option for the low income groups. More Features of the scheme can be found here....