“Our analysis shows that ELSS gave 26% and 22% annualised returns over three and 10 years, respectively, vis-a-vis 8-9% offered by traditional tax saving investment products such as PPF and NSC,” CRISIL said
Investments in an equity-linked savings scheme (ELSS) of a mutual fund have yielded higher returns compared to other instruments like PPF and NSC in the last few years, a report by CRISIL has said.
“Our analysis shows that ELSS gave 26% and 22% annualised returns over three and 10 years, respectively, vis-a-vis 8-9% offered by traditional tax saving investment products such as public provident fund (PPF) and national savings certificates (NSC),” CRISIL said.
CRISIL added that interest on employees provident fund (EPF) for 2011-12 was slashed to 8.25% from 9.5% in the previous year and thus ELSS can act as a strong alternative to investors.
Though the traditional debt products are considered to be relatively safer bet as they are not affected by volatility, they are unable to generate higher inflation-adjusted returns in the long run.
The PPF accounts fetched 8.12% over the last 10 years and in the similar period, the NSC gave an interest of 9.10%. The average inflation over the past 10 years stood at 6.05%.
“ELSS is not only an attractive option to save tax, but also helps create wealth over the long run. ELSS as a category has outperformed the Nifty 500 across three and 10 years. With average inflation around 7% over the past three years, top CRISIL-ranked ELSS gave an inflation adjusted return of 14%, which is significantly higher than returns offered by other tax saving products,” CRISIL's senior director Mukesh Agarwal said.
The rating agency, however, cautioned that the ELSS investment requires some amount of market risk and had to cherry pick those schemes which have performed consistently well.
“Since investments in ELSS are subject to market risks, investors must take into consideration their age and risk-taking abilities. The investment horizon should be more than five years for higher inflation-adjusted returns.
“Further, investors must choose funds that have performed well both in good and bad times,” CRISIL head for funds and fixed income research Jiju Vidyadharan said.
It said ELSS is not eligible for tax benefits under the DTC, but since the implementation of the new tax regime has been postponed, investors can park their funds in these equity schemes for now.
Sahara India Life Insurance has launched a single premium (non-ULIP & non-participating) endowment plan, 'Sahara Nivesh Bima’
Sahara India Life Insurance has launched a single premium plan—'Sahara Nivesh Bima' in Lucknow.
Sahara India Life Insurance, the life insurance company of Sahara India Pariwar, has launched a single premium (non-ULIP & non-participating) endowment plan, 'Sahara Nivesh Bima'.
The new plan is a one time premium paid plan for all those aged between 09 years to 60 years, with a fixed policy term of 10 years.
Sahara Nivesh endowment plan covers the life of the policy holder and guarantees payment of full sum assured on the maturity of policy or on unfortunate death of the life assured.
The product has also added feature of providing Income Tax benefits under section 80C & 10 (10D) of the Income Tax Act, 1961 on payment of and the premiums paid under the policy. Minimum sum assured offered by Sahara Nivesh is Rs50,000, while maximum sum assured has no limit and is subject to underwriting.
This single premium policy commences the immediate risk cover to the policy holder and also accepts the non-standard age proof with extra premium as per the rules. Surrender of the policy is allowed after six months and if required loan can also be availed.
Sahara Nivesh also provides rebate upto 8% to the policyholder on the premiums. 3% rebate on premium is provided, if the sum assured is Rs1 lakh and above but less than Rs3 lakhs. Rebate of 5% on premium is also offered, if the sum assured is Rs3 lakhs and above but less than Rs5 lakhs. While 8% rebate is given on premium, if the sum assured is Rs5 lakhs and above.
The switch over will be subject to a small fee—1% of the outstanding loan amount-- a top SBI official said
In a move that would help a large number of home loan customers to reduce their interest burden, nation's largest lender State Bank of India has decided to allow them to reprice their existing loans at lower rates.
The switch over will be subject to a small fee--one per cent of the outstanding loan amount-- a top official said.
The move is expected to help all those borrowers whose home loans are linked to the prime lending rate which is as high as 14.75% at present.
Currently the floating rate of bank is linked to the base rate which is ten per cent. SBI's current floating rates vary from 10.5% for up to Rs30 lakh loan, 10.75% for between Rs30 lakh and Rs75 lakh, and 11% for loans above Rs75 lakh.
“We thought of giving an option to our existing home loan borrowers who are on the prime lending rate to switch over to the new floating rates that are much lower than our prime lending rates. Anybody can reprice their loan by paying a 1% of their outstanding as an upfront fee,” managing director and chief financial officer of the bank, Diwakar Gupta, told PTI.
He further said there is no cap on the loan tenure or the amount of the loan to reprice their loan to a lower rate nor there is any time limit for the switch over.
The bank was prompted to take this measure in the wake of customers making enquiries about shifting their loans to other banks, according to sources.
The objective is to help the existing customers to lower their interest burden, which will in turn help the bank avoid possible delinquencies.