The new reforms passed by the Government has given a tremendous boost to the rural connectivity program. Under this plan, around 100 kilometers of rural roads will be constructed daily. Several car manufacturing companies are working overtime to develop low-cost vehicles to enable people in villages to own a four-wheeler.
Historically, people living in rural areas of the country were unable to afford a car due to high costs, bad road conditions, and unavailability of loans. All these problems have been overcoming with many lenders offering affordable and quick automobile loans.
Getting a car loan is now easy. Many lenders offer loans for new as well as used cars. The entire process is simple with minimum documents requirement. Borrowers are also assured of not facing any difficulties with flexible repayment options. Moreover, the loan amount may be repaid in Equated Monthly Installments (EMIs). The entire procedure from loan application to approval is completed within a few days.
Here are five tips to help you negotiate on the loan.
One of the best methods to reduce the car loan EMI is to negotiate its price. Most car dealers make big profit margins when they sell a vehicle. It is, therefore, recommended that buyers check with several dealers to bring down the cost of the car as much as possible. Often, dealers provide discounts and special offers especially during the festive season and buying a car during this period may help lower the cost.
These days, several banks and non-banking financial companies (NBFCs) offer automobile loans. As a result, borrowers are able to enjoy lower car loan interest rates. Most buyers rely on the dealers to arrange for the loan. However, the interest rates may be higher from these lenders because they often pay a commission to the dealers. Checking with other lenders is recommended to ensure borrowers receive the lowest interest rate.
Car finance is available for as long as five years. Most buyers often choose longer loan tenure to reduce their EMI. However, individuals overlook the fact that when they opt for a longer duration, they pay more interest. It is therefore recommended that borrowers choose a shorter tenure if they are able to afford a higher EMI. A shorter duration will help borrowers save a significant amount on their loan repayments.
Most people do not read the loan agreement before signing. However, it is important to read and understand all the terms and conditions prior to making the decision. Clearly understanding various features like interest rates and prepayment penalties is crucial. Seeking clarifications from the lenders before signing the agreement reduces the possibility of any difficulties in the future.
Buying a car is a huge financial decision. Based on your income, you may avail of up to 100% of the ex-showroom price of the vehicle. An affordable automobile loan now makes it possible for you to drive away your dream car.
As the name suggests, a used or pre-owned car loan is a facility offered to people who are looking to buy a used or pre-owned car.
Such cars generally come with lower registration fees and insurance charges, a slow rate of depreciation, and a lower loan amount to be borrowed. All in all, they offer good value for money.
But, not all the terms and conditions that come attached to these loans are well-documented or understood. Let’s take a look at some of the more common questions customers generally have about these type of loans:
You can easily apply for such a loan on our website or by visiting the closest branch. You will need to provide your details and the required documentation before your loan is approved.
Depending on the type of car, its condition and age, and your own loan repayment capability, the amount that the financial institution is willing to offer will vary. In most cases, you can get up to 90% of the total value of the pre-owned car. In certain special cases, finance for the entire cost is also approved.
Irrespective of whether you’re a salaried individual or a self-employed person, you can apply for a previously owned car loan. However, your age, salary and financial standing will be taken into consideration. You are most likely to get a loan approval if:
Note: In most of the above cases, you can also avail a loan for small business.
The tenure of the loan depends on the age and condition of the car. Typically, it ranges from a minimum of 1 year to a maximum of 5 years.
With minimal details and documentation, we ensure a simple and speedy used car loan process. Our wide network of branches at over 700 locations makes it super easy to access and super smooth to process your pre-owned car loan.
The Indian two-wheeler industry is one of the largest industries in the world. This is because purchasing a two-wheeler is the most convenient and affordable way to commute. The rural population depends on two-wheelers because of the convenience.
In addition to domestic companies, several international manufacturers sell two-wheelers in India. Most leading manufacturing companies are investing in this sector to take advantage of the huge demand for two-wheelers in the country.
Apart from the convenience and affordability, the easy availability of two-wheeler loans is a huge factor that drives rural demand. Here are five benefits of availing of such loans.
Lenders fund up to 80% of the cost of the motorcycle. This reduces your down payment, which is the amount you need to pay from your own resources while purchasing the bike.
Financial institutions offer such loans for a period of 12 to 36 months. The longer loan duration ensures you do not face any problems while repaying the loan amount.
If you are between 21 and 58 years of age, you may apply for a 2-wheeler loan. Lenders require basic documents, such as residential, income, and photo identity proof. In some cases, if you do not have an income proof but have other documents, you may still qualify for the loan. The entire procedure from loan application to approval is quick and easy. Lenders often process your loan within two days of receiving your application.
The interest rates on motorcycle loans are not very high. The affordable rate makes it easier for you to pay the Equated Monthly Installment (EMI). Moreover, a flexible repayment schedule ensures you have no financial difficulties while repaying the borrowed amount.
If you receive a lump sum during the duration of the loan, you may repay the borrowed amount before the loan tenure ends. Most lenders provide such facilities at a nominal pre-closure rate. It is important you check these charges before you prepay the loan. This will ensure you do not pay more than a reasonable amount while prepaying the borrowed amount.
Several two-wheeler dealers partner with financial institutions to provide quick and affordable loans to you. However, it is recommended you check with different lenders to ensure you do not pay a higher rate of interest. A lower interest rate reduces the amount you repay during the loan tenure. This may help you save a significant amount in the longer duration. Furthermore, lenders may levy additional charges, such as processing fees, legal expenses, and late payment penalties. All these extra charges may increase the actual cost of availing of a motorcycle loan. It is important you clearly understand all these charges to reduce your financial burden.
You may apply for a loan online or visit the lender’s nearest branch. Reputed and reliable lenders hire experienced personnel to assist you during the entire loan application and approval process. You must understand all the terms and conditions before signing the agreement and opt for a loan based on your repayment capability. With the help of affordable two-wheeler finance, you may easily purchase your dream motorcycle.
Owning a home is probably your biggest dream and achieving it is now possible with a housing loan. Such loans are available for constructing a home or buying a ready or under-construction property. You may also opt for a loan to renovate your existing home.
Most banks and non-banking financial companies (NBFCs) offer such loans. Here are five steps to avail of a housing loan in India.
The eligibility criteria differ from one lender to another. Generally, lenders consider your age, income, savings, employment status and consistency, as well as assets and liabilities to determine your eligibility for a home loan. You may check your eligibility on the lenders’ website or visit the nearest branch before submitting the application.
The next step is to submit a duly filled application form. If you are unable to complete the form, you may seek help from the lender’s representatives. You will also need to submit your documents along with the application form. These documents include income, age, residential, and photo identity proof, latest photographs, and property-related documents.
The lender will assess your various documents and application form to determine your repayment capability before approving the loan amount. Most lenders sanction up to 75% of the property cost excluding the land cost (in the case of self-construction). The financial institutions also undertake a legal verification of the property to ensure there are no encumbrances on it. An independent property valuation is also undertaken before approving your loan application.
After checking the property title and your documents, the lender will issue a sanction letter. The letter provides details on the loan amount, tenure, and interest rate. Once you accept the sanction letter, you will sign the home loan agreement. This agreement includes all the terms and conditions governing the loan. You will have to submit the original documents to the lender.
After you sign the agreement, you must pay the stamp duty and register the sale agreement. The lender will disburse the entire amount for ready possession property. However, if your home is under construction, the disbursement will be according to a pre-determined schedule.
Now that you know the procedure, here are three factors related to housing loans you must know.
Such loans are available for a maximum period of 20 years. You may opt for a shorter duration if required.
You may repay the borrowed amount either in monthly, quarterly, or half-yearly installments. The equated monthly, quarterly, and half-yearly installments comprise both the principal as well as the interest amount.
Interest may either be fixed or variable. With a fixed interest, the rate is constant during the entire loan tenure. However, the rate may be revised at the end of three years in the case of changes in the overall market interest rates. Variable interest changes according to the fluctuations in the money market rates.
Buying a home with a loan is not difficult; however, you must borrow according to your income. Opting for a loan is beneficial as you do not need to provide additional security while availing of a housing loan. The lender will create a mortgage on the property and retain all original documents until the end of the loan tenure. Moreover, you may prepay the borrowed amount earlier without incurring any penalties.
If you have never sold a car before, it may seem like a daunting task. You need to lay out a plan with strategic steps to get the best price for your car.
You will need to list your car, answer calls from potential buyers, give test drives, and finally close the deal. The entire procedure can be exhausting and time-consuming.
Here are four tips to ensure that you are able to procure the best price for your car:
A car that looks good and is in a good condition makes it easier to procure the best price. Prospective buyers would be willingly to pay a higher price if your car is well-maintained. Moreover, if the new owner requires a pre-owned car loan, the institutions would be more willing to sanction the application when the vehicle is well-maintained. You must get the car cleaned both from within and outside and repair any dents or cracks.
To attract more buyers, you must list your car online along with the relevant details. You must also upload a few high-resolution photographs from various angles to show the car’s exterior and interior condition. Also, list the ownership details, insurance type and validity, certification, and other related details.
It is important that you determine the right price while listing your car. You may look for similar listings to know the prevalent market price. You may quote a higher price and then negotiate it to a reasonable amount. If your car is maintained well, you may be able to justify a higher price. Even if a few buyers are driven away by the higher price, do not be disheartened because an online listing often garners huge interest.
If your car insurance is valid, the same must be transferred to the new owner. However, if the insurance has expired, the potential buyer must be informed since it also affects the buyer’s used car loan application. Ownership transfer costs are minimal and the local Road Transport Authority (RTO) may be able to assist you.
It may be advantageous to get an unbiased assessment of your car before listing it for sale. Taking the time to rectify the minor defects will help you to get the best price for your car. It will also make it easier for the buyer to procure a loan for used cars, which may quicken the entire procedure.
Since the start of the 20th century, the Indian used car market has seen tremendous growth. Currently, one pre-owned car is sold for every sale of a new vehicle. The market size is expected to witness a Compounded Annual Growth Rate (CAGR) of 15.2% and may reach USD 75 billion by 2023.
There are many reasons why the used car market in India is witnessing a steady growth. Here are four trends in the used car market:
Previously owners retained their vehicles for longer periods like six to seven years. However, technology is rapidly developing due to which newer models are released in short periods. Moreover, many urban families own more than one car, which reduces their usage ensuring these are maintained well. This allows individuals to avail of a car loan to buy a used vehicle at affordable prices.
Between 2005 and 2007, the Indian used vehicle market was controlled by the unorganized players that owned almost 95% of the total segment. The market share of organized players was only 4% during this period. However, the share of organized players has increased to 15% in 2010 – 2012 and the same is further expected to increase to 18% by 2021. Therefore, consumers are more confident about the quality of the pre-owned vehicles. Moreover, these organized vendors assist buyers to avail of a used car loan, which contributes to the rise in the demand.
In the past, society perception was not favorable when an individual opted to buy a used car. However, this is slowly changing and a higher number of people are no longer worried about owning old vehicles. The quality of these pre-owned cars is good with ownership reducing to shorter periods. Moreover, if a person is a new driver owning a used car is prudent until he is more confident about his driving skills. The easy availability of pre-owned car loan makes it easier to own a vehicle.
The economic slowdown has reduced the sales of new cars. However, the used car markets have seen a rise. The increasing fuel price is another reason why the sale of pre-owned vehicles is rising. Buyers would like to reduce their total car ownership expense by decreasing the loan for used cars amount thereby reducing the monthly installment.
As acceptance grows, the sale of used cars is increasing. More and more buyers find this option more affordable and see a true value for money in it.
Financial institutions provide loans to farmers to purchase new or used tractors. The tractor may be used either for agriculture or for commercial purposes. Such loans have several beneficial features as listed below:
The entire procedure to apply for tractor loans is simple and quick. You may either apply online or visit the nearest branch. Here is how to apply for a loan:
The eligibility criteria may vary from one lender to another. However, most lenders may require you to own a certain minimum acreage of land to be eligible for a tractor loan. Moreover, you must have adequate income to ensure you are able to make timely payments on the borrowed amount.
The documents needed for such loans are minimal and not complicated. You need to submit the Know-Your-Customer (KYC) documents and proof of income to apply for a tractor loan from Mahindra Finance.
When you apply for the loan online, you must provide some basic details. These include your personal information such as name and birth date along with your contact details. You will have to have to submit employment type, income details, and the loan amount required to enable the lenders to process your tractor finance application.
Before you make your decision, it is important you check all the terms and conditions. You need to determine the rate of interest, the repayment tenure, processing fees and other charges, and monthly installments to ensure there are no surprises in the future.
The demand for finance for tractors is slowly rising due to its easy availability and hassle-free procedure. The documents required are minimal, which reduces your efforts and saves time. More importantly, you do not need to provide additional collateral like land to avail of such loans.
Several lenders provide these types of loans and it is recommended you compare various institutions to make an informed decision. You may research online to compare different lenders, check terms and conditions, and other details prior to applying for a loan.
If you want to buy a tractor, apply for a loan today and achieve your dreams.
If you are planning to buy a used car then you are in for some work. A used car surely has the benefit of being more affordable. However, you need to find the one that is in the best possible condition. You also have to get the right used car loan so that you do not have to overpay in interests. All of these require some planning. You cannot afford to make mistakes. Here is a list of the common mistakes people make while availing of a used car loan.
Finding the best loan option for buying a used car requires you to spend some time researching about the lenders. Many lenders will offer you a good contract on the loan, but only one of them will offer the best deal. You need to spend some time online comparing the interest rates and down payments of the loans. Find a balance between the reparation of the lenders and the benefits of the loan. You should not just settle for any lender to get the cheapest loan. However, refrain from selecting the most popular lender who charges a high- interest rate.
A proper used car valuation is the first step of buying one. Do not just rely on your instinct for this process. Once you decide on which model of car you want, look for the used car seller near you who has that particular car. Visit the showroom and see the car for yourself. First, check if the interiors and the exteriors of the car look in decent shape. From the music system and air conditioner to the tires, check every aspect of it. Ask for the paperwork and maintenance history of the car. Find out if the car had ever been in any accident, and what repair work it had needed.
The second-hand car loan you have taken requires you to pay interest on a regular basis. You surely do not want to use the money to buy a used car that is less than adequate. A thorough inspection of the car is required before making any final decision. It might be a smarter decision to hire a third-party car inspector. They can help you to figure out if the car is worth the buy. The final step is to take the car for a test drive before finalizing a deal. Get a feel of the vehicle while driving it. That always helps to make the right decision.
Not everyone can negotiate well, but that does not mean you should pay whatever the car dealer is asking for. You should not pay more than the used car finance you have from the loan you have taken. Try to get the best possible deals on the car before completing the paperwork-related formalities. The car’s insurance and the registration document have to be transferred to your name before you can legally own it.
Only when all the above steps are completed, you can be sure of getting the best out of the entire deal.
A commercial vehicle loan is available to any individual or organization, which is planning to buy a commercial vehicle. These loans are often costlier compared to personal vehicles; hence, you will need a loan that can help you finance the purchase. Before you apply for the loan, here are a few things that you need to know about.
Eligibility
The commercial vehicle is a necessity for many businesses, especially for the delivery and transportation-related companies. Such people can apply for the loan:
The application process
Applying for commercial vehicle loans is quite simple, just like any other loan offered by a financial organization. Either you can visit their branch to ask for an application form or you can visit their online portal to find the same.
You need to fill the form with your personal and professional information. You also have to provide them with your address and contact information. Once done, you need to submit the required documents so they can verify your information. For the online procedure, you can upload the scanned copies of the documents too. If your loan application is accepted then your lender will ask you to complete the verification procedures and other formalities.
Required documents
To get the commercial vehicle finance, you must submit the following documents with your loan application:
Loan tenure and amount
The amount of loan you can get for the commercial vehicle depends on your requirements. Sometimes, your past relationship with the lender can determine the amount too. Most lenders provide up to 100% of the price of the vehicle you are buying. The loan repayment tenure can be anything from six months to five years.
Interest rate
The interest rate can vary depending on the lender. The rate of interest for these loans can be 10-15% or more. It also depends on your credit score, business turnover, the number of vehicles you already own, your relationship with the lenders, and other factors. You can use a commercial vehicle loan EMI calculator to get an idea.
By using the commercial vehicle loan calculator, you can get an idea about the monthly installment amount that you have to pay. However, you also need to keep in mind that you will be charged a processing fee. It is charged when you are applying for the loan, and it is not refundable. The amount depends on the value of the loan.
Buying a car of your own is a ‘dream come true’! When you are young, owning your first car can be identified as a symbol of success. However, purchasing a vehicle is not a cheap affair. If you have just started working then you probably do not have enough savings to afford a car. This is where a car loan comes in. The loan can help you with the finance at the time of purchase and you can repay the money over a long period of time.
In India, the loan for a vehicle comes in different basic types as listed below.
This loan option is available for people who want to buy a brand new car. The loan can be taken to buy any car model from any maker. You will have to pay an interest of 9-14% per year over a period of one-seven years.
The truth is that not everyone can afford to buy a new car, even with a loan. The good news is that you can always purchase a used car with the help of a used car loan. Most lenders will finance up to 85% of the car’s price. You will need to pay a yearly interest of 12-18%. You will have one-five years to complete the repayment. However, to get a loan for the previously owned car, the vehicle has to be less than five years, and, at the time of the loan’s maturity, the car cannot be more than ten years old.
A business organization or an individual, who owns a business that requires cars, can opt for a commercial vehicle loan. This kind of loan comes with a 10-15% interest rate that you will have to pay yearly over a period of six months to five years. The amount of loan you can get depends on your business’ yearly turnover and the number of cars you already own.
Not everyone wants to buy a four-wheeler; some people love a bike more than a car. If you are a bike enthusiast then the two-wheeler loan will help you get one. The loan for two-wheelers comes with a yearly interest rate of 11-18% on the amount paid for the bike. You have to be at least 18 years of age to avail of the loan. However, some lenders require a minimum age of 21 years.
The tractor loan is available for people or organizations, which have a regular source of income from any agricultural activity. It is also available for people who want to rent tractors as a business. The tractor loan is available for a yearly interest of 12 % on the loan amount. You have to pay a monthly interest for five years to complete the payment.
When applying for a loan to buy any kind of vehicle, be careful about which lender you choose. Spend some time comparing your available options before settling for one.
If you are in an agricultural business then you know it more than anyone else how important owning a tractor is. The tractor not only simplifies your farming job but it also helps add productivity to your business. Getting a new tractor can be a costly affair but it can be made less worrying with a tractor loan from a trusted lender. This loan is also available for people or businesses who want to enter the tractor renting service.
Eligibility
The eligibility criteria can differ from lender to lender. However, the same can be divided into two categories, for farmers, and for non-farmers.
Farmers:
Non-farmers:
Expenses
The annual interest rate for the loan can vary from 13-20% depending on your lender. You will also have to pay a processing fee of up to 4% of the total amount of loan sanctioned. This fee can differ for different banks or other lending companies. If you ever fail to pay the interest on time, you will have to pay a penalty fee of 2% over the regular Equated Monthly Installment (EMI). Other than these, lenders can include other charges, which will be mentioned in their paperwork. You can use an online tractor loan EMI calculator in order to get an idea about how much you have to pay in order to recompense the debt.
Benefits
The tractor finance comes with many great benefits. Here is a list of a few that will convince you of its effectiveness:
With the tractor loan calculator, you can check the benefits across different lenders in order to easily find the best possible choice for yourself.
Getting a personal loan against your assets is a very common practice. One of the securities you can use is your vehicle. If you are going through some financial difficulties then maintaining a car can be very challenging for you in any case. So, using that car to get a loan approved can work for you.
When you apply for a loan against a vehicle, the lender will hire an expert to determine the current market value of your vehicle. Most lenders offer loan up to 70-85% of the determined value of the car. Once the loan application is approved, the lender will own your car and you cannot sell it before the loan is repaid. Depending on your lender, you can get up to two years for repayment. If you decide to repay the amount before the tenure of the loan is over, they will charge you a penalty.
Eligibility
To get an approval for a personal loan, you need to have a steady source of income and a good credit score. The respected lenders do not trust any applicant who does not meet these criteria. However, the eligibility criteria for any loan against a car are more flexible. Here are the points to keep in mind when you are applying for the loan:
Required documents
If you are expecting a good loan against a car interest rates then you need to make sure to apply from a lender who has a great reputation. They will require you to submit specific documents in the time of application. Here is a list of the most common ones:
The value of your car and the tenure of the loan are decided based on the maker of your car, the model, the age of the car, and if you have a car loan.
Finding the best lender to get your loan against car
Once you are sure that you meet the loan against a car eligibility requirements, you can start looking for reputed lenders. Take your time to compare the different loan providers to find the best option for yourself. Make sure that you maximize your benefits.
If you are planning to buy a new car this year, you have a stroke of good luck. In 2019, some of the most reputed makers are launching advanced cars in India. From the sports car to a family car, they are coming in all categories. You also have the best car loans available in the market so you do not have to put a dent in your savings. Here is a list of the cars you can consider.
Launch month: May 2019
Price: INR 8 lakh
This is a compact Sports Utility Vehicle (SUV), which will compete against the likes of the Maruti Brezza and Ford EcoSport. Unlike the cascading grille that can be seen in their newest models, Hyundai is using the rectangular grille design for this one. The car is expected to come to India with a square fascia.
Launch month: May 2019
Price: INR 70 lakh
This fourth generation X5 was announced by BMW last year. The car will come with a newer, more stylish design. It will be more loaded in terms of features and will have a larger body. The interior of this car model is expected to have everything that you expect from BMW. The instrument cluster has been fully digitalized.
Launch month: May 2019
Price: INR 8 lakh
This SUV is an updated version of its previous models. The enhanced features include ‘powertrain’ options. The front grille and bumper design have been revamped to provide the car with a better appearance. Features such as rear parking sensors, driver airbag, speed warning, and seatbelt warning have been added to the car. With a new car loan, you can own this car as soon as it comes to the market.
Launch month: May 2019
Price: INR 65 lakh
This is one of the most anticipated cars of 2019. The reason for that is not only the maker but also the fact that the Mercedes-Benz GLE is entering its second generation with this new model. The grille of this new model will be bigger than the last one, and it is getting bigger in dimension. The interior will have an infotainment system with a wider screen and a storage capacity of 825 liters. It can be expanded to 2055 liters if you fold the seats on the second row.
Avail of a car loan to buy your dream car
Everyone has a dream car in mind, but not all have the bank balance to afford it. However, a suitable car loan can definitely help you in fulfilling your dream. Financial companies offer a lump sum in the form of a loan to help you buy your desired car. The car loan interest rates are competitive right now among different lenders and you must benefit from that. To find the best deals, use an online car loan EMI calculator and apply for a loan from the best lender that you can find.
Owning a car, whether for personal or commercial use, is a practical necessity today. But buyers-to-be often wonder: should I buy a new or used car? Won't a second-hand car be good enough? The short answer is YES. Second hand car prices are lower compared to a new car. Getting a second-hand car from a genuine seller saves money and makes it possible to buy a high-quality product at a low price.
But this is not the only advantage. There are other benefits of getting a second-hand vehicle; read on to find out what they are and decide whether you want to purchase a second hand car or not.
The value of a newly bought car reduces substantially once you take it out of the showroom. With the high registration and commercial license fee, the actual cost is very high. If you purchase a second-hand vehicle, you can buy the car at much affordable prices. The use of a vehicle is long-term, and a new car is not necessary as the price comes down as soon as you take the car out of the showroom.
Second hand car prices are lower, and so is the insurance premium. This is because the premium amount is calculated after taking depreciation into account. The older the car, the lower the premium and vice-versa. You can get more details on second-hand car insurance - or even loans from Mahindra Finance.
New car or used car shouldn't be the question for novice drivers. For those who are learning to drive, buying a second-hand car is ideal. Not only do you pay less to buy the vehicle, but you also won't have to worry about putting dents or scratches on it since the car is likely to show some wear and tear already.
If you are buying a car for commercial usage, buying a pre-owned vehicle will be a wise decision. A used car from a genuine dealer comes at a lower cost and performs exceptionally well. Once you've used the car to its full capacity and have gained profits after deducting the cost price, you can upgrade to a premium car for increased comfort and revenue.
As the second-hand vehicle is already tested, you will know the fuel efficiency and the possible defects in the car. With a new vehicle, although there is a warranty, the vehicle might have issues which are not detected.
Well-maintained used cars are cost-effective, low on maintenance, and easy to upgrade. So why hesitate? Go for it! If you are wondering which is the best second hand car to buy, that would depend on your needs and budget. Fix a budget, list down the features you want, and compare the available options. You should check out the reliability ratings of the car and ask your friends about the best car for your needs. And if funds become a hurdle or you don't wish to exhaust your savings for buying a used vehicle, a pre-owned car loan from Mahindra Finance can be your best bet.
The craze for passenger Electric Vehicles (EVs) is at an all-time high, with home-grown and global brands coming out with a slew of products in the Indian electric mobility segment. However, the commercial EV market already had a niche presence in India, with a limited number of offerings from prominent commercial vehicle makers.
Here are some of the highest-selling brands for city and rural mobility in the commercial EV space in India:
The rugged and reliable highly popular Tata Ace saw a commercial EV version in 2022. Named Tata Ace EV, this commercial electric vehicle looks the same as the Ace Gold, with a familiar sturdy design comprising of rounded headlamps and a minimalist grille at the front.
Even the cabin looks similar with the inclusion of a fully digital instrument console. The powerful 36.2 bhp electric motor generating 130 Nm of torque lets it sail even on rough roads. The IP67-certified lithium-ion battery of the Ace EV electric 4-wheeler commercial vehicle has a claimed driving range of 154 km.
A product of the well-known 'Ultra' truck range from Tata Motors, the heavy-duty Tata Ultra T7 EV is the most dependable load-hauliers for tough urban and rough rural transits. It is another compact electric goods vehicle that is positioned above the Ace EV. In terms of the overall design, it is identical to the original Ultra T7.
The Ultra T7 EV truck sources its power from a 220-kW electric motor that gives out a maximum torque of 280 Nm. The truck comes equipped with a big 62.5 kWh lithium-ion battery pack, which takes 2 hours to get fully charged and returns a range of 100+ km.
Based on the Supro compact van designed by Mahindra for rural and semi-urban markets, the Mahindra eSupro commercial EV is available in both cargo and passenger variants. In the passenger version, the eSupro is available with opposite-facing seats at the back, which makes it a capable people-mover for semi-urban locations.
The eSupro commercial electric vehicle is powered by a 25 kW three-phase electric motor, churning out the highest torque output of 90 Nm. The 200Ah battery pack of the eSupro offers a range of 112 km in the passenger version and 115 km in the rough and tough cargo version.
One of the smallest and most affordable commercial EVs in India, the Mahindra Treo Zor spearheads Mahindra’s presence in the EV commercial vehicles category. The Treo Zor takes care of your savings by providing maximum driving range with its capable 8 kW electric motor that gives out a torque output of 42 Nm. Despite being economically priced, it features a long-lasting 7.37 kWh lithium-ion battery pack offering a range of 80 km under normal driving conditions and takes 3 hours and 50 minutes to charge fully.
The only commercial electric vehicle made by Piaggio in India is the Ape E-City electric heavy-duty vehicle, which is the fully electric version of the Ape three-wheeler that is very popular in the semi-urban and rural segments. There are slight tweaks in the design of the Piaggio Ape E-City electric goods vehicle over its diesel-powered version.
Powering the Ape E-City is a 7 bhp electric motor, which generates a maximum torque output of 29 Nm. The 4.5 kWh lithium-ion battery pack of the Piaggio Ape E-City returns a range of around 110 km, which is one of the highest among e-commercial vehicles in its class.
Buying electric commercial trucks such as the ones mentioned above has become even more affordable now with easy finance options from Mahindra Finance. Get in touch today and avail hassle-free finance options at attractive interest rates!
Today, buying a car is easy due to the ready availability of car loans. However, you might be wondering ‘how to get a car loan?'. A car loan facility disburses a certain amount of money on your behalf, and you must pay it back through EMIs within a predetermined time. Interest is usually applicable on a loan, and until the principal amount and the interest are fully paid, the lender has the authority to repossess your vehicle in case of default. How much car loan can I get is a question that every car buyer has. Read on to know more about car loans.
So, how easy (or difficult) is it to take a car loan? The safest and easiest way is to get it from a bank or a non-banking financial company (NBFC) like Mahindra Finance. Banks and NBFCs often have multiple car loan facilities, so you should choose one that meets your requirement. Above all, there are some specific criteria that you need to fulfil to get a car loan.
Some things that bank and NBFCs consider while sanctioning a car loan are:
Here is a list of documents that you should keep handy while applying for a car loan:
Do note that the submitted documents should be authentic and up to date. The lender will always perform a background check, so if you have had any dispute with a bank or NBFC in the past, be transparent about it. Do not suppress any information.
Besides how to get a car loan in India, what loan amount am I eligible for is another common question that comes to the applicant's mind. Lenders may offer a loan that is 70%-100% of the vehicle's ex-showroom price. Still, the loan amount ultimately depends on the model of the car and your credit profile.
Most of the time, interest rates for car loans are fixed and cannot be negotiated. However, if your credit score and reputation are excellent, you might be able to get a loan at affordable interest rates. Do bear in mind that interest rates fluctuate. So, keep an eye on the market and see how the interest rates move.
Sometimes, it may happen that your regular bank might offer you a preapproved car loan, which will make the entire process hassle-free. For further details, do get in touch with your chosen bank or NBFC.
A tractor is a necessity to start and run an agricultural business. Though the markets are full of feature-packed and technologically advanced tractors, getting your hands on the tractor of your choice can be an expensive affair. But not with a tractor loan!
A lot of lenders, such as Mahindra Finance, offer tractor loans to farmers to help them kick-start their agricultural business. As far as tractor financing rates are concerned, nowadays, lenders offer affordable tractor loans to make it easy for you to purchase your preferred tractor. You need to consider whether to get a tractor loan from a bank or an NBFC. As far as the banks are concerned, the rates might be cheaper, but the process is stringent. For NBFC, the process might be lenient, but the rates might be slightly higher. Although the higher tractor financing rate will not matter much, it is imperative to select the right partner for your loans.
1. Application form
2. Photographs
3. Identification proof like Aadhaar card, PAN card, driving license, etc.
4. Residence proof
5. Landholding proof
6. Income proof
7. Land valuation report
8. Tractor quotation
The tractor financing rate varies from 9% to 23%. Therefore, it is vital that you lock in the price at the lower end of the spectrum to save on interest costs. Interest rate also depends on a variety of factors like the tractor model, loan amount, loan tenure, CIBIL score, land valuation report, etc.
In most cases, the loan tenure is five years or 60 months. Ideally, you should try and pay the loan as soon as possible to save on the interest amount. A 5-year loan is considered an ideal choice as the rate of interest is not very high.
The tractor financing rate is not the only charge you have to pay. Other charges such as the processing fee, prepayment fee, delayed EMI payment charges, and documentation charges should also be considered while applying for a tractor loan.
It is not mandatory to submit collateral. Some lenders make it compulsory for you to keep some collateral. You should check with the lender whether collateral is necessary or not. But your tractor will need to be hypothecated as well.
The minimum margin required by most financing institutions is 15%. But you should check with the lender to know the exact percentage required. The tractor down payment required should be checked with the lender to know if you have the amount.
You can contact the lender through offline channels or apply for a tractor loan online. The tractor financing rate does not depend on whether you approach through offline or online channels. If you want quick disbursal of your loan amount (within two days of approval), you can check out Mahindra Finance tractor loans as well. They allow flexible loan repayment plans along with loans on a wide range of tractors. The documentation is easy and flexible as per your requirements.
As the name suggests, a commercial vehicle is used specifically for commercial purposes, of which transporting goods from one point to another is the prime priority. As we know, lakhs of businesses - both small and large - operate in India. Commercial vehicles play a vital role in their development and help to boost the country’s economy.
Here are the six main types of commercial vehicles in India:
Also known as dumpers or dumping trucks, tippers are predominantly used for transporting materials like sand, gravel, or waste from one place to another and dumping them. Generally used in sectors like construction, farming, etc., tippers have an open box fixed at the rear, which can be lifted by hydraulic rams behind the driver’s cabin.
Trucks are usually used for carrying payloads and have a large loading bay behind the driver’s cabin. However, unlike the tipper, in which the loading bay can be lifted hydraulically, the loading bay in a truck is fixed. Trucks are usually categorised into three types - light-duty, medium-duty and heavy-duty, depending on their load-carrying capacity and dimensions.
The largest vehicle in the commercial vehicle category, trailer trucks are usually based on heavy-duty trucks and used for pulling long trailers fixed on a flatbed attached to their rear or hinged as a separate entity. The type of hitch or hinge used to attach the large box behind the truck body is called a fifth wheel. Such large commercial vehicles are routinely used to transport oversized goods.
The juniors in the commercial vehicle classification in India, mini trucks are smaller than even light-duty trucks and have up to four wheels. Their flatbed is small and the dimensions are compact, which makes them practical and easy to use in an urban environment and for intra-city purposes. These vehicles are used for small cargo deliveries and transporting light loads between short distances.
A pickup van is an extension of the mini truck and comes with more creature comforts to make them feel more practical and comfortable for family usage. Pickups usually have a single cab or double cab design, with a compact flatbed behind the cab for transporting light loads. They usually come with an open rear section that can be altered into a closed compartment.
A transit mixer is a compact or heavy-duty truck that comes integrated with a mixer used for guiding and mixing cement or other materials. Transit mixers are usually used for construction purposes, and the mixer body can be operated even when the vehicle is in motion.
All these types of commercial vehicles in India generally are low on modern features but are mechanically well-manufactured and capable of carrying much higher loads than regular vehicles. And just like regular vehicles, commercial vehicles are also available for purchase through easy finance options. Mahindra Finance is one of the pioneers of commercial vehicle loans , which are available at flexible interest rates and tenure options.
When it comes to tractors, Swaraj is one of the most trustworthy and oldest brands in India. The company has been in the tractor business for decades and currently offers a wide range of tractors that are well-differentiated based on their engine size, powertrain, and lifting capacity.
Here are five of Swaraj best tractors available in India:
The Swaraj 744 FE is powered by a 3136cc three-cylinder diesel engine, which can produce a maximum power output of 45-50 hp. Featuring 8 forward and 2 reverse gears, along with a 305mm single-plate dry clutch, the powertrain of the Swaraj 744 FE enables it to attain a maximum forward top speed of 29.2 kmph. This tractor features live hydraulics with position control, automatic draft control, and mix control and claims a lifting capacity of 1700 kg at lower link ends.
The Swaraj 744 XM gets a 3307cc three-cylinder engine, which is slightly bigger than what the 744 FE has. However, this engine also produces 45-50 hp while mated to a gearbox having 8 forward and 2 reverse gears that allow the tractor to attain a forward top speed of 29.6 kmph. This high-selling Swaraj top model gets two levers and one toggle switch live hydraulics system having automatic position and draft with mix control. Swaraj claims a lifting capacity of 1700 kg for the 744 XM.
Powering the Swaraj 735 FE is a 2734cc three-cylinder diesel engine, which is capable of producing a power output in the range of 35-40 hp. The 735 FE gets 8 forward and 2 reverse gears and a 280mm single-plate dry clutch while claiming a top speed of 27.8 kmph. This best Swaraj tractor, in terms of numbers, comes equipped with a live hydraulics setup for position control, automatic draft control, and mix control and claims a lifting capacity of 1000 kg.
The Swaraj 717 is an affordable entry-level tractor from the manufacturer and is powered by a small-capacity 863.5cc three-cylinder engine. Paired with a gearbox having 6 forward and 3 reverse gears and a 200mm single-plate dry clutch, the engine in the Swaraj 717 produces a maximum power output of 15 hp and a top speed of 25.62 kmph. This best Swaraj tractor in the entry-level segment claims a lifting capacity of 780 kg.
One of the largest and most powerful tractors available from Swaraj, the 963 FE is powered by a 3478cc three-cylinder diesel engine. The engine in this Swaraj 963 top model is paired to a transmission unit consisting of 12 forward and 2 reverse gears and produces a maximum power output of 60-65 hp. The top speed of the Swaraj 963 FE is 31.7 kmph. With live hydraulics and fixed-type lower links, the Swaraj 963 FE boasts 2200 kg of lifting capacity.
All these high-selling tractors from Swaraj are currently available with easy financing options from Mahindra Finance under its Tractor Loan option, which currently offers the most affordable rates of interest and flexible tenure.
Small businesses require funding at various stages – while getting off the ground, managing operations, maintaining inventory, upgrading equipment, and even recovering from losses. When running a Small and Medium-sized Enterprise (SME), it is imperative to optimise available resources in the best possible way. Sometimes, however, this still may not be enough to keep things running smoothly.
In such a scenario, some extra cash flow can go a long way. While there are several ways to fund your business, a small business loan or SME loan, can be the ideal solution to help steer things in a new direction.
There are many tangible benefits to taking such a loan. Here below, we list some of the most important ones.
Easy & Quick
With the world going digital, business loans have become much easier to access. In fact, today, many banks and lending institutions offer such loans without collateral. This makes it easier for small businesses to sustain their ventures. Further, the online application process for availing this facility is simple – with minimal steps and documentation.
Flexible Repayments
Nowadays, SME loans come with flexible repayment options. Banks and lending institutions usually understand the complexities attached to running a small business. As such, they offer flexible terms and conditions. They may allow an increase or decrease in EMI based on the financial condition of the company, and also allow bullet payments for periodic payment.
Low Rates & Charges
The interest rates for SME loans tend to be lower, especially in the case of government-backed schemes. Such loans are typically designed for public welfare. Overall, several factors are taken into account before disbursing the loan. These aspects include credentials of the borrower, tenure of the loan, business model and balance sheet of the company. Once approved, there are nominal one-time costs attached to the loan, such as processing fees.
Business Development
The required cash flow can help grow and expand your business. With stronger finance, manpower, technology and equipment, you have all the tools necessary to take your vessel to the next level.
Tax Benefits
Lastly, and quite importantly, you receive tax benefits under the Income Tax Act, wherein a part of the profit used for repaying the loan amount is exempt from tax.
Nowadays, especially for small establishments, business loans have become the order of the day. Along with all the unique benefits and features offered, they are also increasingly easy to take and repay.
If you are a growing Micro, Small & Medium Enterprise (MSME), it would be handy to know that you can always count on an MSME loan for your business needs. And, for the best loan rates, you should check out the Mahindra Finance SME loan plan.
Small business lending is more complicated when compared to individual loans. Such lending allows Small and Medium Enterprises (SMEs) to carry out their business operations smoothly. Often, these loans provide incentives that help the SMEs to reduce their costs.
Various financial institutions offer such loans for up to three years for meeting different fund requirements and may be customized to meet the specific needs of your business. Different lenders have different eligibility criteria.
Here are some basic eligibility criteria you have to meet to apply for small business loans:
Required documentation
The documents required to apply for business loans are simple. Here is an indicative list of documentation:
Before you apply for Mahindra Finance SME loan, it is recommended you do the following:
It is important you have a detailed and robust business plan before submitting your application. This is crucial to convince the lenders that your proposal is financially viable. The business plan must include details such as capital expenditure, employee and marketing costs, and debt repayment capabilities.
You must check that your credit report is updated and accurate. Having a good credit history is favorable when you apply for an MSME loan (micro medium and small enterprises). Lenders review your credit report before approving your application.
Your business plan must include financial projections for the next three to five years. It is recommended you adhere to industry standards while doing the projections. You may also have to follow certain formats that help the lenders determine the financial feasibility of your business.
Such loans are available at competitive rates of interest and may be structured as per the specific needs of every borrower. Lenders also offer various repayment options to ensure you are easily able to service the loan.
Whether you are an entrepreneur or an existing business owner, it is possible that you require external finance. You need funds to buy equipment, meet working capital requirements, or expand your business.
In case you require funds, you may choose from multiple loans offered by the many financial institutions in India. With several available options, making the right choice may seem confusing. If you are not cautious, you may work with the wrong lender and face severe consequences.
Here are some basic questions that you must answer before you apply for a business loan.
After answering these questions, you may apply for a loan offered by the lenders. Here are three tips to help you choose the right loan:
Lenders offer different types of business loans to meet the various needs of borrowers. You need to review the purpose for which you need funds, such as meeting working capital, a line of credit, vendor financing, or others. Moreover, you need to understand how much of the fund requirements may be self-financed. This will help you narrow down potential lenders.
Whether you are a Micro Small Medium Enterprise (MSME), Small Medium Enterprise (SME), or a large, venture you need to meet certain eligibility criteria. It is recommended you check these criteria to understand if you qualify for a Mahindra Finance SME loan or not. Moreover, you must also check terms and conditions, interest rates, loan tenure, processing fees, and other charges before you avail of a loan. Knowing the repayment schedule prior to disbursal will help you plan your finances properly to ensure that you are able to make timely repayments on the borrowed amount.
Lenders may take a few weeks to several months to process your SME loan application. It is recommended you check the processing time with the prospective lender to ensure you receive the funds when required.
Use online financial platforms to compare various lenders and to procure an affordable interest rate. Adhering to the aforementioned tips ensures the procedure to apply for an MSME loan is quick and hassle-free. It is crucial to work with a reliable lender to avoid any issues in the future.
The most important factor to start a business is the capital. The basic fact is that the more capital you have for your business, the more your business will succeed and prosper. The best way to get capital for your business is through a business loan. There are different ways you can grow your business through a loan. SME loans are available for different types of businesses and for various purposes in the business. Here is how you can use the funds to grow your business.
You will need to do a lot of planning and funding to expand the business. Hence, if you have a well-defined plan but are lacking with money, an SME loan can help you grow your business. With this amount, you can increase the staff, inventory, and purchase new machinery.
The backbone of any business is its infrastructure. It varies from business to business. You can use the funds from the loan to get an additional space to store inventory or to move to a bigger office. As your business grows, infrastructure will be a primary need and a small business loan will help you fulfill the same.
Having adequate inventory is important if you are running a small business. You will be able to meet the demands of a consumer only if you have sufficient inventory. Loans for small business can help you meet your needs related to inventory. In addition, you can increase the production, which will eventually lead to an increase in the business.
With a small business loan , you can suitable human resources for your business. The productivity of the business will increase if you hire qualified specialists and pay them a higher salary.
Every business requires working capital to maintain the operations. Sometimes, you come across a down phase in the business due to many reasons and this is when an SME loan will help you. You can use the loan to cover the operational expenses and ensure that you do not have to pay for the same from your pocket.
With an SME loan, you can manage to grow your business by building a website and allocating more funds to the marketing activities. You need to do online, as well as, offline marketing to get more leads and acquire more clients in order to take your business to the next level.
It is important to carefully decide where you want to utilize the money and examine the choices that you have. When you know the purpose of borrowing, you can borrow the right amount and use it in the most appropriate manner. Once you know the amount of money you need in the business, you can approach the right lenders and take your business to greater heights.
Every size and type of business requires funds to operate. Whether the founders pool money or they raise funds from financial institutions, no business can sustain without adequate capital. The capital requirements also vary according to the size of the business. There are many types of business loans available for business owners. Business loans can be categorized into short-term, long-term, secured, and unsecured. Long-term loans, as the name suggests is a loan with a longer tenure and a short-term loan has a short duration. A secured loan is a loan, which has a collateral requirement and an unsecured loan has no such requirement.
However, when it comes to a loan for business, there are two main types—professional loan and trade loan.
Designed for self-employed individuals like lawyers, chartered accounts, and doctors, professional loans allow individuals to start or run their business. Such loans have a certain limit on the amount of funds that can be extended to the borrower. They are usually long-term in duration with a payback tenure ranging between five to seven years. The documentation required for this loan will vary depending on the lender.
A trade loan is designed to meet the needs of every size and type of business. The loan can be divided into three types—overdraft, term loan, and working capital loan.
An overdraft loan is based on some securities in bank fixed deposits. Depending on your credit history, repayment history, cash flow, and relationship with the bank, the lender will take an approval for a specific overdraft limit. After approval, the overdraft amount can be used and the interest is supposed to be paid to the bank only on the amount you used. You can use the funds as per your requirements. However, you need to pay the interest and principal amount on time.
This loan is provided to your business as working capital and is issued against collateral. It has a lower interest rate as compared to overdrafts and the interest will be charged on the amount utilized by you. In this type of borrowing, you can utilize the money only to manage the daily operational requirements of the business and not for any other reason. This form of business finance will give control to the lender to monitor your cash flow, debtors, inventory, and receivables, among other aspects involved in business operations.
This is a standard and very popular option when it comes to loans for small business. It can be availed for personal, as well as, business purposes, and the total amount will have to be repaid over the tenure in Equated Monthly Installments (EMIs). Term loans can also be taken in a foreign currency and hence they are known as foreign currency loans.
Consider the purpose of borrowing and then decide on the type of loan you require. You will have to submit the requisite documents and ensure timely repayment of the loan in order to maintain a positive credit history. Business loans allow entrepreneurs like you to take their business towards progress without worrying about the lack of funds.
When planning for your financial goals, it is important to align them with a strong financial plan. To help meet these goals, you can invest your savings in reliable and rewarding avenues such as Fixed Deposits (FDs).
FDs, or term deposits, are a crucial component of any well-balanced portfolio. They are secure investment instruments that offer guaranteed returns.
In this scheme, you deposit a certain sum of money for a fixed time period at a pre-determined rate of interest. The timeline for this could range from a few weeks to a few years.
If you are looking to find the best FD scheme, and get the maximum returns out of your investment, here are a few things you need to keep in mind.
Interest rate:
Different lenders offer different fixed deposit interest rates Before investing in a fixed deposit, it would be wise to scout for the best interest rate available in the market.
Tenure:
The tenure on an FD ranges from 7 days to 10 years. Generally, the interest rate you are offered will depend on the term you choose. As such, longer deposits are likely to earn a higher rate of interest.
Lender’s credibility:
Before finalising your FD details, it is important to verify the lender’s credibility and standing. Agencies such as India Ratings & Research (Ind-Ra), Credit Rating Information Services of India Limited (CRISIL), Credit Rating Agency of India Limited (ICRA) and Credit Analysis and Research and Investment (CARE) provide a reliable reading of the lender’s credit rating.
Payouts:
Depending on whether you want periodic returns or interest at maturity, you can opt between cumulative and non-cumulative FDs. In non-cumulative FDs, payouts can be made on a monthly, quarterly, semi-annual or even annual basis. In cumulative FDs, the interest is compounded and a payout is made at maturity, on completion of the tenure. As such, these FDs offer you higher interest payouts.
Early exit charges:
Fixed deposits come with a lock-in period, which means you cannot withdraw the money prematurely, before the term ends. However, if you do so, there could be a penalty to pay. While choosing an FD, find out the price you may have to pay for its early liquidation.
Senior citizen benefit:
Senior citizens usually receive better rates of interest for FDs. Usually, the interest rate offered to them is 1% more than usual. If you’re a senior citizen, you should find an FD that offers you the best rate.
Simple process:
Lastly, when selecting a lender, ensure their application process matches your preferences. Nowadays, people generally prefer a simple online process, with minimal steps and documentation.
With assured returns and zero volatility, FDs have become attractive investment avenues for investors. When looking for the best fixed deposit schemesin the market, it is important that you keep the aforementioned points in mind.
By making the most out of your investments, you can plan a worry-free future for the family.
Depositing additional funds are always welcomed by any bank, but, you as a customer are always muddled whether to store it in a Savings Account or a Fixed Deposit (FD) account. A head-on comparison between the two will reveal that the interest rates are higher on the FD side, which successfully culminates into a good return on investment (ROI).
You may also opt for mutual funds or shares; however, these are risky. A safer option that provides decent returns includes fixed deposits (FDs).
Here are six reasons to open FDs.
Compared to shares or mutual fund schemes, FDs are safer. Furthermore, such deposits are rated by credit rating agencies like India Ratings & Research (Ind-Ra), Such ratings ensure your funds are safe and there is no risk of losing your capital.
Compared to a bank savings account, the fixed deposit interest rates are higher. In addition, financial institutions offer a greater rate for senior citizens when they open an FD. Therefore, you will be able to earn more on your capital.
You may invest as low as INR 5,000 while opening an FD. In addition, you may choose a cumulative or non-cumulative option. When you choose cumulative FD, the interest is paid on maturity. On the contrary, non-cumulative FDs provide regular interest payments and are beneficial to earn periodic income.
When you open an FD, you must choose the duration of the deposit. At the end of this period, you will receive your capital along with the interest. Moreover, most financial institutions allow you to withdraw your funds prior to the end of the deposit period. However, according to the Reserve Bank of India (RBI) rules, you are not allowed to withdraw your money within three months of opening the FD. In the case of premature withdrawal, the effective fixed deposit rates may reduce because you do not hold the FD until maturity.
You may avail of a loan facility against your FDs. Financial institutions offer up to 75% of the deposit amount as a loan after three months of opening the FD. The interest rate on such loans is affordable, thereby ensuring you do not face any difficulties in repaying the borrowed amount.
Some FDs provide tax benefits. Usually, when you opt for a tax saving deposit, you will have to hold the FD for at least five years. You are unable to withdraw the money before the end of this period. Furthermore, loans are also not available on tax saving deposits. When you opt for these deposits, the capital invested up to INR 1.5 lakh is exempt from income tax under Section 80C of the Income Tax (IT) Act, 1961.
Several banks and non-banking financial companies (NBFCs) offer such time deposits. It is advisable you check the interest rates offered by different financial institutions to maximize your returns. FDs have been popular among Indians who want to invest their money in a safe financial instrument. Such deposits are regulated by strict laws and offer assurance to investors like you. Investing in FDs is advisable if you want to increase your income through another source.
One of safest and most sought-after investment instruments in the market today, Fixed Deposits (FDs) offer guaranteed returns, while also helping you meet your financial goals.
FDs can be categorised as cumulative and non-cumulative. In each form, the interest is payable at specified frequencies.
Cumulative
In a cumulative fixed deposit scheme, the interest amount is compounded over the term of the deposit and paid at maturity. Longer deposits generally earn higher FD rates.
For instance, if you invest Rs. 1,00,000 in an FD with a bank at a 10% rate of interest for 1 year, you would receive Rs. 1,10,000, which is the principal amount plus the interest earned, at the end of the year.
Non-Cumulative
On the other hand, in a non-cumulative scheme, the interest amount is payable on a monthly, quarterly, semi-annual or annual basis.
Let’s say you place another FD with the bank. Only this time, you choose the non-cumulative interest option. Here, you get to choose the frequency of your periodic payments – be it monthly, quarterly or annually.
This means that if you’ve made a deposit of Rs. 1,00,000 at a rate of interest of 10% for 1 year, coupled with quarterly payouts, you will receive Rs. 2,500 each quarter.
Different lenders offer different fixed deposit interest rates. Depending on your requirements and future financial goals, you can opt between a cumulative and non-cumulative FD of your choice. The only point of differentiation between the two is the periodicity of interest payments. While cumulative schemes offer a single outgo of interest, non-cumulative schemes offer periodic interest payments.
How to Choose Between the Two
Salaried individuals, or small business owners, who don’t necessarily need any added income to meet their monthly expenses can easily opt for a cumulative FD. By saving a larger amount, the corpus built using a cumulative scheme can also help meet long-term financial goals.
For retired individuals and pensioners, who don’t have a steady source of income, non-cumulative FDs are a better bet. They provide periodic payments on a regular basis, allowing such individuals to better plan their day-to-day and monthly expenses.
Irrespective of which section of society you belong to, an FD, can help you build a better corpus for the future. In fact, they are the most preferred form of investment to help individuals meet their long-term financial goals.
Learn more about fixed deposit .
The best way to build your wealth is to invest wisely. As a part of this financial exercise, you can keep some portion of your savings in Fixed Deposits (FDs). These secure investment instruments offer assured returns at an attractive rate of interest.
Moreover, they offer multiple benefits such as flexible tenure, easy online application and a high safety rating. Depending on your risk appetite and goals, you can also leverage a fixed deposit by taking a loan against it.
Here below are five sturdy reasons as to why you should invest in an FD:
Safe and Secure
Most market-linked instruments are volatile, and are easily affected by the current economic scenario. However, such is not the case with FDs. When you invest in an FD, your principal amount and accumulated interest, are both secure despite fluctuating market conditions.
Guaranteed Returns
When you put money in an FD, you know exactly how much you are going to earn through the term, or at maturity. With the assured principal and accumulated interest on hand, you can better plan for your longer-term financial goals.
Easy Liquidity
In case of an emergency, you can easily withdraw the money from your FD before maturity. In such cases, a penalty may be levied for breaking the deposit, but all in all, the process is quite simple. Most importantly, this facility helps dispense funds during a financial crisis or time of difficulty.
Flexible Tenure & Payouts
FDs offer full flexibility with regard to the term of investment. It could range from 7 days to 10 years. An investor can select any time-period that suits his needs. Further, FDs let you choose between cumulative and non-cumulative interest rates.
While non-cumulative FDs offer periodic payments on a monthly, quarterly, semi-annual or annual basis, cumulative FDs give you compounded interest at maturity.
Loan Against FD
If you hold an FD, you can also use it to leverage a loan when you need one. Usually, you can avail a loan up to 70% of the FD amount, that too at a competitive rate of interest.
In this day and age, a fixed deposit scheme is a safe and secure avenue to invest your savings. With assured returns and zero volatility, you can continue to build your wealth and create a sizeable corpus for your family.
If you’re searching for the best FD rates in the market, be sure to check out the Mahindra Finance fixed deposit. It offers the most competitive rates along with a bucket of future benefits.
In India, fixed or time deposits have been popular for many years. One reason is that these products are a safe investment option. In addition, these deposits offer a higher rate of interest when compared to a savings bank account.
Before you decide to invest in such deposits, it is important to debunk some myths. Here are five common myths related to these deposits that you must stop believing.
This is one of the most widespread myths about fixed deposits (FDs). However, the fact is that even non-banking financial companies (NBFCs) offer such deposits. Generally, NBFCs offer a higher rate of interest on FDs. You may also enjoy different tenure options and flexible repayment schedules. FDs offered by NBFCs are secured as these are rated by credit rating agencies like Credit Rating Information Services of India Limited (CRISIL).
Interest earned on FDs is taxable at your income tax slab rate. The returns you earn is added to your total annual income under the heading ‘Income from Other Sources’. However, if the interest earned through FDs is not more than INR 10,000 during the entire financial year, there is no Tax Deducted at Source (TDS) implication.
There are certain types of tax saving FDs that offer income tax benefits. You need to remember that when you opt for such tax saving deposits, you will need to lock your money for at least five years. The tax benefits are available under Section 80C of the Income Tax (IT) Act, 1961.
The fixed deposit interest rates are pre-determined. You may choose to receive the income at periodic intervals or opt for the cumulative option. With regular payouts of the interest income, you earn less because there is no compounding. Compounding means that you are able to earn an additional income on the interest that is reinvested in the FD. It is recommended you opt for the cumulative FDs and receive the interest income at the time of maturity.
You may consider taking out your money from the FD before its maturity date to meet emergency cash requirements. However, this reduces the FD interest rates and delivers a lower return on your investment. Often, the financial institutions levy a penalty on premature withdrawal. It is advisable to opt for either a loan against the FD or an overdraft to meet immediate cash requirements. Most financial companies offer such facilities.
Opening an FD is quick and simple. You may invest as low as INR 5,000 in these financial products. Moreover, minimal documents are needed for opening an FD, such as photo identity and residential proof. You need to issue a cheque or a demand draft for the FD amount at the time of opening a deposit. You may also include two joint holders while opening the FD.
FDs have been popular for several years and the above-mentioned myths often prevent individuals from investing in these products. Get your facts right and invest in FDs, the safest investment product today.
Fixed or time deposits are a common and popular investment option in India. These deposits provide interest higher than a regular savings account and are less risky than other investment options like shares.
You may open a time deposit account without any inconvenience with minimal documentation. However, premature withdrawal before the due date results in the payment of a penalty. If you want to invest in high-interest deposits, here are seven tips to keep in mind:
Different institutions offer varied interest rates on fixed deposits (FDs). It is recommended you check with various institutions to know the best rate available for your required tenure.
Based on the capital you want to invest, it is recommended you split the same among multiple FD schemes. Therefore, in case you require emergency funds, you may withdraw from one deposit while the balance deposits continue to earn returns.
The financial institutions link the interest rates to the repo rate. This means the FD rates may fluctuate during the tenure. This fluctuation may be countered by including multiple FDs with different tenures.
The returns earned on your FD investments are liable to the tax based on your income slab. It is important that you determine the tax liability before you invest in high-interest fixed deposit schemes.
Several tax-saving FDs are available, which have a lock-in period of five years. However, you are not allowed to make any withdrawal before its maturity date. Therefore, if you want the flexibility to break your fixed deposit prior to the end of its tenure, it is recommended you do not invest in tax-saving FDs.
In most cases, if you withdraw the money from an FD before its due date, you may have to pay a penalty. Financial institutions may allow you partial or premature withdrawal to meet emergency fund requirements before maturity by levying a penalty. The total interest may also be affected in such cases.
When you opt for this option, the interest is reinvested to your FD account. This allows you to earn higher returns through reinvestment. It is recommended you opt for this choice if you want to benefit from capital appreciation over the long-term.
FDs have been a popular investment option for decades. The low-risk and convenience of opening an account with the opportunity to earn good returns make these a popular financial choice.
Time deposits are risk-free investments that also offer the opportunity to earn good returns. Therefore, such deposits have been widely used by Indians since decades to earn a regular income and build wealth over the long-term.
It is important that you have the accurate information related to such investments to ensure you have a positive experience. Here are four common myths associated with time deposits that are busted:
When compared to banks, company fixed deposits (FDs) offer a higher rate of interest. You may consider these riskier; however, this is a common myth. You may compare the ratings for the company FDs issued by leading credit agencies. Mahindra Finance fixed deposits enjoy good ratings ensuring their reliability and stability.
Company FDs interest rates are guaranteed and remain unaffected by market rates. Moreover, senior investors may enjoy a higher rate of interest, which makes these a good investment option.
This is true only if the income in the financial year exceeds INR 5,000. This limit increases to INR 50,000 if you are a senior investor. Moreover, if you do not have other income sources or your total income is less than the minimum tax bracket, you do not have to pay taxes on FD income. To ensure that tax deducted at source (TDS) is not applicable, you must submit Form 15G or 15H.
Non-cumulative fixed deposit schemes allow you to choose the frequency of the interest payments. If you choose a monthly payment, it does not mean that your income will be higher. The financial institutions calculate the annual FD rates and these are then divided in equal installments based on your chosen payment frequency.
The interest rates on cumulative FDs are often lower when compared to non-cumulative deposits. The interest earned on your initial investment is reinvested when you opt for a non-cumulative FD. Therefore, such interest reinvestment provides the opportunity to build a good corpus in the long-term.
If you need to break the fixed deposit before maturity, the procedure is simple and quick. However, the institution may levy a premature withdrawal penalty and it is recommended you check this before breaking the FD.
When you invest in an FD, you will receive the principal investment along with the interest on the maturity date. However, the premature withdrawal amount will be deducted from the maturity proceeds. You may also avail of a loan against your FDs. All these features and benefits make FDs a popular investment option.
Fixed or time deposits are one of the most popular and oldest investment options. Compared to a regular savings or current bank account, the rate of interest on such deposits is higher.
Time deposits are recommended to mitigate the overall investment risk of your portfolio and counter the high-risk investment options like equities and mutual funds. Additionally, such deposits may be used to increase your income through regular interest payouts, which ensures you do not have any financial difficulties.
Here are five reasons why you must choose to invest in fixed deposits (FDs):
When you invest in stocks or equity-related mutual funds, the returns are linked to the overall performance of the markets. On the other hand, time deposits provide assured returns because the fixed deposit interest rates are pre-determined. FDs are risk-free investments. When you invest in FDs, you do not have to worry about market fluctuations. You need not focus on timing the markets. This allows you to concentrate on your job or business while earning good returns on your investments.
Compared to other fixed-income securities such as government bonds or treasury bills, the rate of interest offered by institutions on the FDs is higher. Additionally, the fixed deposit rates are higher compared to other types of bank accounts. Therefore, you have the opportunity to earn better returns with no risk.
Financial institutions offer different investment tenures when you choose to invest in FDs. You may choose as less as seven days to as long as ten years based on your preferred investment horizon. The FD rates vary for different durations, which make these very versatile.
Most lenders allow you to borrow funds against your FD holdings. Additionally, you may procure an overdraft facility against these investments.
Generally, a fixed deposit comes with a pre-determined maturity date. However, financial institutions allow you to liquidate your holdings before the due date albeit at a penalty. Therefore, contrary to common perception, FDs are liquid investments.
When you invest in five-year time deposits, your investment is eligible for tax benefits under section 80C of the Income Tax Act. Therefore, you can reduce your tax liability through such investments.
Often, some people argue that you are able to earn higher returns in products like mutual funds, derivatives, or shares. However, these are high-risk investments with the possibility of losing your entire capital. It is recommended that if you do not have a high-risk tolerance, investing surplus funds in FDs is a better option.
An ideal way to kickstart your investment portfolio is through a fixed deposit (FD). It is not only risk-free and easy to comprehend, but also helps you in growing your wealth. In an FD, your money is held for a specific tenure and you earn interest on it until the date of maturity. FD interest rates are higher than the rates that are offered in savings accounts, which is also a reason why FDs are very popular. The pros and cons of investing in an FD are discussed below.
Pros of investing in FDs
FDs are considered as an ideal way to start saving money for the future. Its benefits are discussed below.
FDs are not associated with market movement; hence, there is low risk. FDs provide guaranteed returns and are a preferred choice for individuals who have a low-risk appetite.
An FD scheme has a minimum tenure of six months and a maximum duration of five years. This means your money will be safeguarded and you will earn returns on it.
If you are in an emergency and need funds, you can simply take a loan against the FD without breaking your FD prematurely.
In an FD, you can select the desired term. Moreover, you can decide when the interest amount is credited to your FD account. You can choose between monthly, yearly, and at-maturity interest rate payout options. The fixed deposit interest rates offered are higher for senior citizens.
Cons of investing in FDs
FDs do have certain disadvantages, which also need to be considered. The cons of investing in an FD are discussed below.
The returns in an FD are guaranteed but the FD rates are low as compared to other market-linked investments.
If you withdraw the FD before its maturity date, you will have to pay a penalty charge. You could also get a low interest on your FD if you break it before the date of maturity.
The interest you earn on an FD will be a part of your taxable income. As per the Budget 2019, your interest earnings on FDs up to an amount of INR 40,000 will be exempted from tax. However, if you earn an interest income that is greater than INR 40,000 your income will be deducted by 10% Tax Deducted at Source (TDS). Hence, if you are looking for an investment option that provides complete tax exemption, then FDs are not the ideal alternative.
Many choose to invest in FDs over any other form of investment for the low risk and consistent return it generates. This is why it remains a favorite investment avenue for retired investors. The pros outweigh the cons when it comes to fixed deposits and if you are looking for a low-risk investment option, you must invest in an FD at the earliest.
The cost of living in the country is constantly increasing and Budget 2019 has offered positive signs for investors. The most important fixed deposit (FD) update is the removal of the traditional (Tax Deducted at Source) TDS deduction limit on FDs. This was a proposal by the Ministry of Finance, which has appealed to all the citizens of the country. In case of FDs, the interest earned up to an amount of INR 40,000 will be exempt from any TDS deduction starting this financial year. This is a major reform when it comes to FDs, as earlier the exempted amount was up to INR 10,000. It is this reason why you should consider FD as an investment this year.
Why is FD an attractive investment avenue?
The repo and reverse repo rate increased twice in 2018 and this meant stressful news for borrowers who had to go through an interest hike on their loan. However, it also meant good news for investors because banks, as well as, companies had to revise their fixed deposit interest rates. This hike was carried out to balance a rise in the cost of the loan. The rate hike has increased the faith of investors in FDs and has increased their investment significantly. This movement, which began in 2018, has turned highly significant with the TDS deduction nod in 2019.
The implementation of new tax slabs
As per the Interim Union Budget for 2019-20, there was a revision in the tax slabs for individuals and this meant that individuals earning an income up to INR 5 lakh in a year will remain exempted from tax. Further, those earning an income up to INR 6.5 lakh or more can claim deduction under certain sections and get a complete exemption from their taxable income. This means you can now allocate more funds towards FD investments to make the most of the new slabs.
You can now make the most of the FD interest rates and the tax slabs by making an investment in FDs right away. As per the external benchmark system, the FD interest rates will not see any more hikes and with the tax exemption for you, it is very likely that you will prefer high-interest FDs. You can make the most of FD rates in 2019 by opting for a reliable financial institution as compared to a bank. They offer lucrative interest rates and are an ideal place to put your money. If you are a current loan customer, you can also get an additional interest on the investment.
You can begin your investment with an amount as low as INR 5,000. You can choose from the different payout frequency options. There is a higher interest rate for senior citizens.
The above-mentioned factors ensure that FDs remain a preferred investment option for individuals across the country. Consider the income and align your goals to investments in FDs. In order to earn maximum returns, remain invested for a long period of time and ensure that you do not withdraw the FD before maturity.
In order to generate maximum returns out of an investment, it is essential to find the ideal fixed deposit (FD) scheme. There are a number of factors, which need to be considered before applying for an FD. Non-Banking Financial Companies (NBFCs)pay high FD rates as compared to banks. It is important to do some research before you put your money in an FD in India.
Factors to consider while choosing an FD
You need to keep the below-mentioned factors in mind when applying for an FD.
The most important factor to take into consideration is the FD interest rate. Choose a good deal by comparing the interest rates because it will make a huge difference to the returns generated on your investment.
Another factor to consider is the tenure. If you want to earn maximum return from your investment, you need to remain invested until the maturity period. Hence, choose the tenure wisely.
After comparing the FD rates in India, you will have to decide on the payout option. Consider the period when you would like to receive the interest. It could be monthly, quarterly, annually or half yearly.
Before you put your money in an FD, you need to check the penalty rate in case you want to break the deposit prematurely.
How to choose a good FD scheme
In order to select the most suitable company FD scheme, you need to follow certain below-mentioned steps to ensure that you make the correct choice.
FDs are considered as a traditional and secure investment option. They are low risk and generate consistent returns in the form of interest. Before you invest your money in an FD, understand the terms and conditions of the same. Make a wise choice and do not be simply driven by the rate of interest.
You do not need a complex solution to achieve success in business. Success comes from mastering the fundamentals of the business and understanding the point of view of the consumers. In order to run a successful business, you only need to address the need of the customers in a manner, which is better than the competitors. An analysis of the drivers of progress for small businesses signifies that there is a basic success formula for every type of business. If you can get the basics right, you will be able to take your business to greater heights of success and prosperity.
How to make your small business successful
Listed below are a few success formulas that you should follow in order to make your business flourish.
If you look at the customer perspective in terms of value equation, it comes down to benefit minus the cost. Many businesses are not aware of what could make their customer happy and they try to fit their customer to a product instead of identifying which product would fit the customer. To run a successful small business, you need to keep the customer at the forefront and then fit your product as per their needs.
Every customer is different and every customer is important for the business. Hence, you need to identify the customer you are targeting and then create a product or a solution for the target audience. If you try to be an ‘all things to all people’ business organization, it will benefit neither the customers nor your business.
After you have learned the value equation for your customers, you need to focus on finding many more customers who have similar product requirements. Many businesses try to scale the business before they have created a product. Loans for small business can help you achieve your marketing objectives in order to reach out to a wider consumer base. An SME loan is specially designed for small businesses and it serves multiple purposes.
The business model is crucial for achieving success. You need to build a business model, which grows the business and generates a high return on investment. However, you will not accomplish your business goals just by creating a business model. You also need to focus on the execution aspect. Build a team that believes in the business and will help you with the execution of the business model. When you build a business model, do not miss the basic steps and keep your audience at the forefront. If funds are a problem, you can apply for a business loan from a Non-Banking Financial Company (NBFC) and expand the business.
Nobody said running a business was easy but it is not complex either. With financial institutions offering small business loans at lucrative interest rates, it has become easier to establish and manage a small business. If you take the right steps and understand the perspective of the customers, you will be able to make your business successful in a short span of time.
No matter what stage of life you are in, investing is a financially-prudent habit to cultivate. Financial investment entails making decisions like when to buy stocks, when to invest in FDs, the best time to invest in mutual funds and the best mutual funds to invest in. These decisions will vary depending on where you are in life. For young investors, it is the best time to buy shares and equity mutual funds. For older investors with more financial responsibilities, a balance between debt and equity funds can help meet their financial needs. In this blog, we will outline the best mutual funds to invest in depending upon your life stage.
What is Life-Stage Financial Planning?
Life-stage financial planning refers to planning your financial investments depending upon the stage of life you are in. Some of the major factors that impact your financial decision while life-stage planning are:
When done right, life-stage financial planning can help you with wealth accumulation and wealth creation.
Best Mutual Funds to Invest in Depending Upon Your Life Stage
Broadly, an individual’s investment journey can be categorized into four life stages:
1.Start of Your CareerIdeally, you should start investing with your first salary. Getting a head-start on your investment journey can help you meet your financial goals with ease. At the start of you career, you have fewer responsibilities and can save more. Goals are usually short-to-medium term like taking a vacation, saving for higher studies or buying a car. Since you have age on your side and flexibility to save and invest, this is the best time to buy stocks. It is also the best time to invest in mutual funds that are equity-based because you have time stomach volatility.
2.Partnership or Marriage The next stage of life is when you get into a committed partnership. This will involve more financial responsibilities and shared financial goals. It could involve medium-to-long term goals like saving for a house and for parenthood. The ability to take risks will reduce a little. This is the best time to invest in mutual funds that provide a balance between stable returns as well as wealth generation. Hybrid mutual funds, dynamic asset allocation funds and even large-cap equity funds can be a good investment at this life stage.
3.ParenthoodWhen you become a parent, your financial responsibilities and commitments will take a complete turn. Apart from meeting the present needs of your child, you will also need to plan their education, marriage and other long-term goals. The best mutual funds to invest in at this life-stage are ones that will give you stable, long-term returns. Consider diversifying your investment among large-cap funds, multi-cap funds and some debt funds for stability.
4.RetirementThe final financial life cycle is the time of retirement. This is when you need regular income and need to minimize your risks. This is the best time to invest in mutual funds that provide regular income like dividend funds. Low-risk mutual funds like overnight funds, liquid funds and other debt funds should be your other go-to options. Now may not be the best time to take a bet on shares.
TakeawayPlanning your financial investments according to your life stage can give you more clarity about the best mutual funds to invest in. The best time to invest in mutual funds is as soon as you can. This will ensure that you meet all your goals comfortably, without much hassle. If you are looking for a portal that gives you clarity and details about the best mutual funds to invest in, choose Mahindra Finance Investment Solutions Portal, a safe and online platform for your investment needs.
SIPs are a tool that can help you invest a specific amount regularly in mutual funds over a period of time. Here are top 5 reasons to start an SIP now!
An SIP is one of the most popular forms of mutual fund investments today. SIPs promise very good returns on your investment, and help you accumulate wealth in the long run. Since an SIP is subject to market conditions, investing in the right stocks can do wonders for your financial growth.
Five Reasons to Start an SIP Right Now
Investment doesn’t have to be tricky. You may have heard of equities and bonds and exchange-traded funds. However, one of the best instruments to begin your investment journey with is a Systematic Investment Plan or an SIP.
SIPs are a tool that can help you invest a specific amount regularly in mutual funds over a period of time. With more than 2,500 mutual funds to choose from, to start an SIP can be a great way to inculcate an investment habit and amass wealth over the long term. It can help you meet long-term goals as well as fund short-term plans like a vacation. Before you start an SIP, know more about why SIPs are so great!
Here are the top advantages of an SIP you should know:
1.Best way to inculcate a savings habit
If you want to start an investing habit, opening an SIP account is one of the best routes to take. You can start an SIP online with as little as Rs. 500 in a scheme. It is easy to set an auto-debit option from your bank account, wherein a fixed sum is invested in a mutual fund of your choice on a regular basis. Putting your investment on auto mode with your bank will make sure that you save without any lapses.
2.The power of compounding returns
One of the biggest reasons why you should start an SIP is the power it has to multiply your money over time. Your money is invested in the market through mutual funds, thereby making it possible to generate higher returns. The returns on mutual funds are usually higher than the returns you get from a fixed deposit or the interest you earn on savings bank accounts. This is one of the greatest advantages of an SIP.
3.No need to time the market
For first-time investors, investing in the stock market can be tricky. You may not have the expertise to follow company performance and invest in high-performing stocks. By investing in mutual funds through SIPs, you eliminate the need to time the market. Also, since you invest over a period of time, rather than a lump sum mutual fund purchase, the overall cost of purchase is also averaged out. This is called rupee-cost averaging. If an SIP is purchased when markets are performing well in one month, you may get fewer units. But on the flip side, when markets fall, you get more units. Hence, when you start an SIP, the costs are evened out.
4.Naturally-diversified investment
A thumb rule of smart investing is to never put all your eggs in one basket. Another is to invest at different points in time for different goals. When you start an SIP online, you can do all of this. When you open an SIP account, you can put your money in different stocks, bonds, gold, indices or even commodities. One of the biggest advantages of an SIP is that SIP investments are naturally-diversified, thereby providing you good returns over the long term.
5.Helps with goal-based investing
SIPs are an excellent tool when you have an end goal in mind. Let’s suppose you want to buy your dream home 10 years from now. You have an estimated budget in mind. Many fund houses and online portals will help you calculate how much money you need to invest periodically to reach that goal amount. When you start an SIP online, you can save for a down payment or even complete payment to purchase your home.
Takeaway
SIPs are one of the most investor-friendly financial instruments in the market. Their benefits are numerous, from low and convenient investments to goal-based and disciplined investing. Through SIPs, you can amass good wealth over the long term. It’s definitely an instrument worth having in your financial portfolio.
With Mahindra Finance, you have the opportunity to start an SIP online from the comfort of your home, with the help of our top asset managers! Open an SIP account and reap the long term benefits of an SIP investment!
Why invest in mutual funds? A brief overview of what are Mutual Funds and Their Benefits
Why invest in mutual funds? Here’s a brief overview of what they are, different types of good mutual funds and benefits of investing in good mutual funds.
Mutual funds are one of the most popular forms of investments today. Millions of people across the globe depend on good mutual funds to grow and diversify their wealth. If you’re new to investing, but want to grow your portfolio, simply contact an asset manager at a leading Investment Solutions company such as Mahindra Finance who can invest in mutual funds on your behalf, thus increasing your chances of making more money. Know more about mutual funds, what they are, what are the different types of mutual funds, and why invest in mutual funds for the future.
What are mutual funds?
To understand why invest in mutual funds, you should know, what are mutual funds? A mutual fund is like a shared or common pool of wealth, in which many investors put in their money, which is then invested in assets that the investment deems as its primary objective. Mutual funds can be invested in securities, gold, real estate assets, stock markets, bond markets or other money market instruments present in the country. Fund managers manage these investments with an objective to grow this wealth, thereby benefiting all the people who pooled their money in the first place.
Some examples of the top mutual funds include HDFC mutual fund, SBI mutual fund, ICICI, Motilal Oswal, Axis, IDBI and Tata Mutual Funds among others.
If you’re wondering which are some good mutual funds to invest in, simply contact an asset manager at a leading Investment solutions company such as Mahindra Finance to begin with!
How do investors make money through mutual funds?
These are some ways through which you can make money through mutual funds.
What are the benefits of mutual funds?
As you can see, there are so many wonderful reasons why invest in good mutual funds. At Mahindra Finance, we offer a wide range of investment options that are fully supported by our end to end digital capabilities. You can invest in several good mutual funds right from the comfort of your home, and leave the rest to our expert asset managers. So, the next time you’re wondering why invest in mutual funds, just get mutual with Mahindra Finance Investment Solutions!
What are systematic investment plans or SIP schemes? Here’s a brief overview of what they are, different types of SIP funds and benefits of investing in SIPs
SIP schemes are one of the most popular forms of investments today. SIPs have many benefits that help you invest your money in a time bound and disciplined way to help maximize your wealth in the long run. If you’re new to SIPs, don’t worry. There are several top financial services companies such as Mahindra Finance who’s expert asset managers invest on your behalf and thereby manage and diversify your portfolio. Know more about what a SIP plan is and the benefits of investing in SIPs.
What are SIPs?
What is an SIP plan or Systematic Investment Plan? It is an investment opportunity that is offered by mutual funds, to help investors invest money in a time bound and disciplined manner. An SIP allows an investor to invest money in predefined intervals in any particular mutual fund scheme. There is flexibility in how much you can invest and the time intervals as well. You can invest as low as Rs.500 on a weekly, monthly, quarterly or yearly basis. The choice is yours. SIP schemes are popular mutual funds because they are less susceptible to market risks. Since the investment is time bound, SIP performance is less affected by market fluctuations, and through the power of compounding and average costing, you get the best SIP returns in the long run.
How does an SIP work?
Now that you know what is an SIP plan, let's find out how an SIP scheme works. Before we answer this question, it's important to understand the difference between a regular fixed deposit investment and an SIP. A fixed deposit account will help generate good returns on investment, but won't help you generate wealth in the long term. An FD is not subject to market forces whereas SIP schemes are. Which means that if you invest in the right mutual funds and top SIP plans, your SIP performance will improve and you can see your wealth grow significantly in the long run.
Some of the best SIP mutual funds in the market include Axis bluechip fund, DSP equity fund, Franklin India focused equity fund, ICICI Prudential blue chip fund, Nippon India large cap fund etc.
Why invest in SIPs?
Hope you have completely understood what is an SIP plan! These are just some of the reasons why you should invest in top SIP schemes. If you’re wondering why ‘mutual funds sahi hai’, look no further than an SIP fund!
At Mahindra Finance, we offer expertise to help you choose the top SIP schemes, where we invest your money in high performing assets, to help increase your wealth! You can contact an asset manager at Mahindra Finance, who will take the time to find the perfect investment opportunity for you. Now, with our digitally enabled SIP solutions, you can start investing right from your home with the tap of the finger!
Want to know more about the different types of equity funds and stocks you should invest in? Here’s a detailed guide to get you started on your journey!
If you lack the market knowledge to go about investing in stocks and expanding your portfolio, investing in equity mutual funds is a great place to start. Top investment solution provider companies such as Mahindra Finance Investment Solutions can help you invest on your behalf, and ensure that your wealth increases in the future. You can invest in several different types of equity funds based on different parameters that will provide you with rich gains in the long run.
Know Your Stocks: The Types Equity Funds Invest In
Investing in equity mutual funds is a great go-to investment strategy for those who want to multiply their money but don’t have enough market knowledge to invest in stocks themselves. However, have you ever wondered what type of equity funds invest in?
Company stocks can be classified into different categories based on market capitalization, risk, dividend payment and price trends. Fund managers choose which types of equity funds to invest in depending upon the investment strategy they follow.
Here’s what you need to know about the different types of stocks:
1.Stocks categorized based on market capitalization
Market capitalization is the total shareholding of a company outstanding in the market. It is the current market price of the share multiplied by the total number of outstanding shares. Based on this, equity stocks can be classified into:
The Securities and Exchange Board of India (SEBI), the regulatory body for the stock market, defines large cap companies as the top 100 stocks according to market capitalization. Usually, their market cap runs into trillions of rupees. Shares of Infosys Ltd., Reliance Industries, TCS, etc. are some examples of the best large-cap stocks. Large-Cap Equity Mutual Funds invest predominantly in large-cap stocks.
According to SEBI, all companies that rank from 101 to 250 in terms of market cap are mid-cap companies. Some examples of this type of equity fund are Relaxo Footwears, Trent, Sundaram Fasteners, etc. Mid-Cap equity funds invest predominantly in mid-sized companies with profitable stocks.
All companies that rank 251 and below based on market cap are small-cap companies. These companies have growth potential and can give investors high returns, but risks are also high. Some examples of small cap equity funds include Bajaj Consumer Care, Delta Corp Ltd., NESCO Ltd., etc.
You can find a list of small cap equity funds on the Association of Mutual Funds in India (AMFI) website.
2.Based on Risk
SIP schemes help in inculcating financial discipline and are extremely convenient. Since money is deducted at a specific date in a timely manner, it's an excellent investment option for people who need something systematic.
SIP schemes are great for individuals who don't have much money to begin with either. Whether it be for millennials fresh in the workforce or experienced professionals, an SIP works for both. You can start an SIP with as low as Rs. 500 per month. It's important to know where to invest to get the best SIP returns.
3.Based on payouts
Depending on how a company uses its earnings, stocks can be classified into:
Some companies pay regular dividends to shareholders. These stocks are called dividend-paying or income-yielding stocks. Equity funds that are geared towards providing regular income to their investors invest in these types of equity funds. Examples of income stocks include TCS, ITC Ltd., Wipro, etc.
Contrary to income stocks, growth stocks do not pay dividends. Instead, they reinvest earnings in the company for further growth. Funds that are looking to create wealth appreciation for investors invest in the best growth stocks. Examples of such profitable stocks include Bajaj Finance, Britannia Industries, Minda Industries, etc.
4.Based on price trends
Stock prices are dependent on the market and economic conditions. Some respond directly to the economic environment while others may not. Based on this, stocks can be classified into:
Some companies’ share prices fluctuate depending upon the economic environment of the country and the world. An economic boom tends to increase their prices and a drop deflates prices. Such company stocks are called cyclical stocks. Airline companies and automobile companies are the most common cyclical stocks. Funds looking for diversification benefits invest in these cyclical stocks.
Economic conditions do not affect defensive stocks. Instead, defensive stocks provide stability, especially in times of a crash. Funds invest in these defensive stocks for stability of a portfolio. FMCG stocks, pharmaceuticals or insurance stocks are often considered defensive stocks.
Economic conditions do not affect defensive stocks. Instead, defensive stocks provide stability, especially in times of a crash. Funds invest in these defensive stocks for stability of a portfolio. FMCG stocks, pharmaceuticals or insurance stocks are often considered defensive stocks.
The Final Word
Once you know the different types of equity funds invest in, you can understand a fund’s investment strategy better. Knowing the different kinds of stocks to invest in can help you make a more informed investment decision. As an investor, your aim should be to diversify your investments and make the highest returns possible. At Mahindra Finance Investment Solutions, we help you make the right investment by investing in a variety of profitable stocks!
Invest smartly, only with Mahindra Finance Investment Solutions!
Mutual Funds may sound complicated but are easy to understand. It's a lucrative platform where you can safely invest your money. Let us dive into its basics and discuss numerous Mutual Fund Instruments to help you invest in mutual funds.
What is a Mutual Fund?
Doing away with the technical jargon, let us consider this simple example: You have surplus money, but you have no idea where or how to use it. So, you appoint an expert who knows about money matters. This expert takes your money and invests them proportionately in various shares, bonds and fixed deposits. The expert accumulates the income (interest or income) earned from these various investments, and after deducting some charges, the expert gives the income to you.
Here, you are the investor. The expert, who pools and manages your money, is a Mutual Fund. And since your money gets invested in numerous 'baskets', the risk is relatively less than investing in only one form.
Mutual Fund acts as an intermediary. It is a financial company that collects money from persons desirous of investing. The money is then invested as a diversified portfolio in the form of equity shares, debentures and other kinds of financial securities. The money invested is represented by units. So you hold your investment in terms of units. The income or returns accrued by such Mutual Fund companies is distributed evenly amongst the investors after deducting certain charges by calculating an instrument's 'Net Asset Value' or NAV.
You can invest in mutual funds like Canara Robeco Mutual Fund, DSP Mutual Fund, Aditya Birla Sun Life Mutual Fund, SBI Bluechip Mutual Fund, Axis Mutual Fund, etc.
Mutual Fund Instruments:
Following are the Instruments in a Mutual Fund:
Based on the Maturity Period, these instruments can be:
i. Open-Ended:
Blue-Chip stocks
This scheme allows you to buy or sell Mutual Fund units at any point in time. Funds under this scheme have no fixed maturity date. You can sell or buy units based on the net asset value of the fund. The NAV fluctuates daily based on the prices of the shares and bonds in the market.
No limitation is there on the number of units that can be issued under an open-ended scheme. One can invest in these funds through systematic investment plans (SIPs).
In SIPs , you can choose a fixed amount, say Rs 2000, and invest it monthly or quarterly. This amount is deducted from your chosen bank account at the start of every month or quarter. It is a less risky investment plan. Since you invest a small amount periodically, you don't feel the burden to invest huge money at one go to start your Mutual Fund Investment. You can use the SIP calculator, which is a simple tool available free online that helps estimate returns you may earn through SIP.
ii. Close Ended:
If you have enough surplus money and planning for a long-term investment, close-ended is the way. You can invest your money through a New Fund Offer in the market. This New Offer remains in the market for a period of thirty days. They have a fixed lock-in period. For example, when you invest in a three-year closed-ended scheme, you have a fixed number of units. You can redeem/sell them at the expiry of three years.
Since you are bound by the lock-in period, you do not fall prey to risky investments. By staying committed to the long term mutual fund, the returns/profits are comparatively maximum as compared to Open-ended ones.
So, if you are interested in markets, stocks, and all things financial, you can plan to invest in Mutual Funds. As it provides a diversified portfolio, it is less risky than other forms of investments and, if planned correctly, can provide profitable yearly returns.
What are Debt Funds?
Holding on to a day job and also managing one’s investments can be challenging for the best of us. Deciding on where, when and how much to invest can mean hours of research that many people cannot afford.
To invest in mutual funds is to put money into an asset class of one’s choice--equity, debt, money markets or a pre-specified mix of these, with the assurance that professionals will be managing these funds and deciding ultimate allocations of the pooled assets in line with the fund’s stated objectives.
Investors can base their choice of mutual funds on various criteria, including their end financial goal and overall risk appetite. Among the numerous mutual funds available to investors, fixed-income or debt mutual funds are ideal for conservative investors with minimal risk appetite.
What are debt funds and their benefits?
In debt mutual funds, investments are made across short and long-term government bonds, corporate bonds and money market instruments such as treasury bills or certificates of deposit, though this list is not exhaustive.
As the name suggests, debt instruments are essentially financial products of varying durations and risk profile, which enable the purchase and sale of debt or loans in return for an interest income.
Simply put, with debt mutual funds, investments are made in financial instruments that come with a pre-specified date of maturity and interest rate, allowing investors to earn interest income on maturity. Unlike equities, the returns on these debt instruments are not affected by any volatility in the financial markets. This is largely why debt funds are recommended to investors whose main goal is the preservation of wealth and a steady income.
Debt funds can vary in duration from as little as a few days or months to at least a couple of years, based on the instruments that make up the investment portfolio.
Fixed-income or debt mutual funds rank higher in safety and guarantee of returns (to an extent), compared to equity mutual funds. However, debt funds also differ in risk parameters based on which instruments comprise the portfolio; this is because debt instruments or products also come with a credit rating based on the likelihood of a default on the principal and interest payment by whoever has issued the instrument or taken the loan. The higher the rating, the lower is the risk of default.
Risks Involved
This also means that the highest-rated instruments may provide lower returns. This is because of the risk-reward principle. Lower the risk, lower the returns and vice versa
Talking about risk, debt funds may be less risky than equities, however, investors still take some form of risk when investing in debt instruments:
Among other things, the expense ratio sets apart the variety of debt funds available to investors through various fund houses.
One important factor to note when investing in debt funds is that capital gains earned on units of a scheme held by investors for up to three years is referred to as short-term capital gains and is part of your taxable income and taxed as per the investor’s income slab.
Meanwhile, capital gains earned on units held for over three years is referred to as long-term capital gains and taxed at 20% with indexation benefits.
Conclusion
Debt funds differ in duration from overnight to several years and the best debt fund is one that matches with the investor’s level of comfort for risk. While debt mutual funds offer the comfort that one’s money is managed by a professional, one must still take the time to go through the fine print and choose a fund with a competent money manager at the helm.
What are equity funds?
Contrary to popular thinking, mutual funds can have a mix of equity and debt securities. But, equity funds are those where the investor money largely goes into shares of various enterprises. Based on the weightage of different companies in the fund, the returns can range from 5%-18%. Equity funds tend to be a little riskier than mixed funds and debt funds.
Types of equity funds
There are many ways to categorize equity funds, and we will illustrate them all below.
In Based on market capitalization
Market capitalization means the monetary worth of a firm in the capital market, aka the total market value of all outstanding shares.
Large Cap funds:these equity mutual funds invest 80% or more in companies with large market capitalization or large-cap companies. The market cap is Rs 20k crore or more, being the largest 100 companies.
Mid-Cap Funds: They invest 65% of the money or more in mid-cap companies having a market cap of Rs 5000-20k crore. These companies generally occupy the 101-250th positions in an index.
Small-cap Funds: these equity funds invest 65% or more of the money in companies with less than Rs 5000 crore market capitalization. They come after rank 251 and are the majority of the Indian companies.
Multi-cap Funds: Here, the fund managers choose a mix of large-cap, mid-cap, and small-cap funds and park 65% of the funds at least.
One cannot objectively declare any fund as better than the others just based on size. Those looking for safe and stable returns may prefer large-cap funds, while those with a good risk appetite can consider small-cap funds, which may offer higher returns though with more volatility.
Based on Investment Type
Thematic Equity Funds:in these funds, all the companies in the mix follow one theme like agriculture, or rural development or sustainability, etc. For instance, the sustainability theme may include green energy companies, electric vehicle manufacturers, etc.
Sectoral Equity Fund:All the companies in a sectoral fund belong to the same sector of the economy like the pharmaceutical sector, or FMCG, or power corporations, etc.
Contra Equity Funds:These funds run contrary to market trends, identifying underperforming stocks to invest in, hoping that the companies have good business models and will recover in the long run.
Focused Equity Funds: These funds are allowed to invest only in 30 companies as per SEBI norms but with any market capitalization.
Based on Investment Manager Activity
Passive Funds: These equity mutual funds are not actively intervened by managers and may track an index from which the stocks are picked, ex: ETFs.
Active Funds:In this type, a fund manager monitors the stocks’ performance and changes the weightage if needed.
Should You Invest In An Equity Fund?
You can invest in mutual funds of equity-type to get high returns. However, when you choose an equity fund, you must check its performance over the last 5 years at least. If the fund does not outperform the stock market, then it's not very well-managed. Especially as a new investor choosing a safe, large-cap fund is a good idea till you become seasoned at the game.
If you have a very high-risk appetite, you can look at some private equity funds managed by top professionals and promise very high rewards.
Be warned, though, that they are very risky.
What are mutual funds?
Mutual funds are professionally managed funds that invest into multiple assets financial instruments such as stocks and bonds. Mutual funds usually charge a fee for holding and managing the assets within their portfolio, making changes as and when necessary to meet the fund objectives.
Why mutual funds?
Investors usually invest in mutual funds for the following reasons:
What are hybrid funds?
Now that we understand what mutual funds are and why investors invest in them let’s look at what hybrid mutual funds are. The word hybrid suggests that the fund consists of more than one component. Hybrid funds invest in multiple asset classes: equity, debt instruments, gold, real estate, etc.
For example, if an investor is looking to take risks for a higher return yet also wants an assured regular income, a combination of equity and debt works the best, and this is what a hybrid fund offers.
Advantages of hybrid funds
What are the types of hybrid funds?
Top hybrid funds in the market
Some of the best hybrid funds based on performance are: table pending
What Are Mutual Funds?
Mutual Funds can seem very complex, and therefore, we are here to break that myth and help you understand this simple yet powerful investment option better so you can speed up your wealth creation.
When the money invested by a lot of investors is pooled together to buy securities in the markets, it is known as Mutual Funds (Investment). Mutual Funds are managed by a Fund/Investment Manager, and the value of these Mutual Funds is reflected in the form of a Net Asset Value, also commonly referred to as NAV. The investors in the mutual fund are paid upon income/gains in the scheme proportionately with the number of units they hold. Mutual Funds offer a great way for one to invest in a diverse range of securities that are risk-managed by the fund manager and offer good returns based on the scheme chosen.
Types of Mutual Funds:
There are various types of mutual funds available to investors today depending on the purpose of the investment, types of securities invested in, the risk involved, duration, etc
Let’s have a look at one of the most commonly used fund types, i.e. Equity Linked Saving Schemes(ELSS), which are more commonly referred to as Tax Saving Mutual Funds and some of their salient features.
What are Tax Saving Mutual Funds?
Tax Saving Mutual Funds are the most popular investment schemes available to the common man that is recognized and approved by the Government of India.
Equity Linked Saving Schemes(ELSS) are diversified equity mutual funds that allow investors to get tax deductions under 80C and thus making sure they create wealth for themselves. ELSS invests in a diverse range of equity options across large, mid, and small-cap options.
With a lock-in period of 3 years, ELSS investments are subject to 10.4% tax on the gains upon exiting the investment after 1 year. Investments in ELSS can be made using either Lump Sum amounts or Systematic Investment Plan.
Most fund managers recommend ELSS as a long-term wealth creation opportunity, so if you are looking for an investment option that ticks both boxes of tax savings and long-term wealth creation then ELSS is the best out there.
Benefits of Investing in Tax Saving Mutual Funds(ELSS):
ELSS or Tax Saving Mutual Funds offer a fantastic option when considering long-term wealth-creation opportunities. ELSS has continued to deliver consistent results in terms of performance with an average of 15% returns in the past 3 years, whereas PPF & Fixed Deposits offer returns of 6-8% each
That’s almost 2X returns as compared to other tax-saving instruments such as PPF & Fixed Deposits
Compared to other tax-saving options, ELSS offers the lowest lock-in period of 36 months or 3 years whereas the Public Provident Fund (PPF) has a lock-in period of 15 Years & a National Savings Certificate of 5 Years.
Tax Saving Mutual Funds is as popular among the common man not just because of the ease of investment, the good returns but ELSS also offers the options to make investments monthly using the SIP model with initial investments starting at INR 1000 or make lump sum investments with no upper limit.
While enabling tax-saving under 80(C) for investors, the model turns out to be the best tax-saving instrument following the EEE format i.e. Tax Exemption, Wealth Accumulation & Zero Exit Load. The great returns over a longer duration make it every investor’s best bet to maximize gains over time.
Bottom Line
Invest in ELSS not because they have a short lock-in period or they offer great tax savings, invest in ELSS because they have the highest potential of wealth creation when looked at as a long-term opportunity of 15-20 years. With minimized risks owing to professional fund management, tax savings, and immense wealth creation opportunities, ELSS offers a solid bet for investors with a financial goal.
Shraddha is a 25-year-old IT professional drawing a good salary every month. She’s heard that getting a head start on investing can be useful. When she’s considering different options, a friend of hers tells her about the various benefits of investing in mutual funds.
If you are in the same boat right now and are wondering why mutual funds over instruments like fixed deposits or even equity, this article is for you!
What is a mutual fund?
Before looking at why mutual funds and what mutual funds to invest in, let’s begin by breaking down what a mutual fund is.
Before looking at why mutual funds and what mutual funds to invest in, let’s begin by breaking down what a mutual fund is.
A mutual fund is a pooled investment option wherein a fund house collects money from different investors and invests that in market securities. These could be stocks, debt instruments like corporate or government bonds or even assets like gold.
Mutual funds are a great investment option for individuals looking to grow their money over a period of time.
Advantages of Mutual Funds
Mutual funds are becoming popular investment avenues for people today, especially youngsters. This is because of the numerous benefits of investing in mutual funds. Here are the top 5 reasons why mutual funds are a great investment choice:
One of the thumb rules of smart investing is to diversify investments. Putting all your eggs in one basket can spell disaster if there is a sharp correction in the market. Mutual funds are naturally-diversified investment avenues. A fund invests across asset classes and industries so as to make the best of investors’ money. You don’t have to worry about doing this on your own.
Would you trust anyone to prescribe medications or self-medicate when you are sick? It’s always advisable to go visit a doctor for the same. Similarly, why entrust your money to anybody? Mutual funds are managed by professionals. They study the market and invest in such a way that your money works for you. It’s also a great option for those who lack sound financial knowledge since you don’t have to do much market research. You simply need to find what mutual funds to invest in that meet your financial goals.
Another advantage of mutual funds is that they provide market returns. Fixed deposit instruments provide a lower rate of return when compared to mutual funds. Even debt mutual funds can give you higher returns than FDs. At the same time, because they are diversified instruments, they are less risky than investing in stocks. That’s the kind of balance that works when it comes to investments!
You can invest in mutual funds with as little as Rs. 500 if you choose the systematic investment plan route. You can also invest in mutual funds online through your bank. Liquidating mutual funds is as simple as clicking one button on your screen. This ease is one of the biggest advantages of investing in mutual funds.
Special mutual funds called equity-linked savings schemes also come with tax benefits. You can claim deductions under Section 80C of the Income Tax Act if you invest in these. They provide all the other benefits of mutual funds, but come with a lock-in period of 3 years. Small price to pay for a good investment decision, right?
When considering what mutual funds to invest in, make sure you base the decision on the following factors:
With so many benefits, investing in a mutual fund is certainly the best way to grow your money. If you are looking to invest in mutual funds online, look no further than Mahindra Finance invest solution ,an investment portal that you can trust.
Have you heard terms like small cap equity funds, mid-cap equity funds and large-cap equity funds? Are you wondering what all of this is about? Don’t worry, we’ll help you understand this.
What are caps in mutual funds?
Companies are divided into different categories depending upon their market size. The total value of a company, i.e. the total outstanding shares multiplied by the market price, refers to the market capitalization of a company.
The Securities and Exchange Board of India, which is a regulatory body for mutual funds in India, categories equity mutual funds depending upon the different types of stocks they invest in, or on market capitalization of companies.
Based on market cap, equity mutual funds are categorized into:
Large-cap equity funds are mutual funds that invest a majority of investor money in the best large cap stocks. According to SEBI, large-cap funds must invest at least 80% of the total fund’s assets or investors’ money in companies that are categorized as large cap companies.
SEBI defines large-cap companies as those that are the 100 largest companies listed on stock exchanges in terms of their market capitalization. Large-cap funds are less risky when compared to mid-cap equity funds or small-cap equity funds. This is because they invest in the best large cap stocks that have a good performance history. For investors with relatively low risk appetite looking to invest in mutual funds, large-cap equity funds can be a great option.
Mid-cap equity funds are mutual funds that invest a majority of investor money in mid-cap companies. Just like large-cap company categorization. SEBI defines what a mid-cap company is. According to SEBI, mid-cap companies rank between 101-250 on stock exchanges in terms of their market capitalization. Mid-cap equity funds need to invest at least 65% of the total fund assets in the shares of mid-cap companies.
Mid-cap companies are those that show potential to grow into large-cap companies. However, unlike large-cap stocks, they don’t have an established track record. Mid-cap equity funds carry higher risk than large cap companies since their growth is uncertain. However, they have great growth potential. Investors with a moderate risk appetite looking to grow wealth over the long term can invest in these funds.
Small-cap equity funds are mutual funds that invest a majority of the fund pool in companies with small market capitalizations, or small-cap companies. SEBI defines any company that ranks below 250 on stock exchanges in terms of market cap as small-cap companies.
Small-cap equity mutual funds have to invest at least 65% of their total assets in small-cap companies. The remaining can be invested in other companies or securities. Small cap companies are the riskiest among the three categories of equity mutual funds. However, they also have the potential for most returns. Investors looking to generate wealth and have the ability to stomach risk can invest in small-cap equity mutual funds.
Now that you know the different caps, go ahead and choose what is right for you. Whatever be the cap you invest in, having the right platform to make an informed decision is key as well. Using Mahindra Finance Investment Solutions Portal , you can Invest in a portfolio of mutual fund schemes that is made for you.
Are you looking for an investment to generate higher returns? Is it tough for you to decide? Well, for this, you have the best option of investing in “Equity Funds”. But what are these equity funds? These are basically a type of mutual funds that allows you to make an investment in stocks. You can think about investing via sources like SIP or lumpsum, which then further helps you to invest in stocks.
Equity funds, as compared to the type of mutual funds, are riskier. But as they say, with more risk comes more returns too. Equity mutual funds allow you to invest in stocks of various companies. The investment is based upon the market conditions. You can choose to invest in various types of capitalisation such as “small-cap”, “large-cap”, and “mid-cap” companies.>
Your investment must align with your risk profile and other objectives. If you are looking for a long term goal, then investing in Equity funds is your best choice.
However, there are various kinds of equity mutual funds available. This makes it quite tough for the investors to choose the best one for them. Below are the types of equity funds that will help you to achieve your long term goal-
If you are looking to invest in companies with large capitalisation, this is a good option. These companies are popular for their large caps with a strong and reputable image. These are listed in the top 100 companies. Amazing right? Well, yes, it is. This is the most suitable option for those investors who are ready to invest in lumpsum.
But unfortunately, the returns from these equity funds are much lower than mid and small caps. Don’t worry! This is the one that provides a longer consistency and stability in returns.
After Large-cap funds come to the Mid-cap funds, which are referred to all those 100-250 companies with medium capitalisation. Investment in this means getting higher returns. Although, these are more risk to large-cap funds but is still considered as the most popular ones amongst the investors.
This type of equity funds involves those companies with a small capitalisation of less than 500 crores. It has higher growth potential and is the best choice for investors who are expecting higher returns. Only the investors who have a great knowledge of stocks can choose to invest in this type of funds.
If you are looking for equity funds that are a combination of both equity and bonds, then balanced funds is the one for you. Many investors may be looking for better income, financial safety and modest capitalisation. As the name itself says, balanced funds help them strike a balance between all their needs effectively.
If you look at a particular growing rapidly, you can call such industries with sector mutual funds. For instance, many areas of the economy and banking are growing. So, these equity funds allow you to invest in all those companies which are associated with such growing areas.
These can be further classified into the following-
You can see that these funds are giving you many sectors to invest in. You just need to decide about it.
Conclusion:
Therefore, with a growing economy, investors are looking for various ways to have long term financial security. Above mentioned are a few of the private mutual funds which can be helpful to every investor for meeting their long term needs. You may face a crisis at any time, so secure your future with a suitable investment at the right time!
Marcel wants to save up for a vacation. Suhani wants to buy a home. Both of them want to meet their financial goals by investing in mutual funds. Is it the right choice? Of course! Mutual funds can be used to meet different investment goals with different investment horizons. The right question is, when to invest in mutual funds, what funds to invest in and how to invest depending upon your goals.
What is the time or investment horizon?
The time period over which an investor stays invested in a mutual fund is called the time or investment horizon. Determining the investment horizon depends upon the financial goal, the risk appetite as well as the income needs of the investor.
Short-term investments in mutual funds can range from 1 to 3 years. For instance, Marcel’s goal to save for a vacation is a short-term goal. He may want to go on vacation in a year or two. Since the duration is short, it is best to invest in funds that give relatively stable returns. He can invest in a mutual fund like a liquid fund, short-duration debt fund, or any other debt fund to meet his goal. The best time to invest in mutual funds for the short duration is as soon as one identifies their goal. This will give them more time to grow their money and meet their financial goal comfortably.
Investments for a duration of 3 to 7 years are called medium-term investment horizons. These can be to meet goals like buying a car, saving for a house down payment or to meet educational needs. Typically, since investors have some time to save for such a goal, they can afford to take on some risk. This may be a good time horizon to buy stocks of large-cap companies with assured returns or invest in equity mutual funds. For slightly more risk-averse investors, hybrid funds can be a good choice. Medium-term investors can also take time to decide when to invest in mutual funds. The best time to invest in mutual funds like equity or hybrid funds for medium-term investors is when there is a market downturn. This helps getting more mutual fund units that have the potential to grow over 3-7 years.
This type of equity funds involves those companies with a small capitalisation of less than 500 crores. It has higher growth potential and is the best choice for investors who are expecting higher returns. Only the investors who have a great knowledge of stocks can choose to invest in this type of funds.
If you are looking for equity funds that are a combination of both equity and bonds, then balanced funds is the one for you. Many investors may be looking for better income, financial safety and modest capitalisation. As the name itself says, balanced funds help them strike a balance between all their needs effectively.
When an investor wants to invest for 8-10 years or longer in mutual funds, it is called a long-term investment horizon. Typically, people who aim for retirement funds invest for the long term. This is the perfect situation to buy stocks. If one doesn’t want to take the risk to buy stocks directly, then investing in riskier mutual funds like small-cap or mid-cap equity funds can be a good option. The question of when to invest in mutual funds for the long term is irrelevant because the sooner you start, the more time you have for your money to compound. Since the time horizon is long, any fluctuations in the market will be evened out. You have enough time to make up for any losses.
What is the right time to invest in mutual funds?
The generic question of when to invest in mutual funds can be answered with: right away! Early investment, be it for short-term goals or long-term goals, gives you more time to compound your money. However, it is best to time the market when it comes to investing in equity funds. The best time to invest in mutual funds that are debt or hybrid is anytime!
So what are you waiting for? Go ahead and choose the best fund from Mahindra Finance Investment Solutions Portal.
Most investors choose to invest in a single type of fund. It could be mutual funds, SIP, debt, equity, or something else. However, portfolio investment allows you to choose various options to invest in. It diversifies your options. Thus, you can invest in mutual funds, SIP, debt, equity, and everything else without any restriction. That’s the primary objective of portfolio Investment.
Often, it is interchanged with terms like asset or wealth management. Even portfolio management gets tossed around a lot. The objective of portfolio management is to understand the investor’s risk appetite. Accordingly, you receive options to invest in the market to help you meet the financial goals by assessing your risk tolerance.
Portfolio investment can be in a single segment of the market or the entire industry.
Example Of Stocks And Bonds - Returns & Risk Management
Let’s take two primary examples. Bonds are the safest investments, while Stocks can be unpredictable or risky. A person with portfolio investment can decide to split the funds according to their risk appetite (or tolerance).
In other words, you can split it 50% in stocks and the remaining in bonds. Alternatively, if you want lower risk, you can increase the investment in bonds. Vice-versa if you’re going to increase the risk and returns.
This is how portfolio management primarily works. It attempts to understand the investor, mitigate the risk as much as possible and increase income.
Reasons To Opt For Portfolio Method Of Investing
Now that you understand what the portfolio method is, it’s time to determine its relevance to you. First of all, portfolio investment is a choice. It is not something you ‘have to do in the investment market. However, given below are the reasons or criteria for you to consider this option:
The entire gimmick of portfolio investment is to ensure that you can diversify your profile as an investor. You can invest in various assets, bonds, stocks, and even cryptocurrency. The objective is to enrich your profile, safeguard your funds and mitigate the risks.
It could depend on the options you choose, but portfolio investment majorly provides a constant income flow. Regardless of the options you choose, there will be some percentage of income you can gain. It happens with the diversity of the investment. If you’re someone who likes to play moderate to high-risk and seeks regular income generation, portfolio investment might be excellent for you.
As mentioned earlier, you can change the assets you seek to invest in by understanding your risk appetite. However, even if you have a higher risk tolerance, you can drastically reduce the risk factor or disaster as there will be multiple investments. Thus, even one of the tanks, others can mature for lucrative returns or gains. So, whether you’re a high-risk investor or on the opposite end, you will always manage risk better.
Portfolio management requires minimal asset management and would correlatively reduce transaction costs. Additionally, if you choose to invest in securities, it will reduce the social cost of investment. According to the investment profile, there are many other additional costs that you can reduce if you choose a portfolio method.
Bottom Line
Of course, there are some downsides to the method. For instance, it requires more diligent research and understanding of the financial market.
Overall, the portfolio investing method is excellent for everyone, from a beginner (novice) investor to a veteran. If you want to invest in mutual funds, SIP, and other assets, it is among the best diversifying options.
Fixed Deposit(FD) and Recurring Deposit (RD) are the two most common investment options in India. They both provide the benefit of steady returns with negligible risk and can hence be a fixed source of income for you.
However, the two are often confused. It is vital to understand the difference between FD and RD to align your financial goals and get the best returns. Read on to learn about the main differences between FD and RD.
In the case of a Fixed Deposit, the customer picks a fixed tenure that ranges from one week to 10 years. They will need to invest a lump sum, and interest is received on a monthly or quarterly basis. In a Recurring Deposit, customers get to deposit an amount every month that earns interest at the time of maturity.
Factor |
Fixed Deposit |
Recurring Deposit |
Duration |
Tenure ranges from 7 days to 10 years. |
Tenure ranges from 6 months to over 10 years. |
Limit of investment |
No maximum limit; starting price is Rs 100. |
No maximum limit; the minimum amount differs from provider to provider. |
Return rate |
Varies, but a ballpark figure is 6%-8%. |
Typically 5%-8% for a period of one year, though this can vary according to the provider. |
Tax benefit |
Available as per the Income Tax Act. |
No exemption. However, the amount earned up to Rs 10,000 is exempt from tax. |
Auto renewal option |
Available |
Not available |
Penalty for delayed payment |
Not applicable |
There is a penalty for any delay in an instalment payment. |
Why not open an FD and RD with Mahindra Finance today and enjoy hassle-free investments and payouts? To learn more about the difference between Fixed Deposit and Recurring Deposit or the varying FD and RD interest rates, visit our website.
Two widely trusted investment options are Fixed Deposit (FD) and National Savings Certificate (NSC). Both are time-tested, come with low risk, and ensure steady returns for you in the long run. However, picking between the two can often be difficult.
Learn about the differences between these two financial products so that you can make the right choice while investing your money:
Parameter | National Savings Certificate | Fixed Deposit |
Tenure |
5 years |
7 days to 10 years |
Maximum investment |
No limit |
No limit |
Loan benefit |
Can be used as collateral against loans |
Can be used as collateral against loans |
Tax liability |
TDS is not applicable |
10% TDS is deducted on interest earned |
Interest rate |
Usually higher than FD at around 8% |
Slightly lower than NSC (6%-8%) |
Compounding frequency |
Annually |
Quarterly (in most cases) |
Both FD and NSC are low-risk and secure investment options. They share several common features, including tax benefits up to Rs 1.5 lakh under Section 80C of the Income Tax Act.
Interest rates on FD and NSC are fixed throughout the tenure, and neither has a cap on the maximum amount that can be invested. So, the selection is a personal choice that can vary from individual to individual.
To know which one is better for you, use the FD vs NSC calculator.
Open a Fixed Deposit with Mahindra Finance today and enjoy lucrative interest and several other benefits. Visit our website to learn more.
When it comes to safe investment options in India, PPF and FD are among the most preferred. They both offer a plethora of benefits and are attractive choices, regardless of one’s income. These financial instruments come with some unique features and are ideal options for risk-averse investors.
The following comparison between PPF and FD will help you get a better understanding of which one you should go for:
|
FD |
PPF |
Eligibility |
Open to NRIs, firms, trusts, HUFs, and resident Indians |
Open only to resident Indians |
Joint account |
Allowed |
Not allowed |
Tenure |
Flexibility of tenure (7 days to 20 years) |
Fixed tenure of 15 years |
Liquidity benefit |
Liquidity is better than PPF |
Liquidity is low |
Tax exemption |
Tax exemption can be claimed up to Rs 1.5 lakh |
You get triple exemption – no wealth tax, tax-free returns and deduction on deposits. |
In the case of PPF, customers can make premature withdrawals and also avail of a loan against the invested amount (after completion of the first three years). However, it offers low liquidity. On the other hand, FD offers better liquidity and allows flexibility of tenure. The choice between PPF and FD is, therefore, largely dependent on your desired tenure and the need for liquidity.
While PPF interest rates are fixed by the government, interest rates on FD are determined by the bank in question. Generally, PPF offers a better interest rate as compared to an FD. The PPF vs FD interest rate can be calculated using the PPF vs FD calculator.
Visit our website to know more about PPF account and FD and avail of the product that best suit your needs and goals.
Introduction:
India has seen a massive boom in mutual funds over the past decade. Investors are now receptive to modern investment routes such as SIPs to reap the benefits of equity. Even then, traditional financial options, including FDs, remain a popular choice. Read on to find out what type of investment you should opt for.
Before making a choice, it is advisable to know all about the differences between SIP and FD.
SIP or Systematic Investment Plan is a method of investing in mutual funds through smaller amounts at regular intervals. SIPs can be a good starting point for those looking to invest in equity and debt instruments. It ensures steady returns and inculcates the habit of regular investment.
FD or Fixed Deposit is a traditional and low-risk financial instrument that is mainly offered by banks, NBFCs, and post offices. When an investor opts for an FD, they make a one-time payment for the chosen period and earn interest at a fixed rate. It is ideal for those with a low risk appetite.
Let’s understand the benefits and drawbacks of SIP investment vs FD through the following table:
Parameter |
SIP |
FD |
Suitability |
Suitable for aggressive as well as conservative investors. |
Suitable for conservative investors with a low risk appetite. |
Type of investment |
Regular instalments |
Lump sum |
Risk factor |
Involves risk |
Risk free |
Type of returns |
Dividends and capital gains |
Interest |
Guarantee of returns |
Uncertain |
Certain and fixed |
Liquidity |
High |
Low |
Tenure |
Generally long-term |
Both long-term and short-term |
Taxability |
15% tax if opted out before completion of one year; no tax on long-term investment up to 1 Lakh. |
Taxable based on investor’s income tax slab. |
Whether you should invest in a SIP or FD depends on your investment goals, risk appetite, the amount you wish to invest, etc. It is recommended that you spread your funds across conservative and aggressive investment options to ensure balanced returns and security.
Use the SIP vs FD calculator to make the right choice!
Open a Fixed Deposit with Mahindra Finance and benefit from competitive interest rates and steady returns. Visit our website to learn more.
One of the advantages of starting a fixed deposit (FD) is that it’s a safe way to invest. It also ensures the steady growth of your savings. What’s more, it is very easy to get started - just fill out the application form, either online or offline, and embark on your investing journey!
But before you begin your investment journey, it is good to review the many features of fixed deposits and determine if this is the right scheme for you.
A Fixed Deposit (FD) is a type of savings instrument offered by banks and Non-Banking Financial Companies (NBFCs). It allows you to save a certain amount of money for a predetermined term. This money earns a fixed amount of interest over that period. On maturity, the entire amount - the principal along with interest - is given to you as a lump sum.
There are several advantages of fixed deposit account. But before we look at this aspect in detail, we must familiarise ourselves with the many features of a fixed deposit account.
Given the many useful fixed deposit features and benefits, it makes sense to check out this instrument for financial planning. You can use it to plan for various needs like a home purchase, a child’s wedding expenses, education, and more. Mahindra Finance offers you the option to open a fixed deposit online, making it easier to take a step towards financial security.
If you are looking to save some money for your future use, you could create an FD account. An FD or fixed deposit is a type of savings instrument that allows you to save a fixed amount of money for a pre-decided term. Your savings earn a fixed rate of interest annually, which can help you secure your future and pay for various financial needs.
You can create an FD online or offline. However, opening an online FD account is much more convenient. Read on to understand the steps to open a fixed deposit account online.
An FD account can be opened at a bank or a Non-Banking Financial Company (NBFC). The process can vary slightly depending on the FD provider. However, the basic steps remain the same. Here’s what you generally need to do:
The bank or NBFC will verify your information and activate your FD account in a couple of days. Once your account is active, you will receive a notification on your registered mobile number or email address.
While understanding how to open an FD account, it is also vital to know the documents required for starting the process. Here’s what you need:
It is vital to compare the interest rates and tenure options offered by different providers before you choose an FD. To ensure that you enjoy a smooth experience, check how easy the online application process is and the customer care service of the provider. Further, since you are saving your hard-earned money, make sure to choose a reliable name from the finance industry to avoid any issues of fraud later.
Now that you know how to open a fixed deposit account online, go ahead and open one right away. A fixed deposit can help you keep up with rising prices. It is also safe and contains no market-linked risk. Your earnings are assured, and you can sit back and relax while your money gains interest. Moreover, NBFCs like Mahindra Finance offer attractive interest rates on Fixed Deposits for all ages, including an additional 0.25% for senior citizens.
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For illustration purpose only
Total Amount Payable
50000