Finance

PAN Card is a necessary document in various financial dealings. This covers your market investments as well as the acquisition of any financial instrument such as FDs. Moreover, every transaction beyond Rs. 50,000, especially when purchasing pricey jewellery or a vehicle, needs you to provide your PAN data. Similarly, opening a bank account or applying for a loan offer may not materialize without a PAN.

However, not all loan applicants have their PAN cards with them. Thus, is it feasible to obtain a personal loan without a PAN card? The answer to the above question is yes. However, the process is a little lengthy and is discussed in detail below, so keep reading.

How to Get a Loan Without Pan Card?

According to government regulations, it is difficult for financial institutions to lend to applicants who do not have a PAN number. Furthermore, the Aadhar card must be linked to your bank account and PAN for instant loan approval. This facilitates the government agencies to keep track of your financial transactions and prevent financial fraud. However, some lenders extend loans without a PAN card to eligible candidates.

In case you do not have a PAN card, submit the alternative documents listed below to get a loan.

• If PAN is not available, then Form 60 is mandatory.

• Photo identity proof: Passport, driving license, Aadhaar card number, Voter’s Identity Card, NREGA job card

• Address Proof: Passport, driving license, Aadhaar card, Voter’s Identity Card, NREGA job card

• Deemed Official Valid Document: Any service provider’s utility bill that is less than two months old (electricity, water bill, telephone, piped gas, post-paid mobile phone), Municipal tax receipt, pension payment orders (PPOs) etc.

• Income proof: Latest salary slip, Recent Audited Financials, Bank details of last three months salary credited.

• Business Proof: Qualification Certificate or Certificate of Practice(COP), Shop Act License, GST registration, Partnership Deed, etc.

In addition to the above documents, it is vital to have a high credit score of 750 or above for getting a loan. A high score gives confidence to the lender about your financial prudence and intent to repay. In addition, the bank details provided help banks determine your present and past financial condition and your repayment capacity. All of the records mentioned above must be sent to the bank together with the fully completed loan application form. Banks may issue you a personal loan without a PAN card once your paperwork has been examined and your eligibility has been determined.

One of the most common reasons for a personal loan application being rejected is the applicant’s lack of eligibility due to inadequate documents. However, before applying for a loan, you should examine your loan eligibility as well as the paperwork required to obtain a loan. If you do not have all of your paperwork in order, you should contact your bank and inquire about the alternative credentials you may submit to secure the loan. For example, people who do not have a PAN card might use the above criteria to obtain a personal loan.

When you are planning your finances, there are some investments you choose to secure your life and some to generate high returns. There are financial instruments these days that provide security along with investment, like a Unit Linked Insurance Plan (ULIP). A ULIP is a type of life insurance with an investment component to it. When you buy a ULIP policy, half of the premium amount you pay is used towards providing you with a life cover, and the other half is used towards investments. In case the policyholder loses their life during the tenure of the ULIP, they will receive a sum assured. It creates financial security for your loved one in your absence. However, if the policyholder has survived when the ULIP has matured, they will receive the sum of investment along with its return.

The fund performance of a ULIP is directly subjected to market volatility. For the investment part of ULIP, an investor has several benefits that most traditional programs fail to offer. If one has never invested in equity markets or finds it too risky, a ULIP is the perfect instrument to start with. Here are some reasons you should invest in equity funds through your ULIP-

• High returns
  ULIPs that are allocated in equity funds are high risk and often offer high returns. When compared to other life insurance products with savings or investment components, a ULIP with equity funds offers much higher returns. Also, these returns easily beat the returns you get from traditional investments like Fixed Deposits (FDs).
• Flexibility to switch funds
  When you are investing in ULIPs, based on your risk appetite, you have three options to allocate your funds in; equity, debt, and balanced funds. If you are afraid of putting all your money in equity, you can balance out the risk by investing in a balanced fund. In balanced funds, half of your money is invested in equity and the other half is invested in debt. So, the risk is moderate and so are the returns.You can also invest in equity funds initially and later switch to debt funds. Several investors prefer to switch from equity to debt during the time of maturity. They earn great returns from their equity allocations in the initial years and later, to reduce the risk, they invest the money in debt funds. The flexibility of switching your allocation accelerates the fund performance of ULIP as it helps one to mitigate the risks and make the most of market fluctuations.
• Enables long-term wealth generation
  ULIP in the long haul helps in wealth generation through the power of compounding. It helps one to achieve their long-term financial goals like buying their dream house, their child’s education, or simply their retirement. Equity funds of ULIP offer high returns which in the long run can multiply with compounding. Use a ULIP plan calculator to get an estimate on the returns of your ULIP and to determine whether the investment is enough for your goals. With a goal-oriented approach, the investments and returns of ULIP would benefit one greatly in the long haul.
• Allows partial withdrawal
  Traditional investments like FDs restrict partial withdrawals and one may have to break their FD to access the funds in it. With your ULIP policy, you can make free partial withdrawals after the lock-in period. The lock-in period for most ULIPs is five years. If you need to withdraw funds early before the lock-in period, you can, but you would have to pay certain fees for it. The feature of partial withdrawals is handy during times of emergencies.
• Tax benefits
  ULIP is a tax-saving instrument where you receive tax benefits at every stage of your policy. The premiums that you pay for your ULIP are exempt from taxes under Section 80C of the Income Tax Act. Most insurance companies allow you to switch between funds at least two or three times, levying no charges. When your ULIP matures, the investment and returns that you receive are also exempt from taxes. Under section 10 (10D) of the Income Tax Act, the sum assured received after maturity and the life cover, both are tax-free.

The returns and flexibility of ULIP with equity funds have made it a more popular investment choice than most traditional investments. Planning your ULIP investments, using a ULIP plan calculator, and taking financial decisions, accordingly, will enable you to meet your long-term goals.

Deciding to invest in a mutual fund through the Systematic Investment Plan (SIP) option is a good call. To make it a great call, you should use an online SIP calculator to know the right SIP amount you should choose as well as the portfolio value that you can expect.

What is a SIP mutual fund calculator?

A SIP mutual fund calculator allows you to accurately determine the amount you need to save and invest to meet your financial goals. For instance, if you are investing in a mutual fund to buy a car after three years and you need Rs 8 lakh, an online SIP calculator will tell you how much you need to begin investing monthly from now on to reach that goal in your desired timeline.

A SIP mutual fund calculator estimates the kind of returns you will earn on your mutual fund investment and gives you a projected portfolio value at the end of your investment period. This helps you have a fair idea of how much your money will amount to and allows you to compare your mutual fund investment with other investment options to see if that’s the investment best suited for this specific financial goal of yours.

How to use an online SIP calculator?

You can find a SIP calculator on most of the Asset Management Companies (AMC) official websites. Here are the things that you need to enter:

• SIP or lumpsum investment
• Monthly investment amount
• Expected rate of return
• Period in years

Here is what the result will include:

• Total invested amount
• Estimated returns amount
• Total portfolio value

You can try various permutations and combinations of the monthly investment amount and the period to arrive at a total portfolio value that will allow you to meet your financial goals. As for the expected rate of return, you should look at the factsheet of the mutual fund schemes that you have zeroed in on.

Online SIP calculators tend to use this formula:

Portfolio value = P [(1+i)^n-1]*(1+i)/i]

Where,
P = SIP amount you invest
i = The rate of interest
n = The number of SIP payments you make

Things to keep in mind when using a SIP calculator

When using a mutual fund return calculator, it’s important to note the following:

• You can use it for both a lumpsum investment as well as a SIP investment in mutual funds
• Most mutual fund calculators do not have the option to account for inflation
• Your portfolio value should be adjusted for the inflation rate to give you a real estimate of its worth at the end of the investment period
• The SIP portfolio value does not account for the expense ratio and the exit load, if any
• The rate of return is only a rough estimate, and your actual returns may differ depending on the market conditions

Final thoughts

Strategic planning is the key to personal finance and an online SIP calculator helps you do just that. By helping you figure out the ideal investment amount and tenure based on your financial goals, it gives you a clear way forward. It also takes away the headache of having to manually calculate your estimated returns and investment value when you invest in a mutual fund.

The MF calculator is a quick and convenient investment tool that you should make sure to use before you invest in any mutual fund scheme. Using it during the initial steps of financial planning and when comparing different investment options and strategies can be beneficial.

Mutual funds are one of the best investment instruments that can help you achieve your financial goals. Apart from providing you an opportunity to earn inflation-beating returns, they allow you to invest in various asset classes as per your investment objective and risk appetite. Different mutual funds invest in different asset classes, including equity, gold, debt, real estate, etc.

However, not all asset classes perform well during certain periods. For example, equities generally perform well during the growth periods, while debts usually perform well during periods of decreasing interest rates. Similarly, gold is considered a good investment option when the markets are too volatile and you don’t want to take that many risks.

This is the reason why it’s very crucial to invest in the right mix of asset classes. However, it might not be easy for you to time the economic cycle and change your asset allocation strategy accordingly. So, what you can do is invest in multi-asset funds.

What are multi-asset funds?

The Securities and Exchange Board of India (SEBI) has laid down certain guidelines for the classification of mutual funds. And as per the SEBI guidelines, a multi-asset fund is a mutual fund that invests in a combination of at least three asset classes. The minimum allocation of each of these assets should be at least 10%.

Typically, the objective of a multi-asset fund is to create a diversified investment portfolio for the investors. They can choose the distribution of asset classes and their composition as per their risk profile and investment horizon.

Are multi-asset funds good for investment?

Multi-asset funds can be a very good investment option for risk-averse investors who want to enjoy steady returns from their investment. Investing in multi-asset funds helps such investors to diversify their risk across investment classes and earn from each one of them during various phases of the economy. Let’s look at the advantages of investing in multi-asset funds:

• Diversification

As mentioned, multi-asset funds help you diversify your investment portfolio by investing in different asset classes. This eliminates the risks associated with investing in just one type of asset class. It also allows you to earn steady returns through various market cycles.

• Portfolio rebalancing

Rebalancing your portfolio from time to time is very crucial. Multi-asset funds come with an option of automatic portfolio rebalancing that can help you in many ways. When the markets become unpredictable and volatile, your fund manager automatically adjusts their asset allocation strategy to protect your investment from market fluctuations.

• Convenience

Multi-asset funds protect you from the hassles of monitoring the market movements daily. They provide you with ready-made diversified portfolios managed by professional fund managers. You can avail the benefits of different classes by investing in just one mutual fund.

• Flexibility

You can invest in a multi-asset fund either as a lump sum or through a Systematic Investment Plan (SIP). This provides you greater flexibility to invest as per your investment objective. Also, you can enter or exit these funds without incurring any additional charges within a year.

Conclusion

Investing in multi-asset funds is a good idea to diversify your investment portfolio without actually investing in multiple mutual funds. This strategy can help you gain steady returns during volatile markets.

If you want to invest in mutual funds online, you can download Tata Capital Moneyfy App on your smartphone and start investing seamlessly.

Derivatives are contracts that derive their price or value from an underlying asset. The underlying asset may be a bond, stock, currency, debt instrument, interest rate, commodity, or market index. There may be two or more parties to a derivative contract.

While different types of financial derivatives exist in the market, you can broadly classify them into four major categories – forwards, swaps, futures & options.

Standard derivative market terms you must know

 Futures contract: This is an agreement between two entities to buy or sell an underlying asset. The sale/purchase is undertaken at a specified price, however, on a future date. Both the parties to a futures contract are obligated to execute the contract on the stipulated date. Like any other transaction involving financial instruments, the buyer holds a long position while the seller holds a short position. Futures contracts are generalised exchange-traded contracts. As the futures exchange is the counterparty to every transaction, default risk is eliminated. Futures on interest rates, forex, and stock indices are primarily popular.

1. Forwards contracts: It is a promise to deliver an underlying asset at a predetermined price at a stipulated date in the future. These tailor-made contracts are executed in the OTC (Over-The-Counter) market and not via an exchange. Hence, they suffer from counterparty risk, as an exchange’s rules and regulations do not govern them.
2. Options: These are derivative finance contracts wherein the option holder/buyer has the right, but not the obligation, to purchase or sell the underlying asset at a prescribed price on a future date. If the buyer exercises the option, the seller must fulfil the contract.
3. Call option: It is an option contract wherein the buyer has the option to buy the underlying asset at a stipulated price on the exercise date.
4. Put option: It is an option contract wherein the holder has the option to sell the underlying asset at a predetermined price on the exercise date.
5. Exercise date: The date on which the option holder exercises the option contract is known as the exercise date. American options can be exercised on or before the option expiry date, while European options can be executed only on the option expiry date.
6. Exercise/Strike price: The exercise price is the price at which the underlying asset can be bought or sold by the option holder on the exercise date.
7. Option premium: It is the present market value of an option contract. It is incurred by the option buyer and is an income for the seller.
8. Equity derivatives:  They derive their value partly or wholly from underlying equities or stocks. Equity futures and options are the most sought-after derivatives in the stock market.
9. Swaps: It is an agreement between two entities to exchange predetermined cash flows for a given period. Popular swaps are interest rate and currency swaps.

Conclusion

These are some derivative market terms you should know before you engage in derivative trading. Derivative trading is a suitable hedging mechanism as you can take simultaneous positions in the spot and derivative markets and mitigate your losses. You can consider taking expert assistance to master derivative trading.

Listed Options

Many companies will not admit to using listed options because of the extra administrative overhead. Companies like Saxo that use listed options generally have a large number of shareholders and a relatively high volume of shares changing hands daily. Visit their website.

In this case, it is usually advantageous for the company to employ listed options rather than over-the-counter (OTC) options. This is because OTC options face greater counterparty risk and legal costs in addition to increased administration costs.

Listing an option contract also provides investors with specific legal remedies that OTC options do not provide.

OTC Options

Over-the-counter (OTC) options are negotiated directly between two parties and usually take place on the phone. There is no centralised counterparty to either party like there would be in a listed options contract.

Additionally, most OTC contracts involve higher transaction costs because each party’s broker charges separately for the transaction – whereas listed options charge a flat fee per contract traded.

Because of these disadvantages, many brokers have stopped offering OTC option facilities altogether since it is more profitable for them to deal in listed options.

Despite the negative connotation associated with OTC options, they are not inherently wrong. Some types of OTC options can be even more advantageous than their listed counterparts depending on the situation that companies find themselves in.

For example, control transactions by controlling shareholders are usually conducted using OTC options because it saves costs and maximize flexibility.

OTC options are traded through a dealer network in an unregulated market, and they do not have standardised terms.

On the other hand, Listed options trade in a regulated environment and offer standardised contract terms and features.

One of the most glaring differences between listed and OTC is that listed has standardised contracts with defined specifications that you can view easily online.

 A key reason for this difference is that listed options attract more institutional investors than over-the-counter (OTC) contracts because of their accessibility to retail traders.

This means there is less room for misrepresentation by brokers when dealing with such large numbers of investors who employ different types of strategies.

Listing requirements vary depending on the market; however, listing requirements typically require having at least one market maker willing to make a two-sided marketplace.

Requirements for Hong Kong

• The contract size cannot be less than HK$100,000 or more than HK$12,000,000
• Each transaction must involve at least two months tenure OR an average of 21 days per month.
• An issuer must have more than 12 months trading history on its securities and earnings before interest taxes, depreciation and amortisation (EBITDA) of at least HK$10 million for the last 12 months before filing for listing application formalities.

OTC options lack this standardisation of terms which makes it difficult for retail traders to trade due to the lack of clarity on what kind of options are being bought and sold

The terms also need to be agreed upon between buyer and seller, which means every trade is unique, resulting in some losses for traders unfamiliar with OTC markets.

Another disadvantage of OTC options trading is that the buyer’s broker needs to have a certain amount of money on hand to ensure they can pay if their client decides to exercise their option when it expires.

This arrangement usually requires only major players such as large banks or financial institutions because they have deep pockets and many clients, giving them an edge over other brokers. It also limits the available market pool because individual investors cannot buy these options due to limited funding capabilities.

OTC options are usually not listed on any public exchange, which means you can trade them at any time between the party who is buying and selling.

An alternative to buying OTC options would be to buy a listed put or call option from another much easier company. Still, it will typically have a much larger premium than if trading exclusively in OTC markets.

White good industry stocks refer to the stocks that are a part of the industry that sells heavy consumer durables such as washing machines, refrigerators, air conditioners, etc. These goods are called white goods because traditionally, they were sold in the colour white. However, these days, they are available in the market in varied colour choices.

Recently, as many as 52 white goods companies submitted their proposals to the central government to invest around Rs. 6,000 crore under the Production-Linked Incentive (PLI) scheme for white goods. Thus, it is relatively a good time to consider these white goods stocks for investment.

Top 6 consumer durable companies in India

Following are the key players in the white goods industry in India, known for their brand value. You can consider investing in them to increase the worth of your portfolio –

• Whirlpool Corporation

Whirlpool Corporation is a multinational home appliances manufacturer headquartered in the United States. Under its strategy of a global approach, Whirlpool forayed into India in the 1980s with a joint venture with the TVS Group. The large cap company is currently one of the major manufacturers and marketers of home appliances in India.

• IFB Industries

Originally called the Indian Fine Blanks Limited, IFB set its foot in India in 1974 with a collaboration with a Swiss company. The company maintains an extensive product portfolio which includes chimneys, washing machines, dishwashers, ovens, etc. A lot of India’s firsts have been introduced by IFB, such as the first dishwasher, clothes dryer, front load washing machine, etc.

• Blue Star

It’s a well-known name in the air conditioners and refrigerators manufacturing domain. For more than half of a century, this mid-cap company has been an exclusive distributor of most of the internationally known manufacturers of industrial products and hi-tech electronic equipment in India.

• Johnson Control

The company creates intelligent buildings, integrated infrastructure, efficient energy solutions to help build smart cities and communities. With a wide range of products in its portfolio and depth of innovation experience, it has been growing globally since 1885.

• Symphony

Symphony is an Indian multinational company present in over 60 countries. It is one of the world’s largest manufacturers of air coolers. It maintains a sustainable competitive advantage over other competitors in the market with 15 copyrights, 48 patents, 64 registered designs, and 201 trademarks.

• LEEL

LEEL is the largest producer of heat exchangers in the Indian HVAC & R industry. The company also has a client base in North America, the Middle East, Europe, and Australia.

Conclusion

With advancements in technologies and infrastructure, white goods industry stocks are poised to register good returns in the future. For guidance and expert advice on these stocks and other investment products, you can reach out to a financial expert. They could help you achieve your dream of wealth creation by making you invest at the right place at the right time.

When it comes to mutual fund investments, many investors might face some challenging questions that need to be answered. Investors are often plagued by the thought of whether they should opt for low cap schemes for aggressive growth or opt for stability via large-cap mutual fund investments. To invest in mutual funds, it is a primary requirement to have a fair knowledge of the different types of mutual funds.

What is a Multicap mutual fund?

One of the strongest aspects that fuels your investment strategy is risk tolerance. It keeps on fluctuating with time and circumstances. This results in a mutual fund investment dilemma as small, medium, or large-cap mutual funds may or may not be in sync with it.

Let us look at the meaning of a Multicap fund:

• It can be said that it is a hybrid form of investment
• Multicap mutual fund invests in a mixed portfolio of equity-related stocks of companies and equity with a range of market capitalizations
• Several types of schemes can be found wherein mutual fund investments have been made in small-cap, mid-cap, and large-cap companies
• This could this category of investment suitable to align with your risk tolerance
• Individually, if you choose to invest your corpus in either of small, mid-cap, or large-cap funds, there is a restriction limited by how the portfolio is defined
• This simply means a fund manager of a medium cap fund cannot invest in mutual funds of small-cap funds, which makes a multicap fund more lucrative as it offers flexibility

What are the types of multicap funds?

Ones the focus on large-cap stocks:

The primary objective is to build and expand a portfolio by making mutual fund investments in large-cap segments. Once satisfactory returns are derived, opportunities in small and mid-cap segments are explored.

Ones that focus on small/mid-cap stocks:

Here the mindset of investments in mid-cap and small-cap segments is quite aggressive. Only in case of a downside, investments in large-cap funds are looked upon for protection. The idea is not to focus on the market capitalizations before investing but to choose stocks that have the ability to outperform.

Advantages of investing in Multicap funds:

Diversification:

• Multicap funds offer a diverse range of portfolio investment opportunities. This tends to help mitigate risks
• Spreading out investments across a range of funds helps to keep a better track of returns

Vast Exposure:

• Fund managers offer a vast exposure as investments are not restricted to any particular business sector, but it is about different key sectors that are the driving force of the economy
• Investors gain insightful knowledge of several business models and this experience helps them to further advance their profile and make the most out of it

Mutual fund investments to build a good portfolio based on current market conditions:

• The experience and expert advice received by investors is a composition of small-, mid-, and large-cap funds that are thriving in current conditions
• If the portfolio manager analyses that small-cap stocks may get overvalued and there is a possibility of a huge shift in that space, they might turn to large-cap funds and settle at a defensive position

Hence, the volatility in Multicap funds helps investors to brace for market conditions and face the circumstances head-on. This method allows them to have critical and in-depth thinking abilities. It allows them to enjoy returns close to their desires and needs.

Aside from being able to save tax, life insurance can provide various other type of benefits. Unfortunately, many people get into life insurance thinking that buying a policy is just a way to save tax or to get some other benefits. However, if you want to have the full benefit of life insurance, you need to know it in the best way possible. Here is a list of features that life insurance has:

Features of life insurance

When you think about looking at features of life insurance, the first idea that comes to your head is a list of benefits it offers along with the rules and regulations you have to follow. However, as beneficial as life insurance is, it is a much more diverse and complex product. The best example of that is that the features of a life insurance policy depend on the type of policy. Here are various types of life insurance policies and their features:

• Term Insurance

Term insurance is a type of life insurance that can be used to secure your family’s financial future should you die. What makes it distinct from other types of life insurance products is that it is extremely affordable. A term plan is a type of life insurance policy that provides high life cover for a low premium. The premium for this type of life insurance policy is typically fixed at the time of purchase and it remains the same throughout the term. Term insurance plans can also offer longer terms of coverage. Policy holders can buy coverage for up to 60 years of age. The death benefit for term insurance can be claimed by the nominee of the policy through lumpsum or regular income various payout options. Some of the individuals who should strongly consider buying term insurance are young professionals, married couples, parents, etc.

• Endowment Plans

Endowment plan is a type of life insurance policy that helps you for the future in different ways. In addition to offering life coverage, the plans also have an extra component of savings. This way, the plan secures your future and helps you in saving regularly.

If you decide to invest in an endowment plan, you have the guarantee of receiving a payout regardless of having to make a claim or not. If you manage to survive the policy, you will receive a lump sum payout as your policy maturity benefit. You also get a tax deduction on the basis of your premium payments under section 80C of the Income Tax Act. The maturity benefit that you would receive at the end of the policy term is also exempt from tax as per Section 10(10D).

• ULIPs

A ULIP is a type of Insurance that combines protection and wealth creation through investment. It can grow faster and provide better returns than traditional plans. The beneficiary will get the death benefit if the policyholder dies during the term of the ULIP. If the latter survives the term, he/she will get the maturity benefits. The investment aspect of ULIPs also offers a great deal of flexibility to policyholders. It gives policyholders the chance to decide how much premium of theirs will go towards investment. Moreover, it allows them to select the funds that their investment will go to. ULIPs also allow you to partially withdraw your investment. By doing so, they give you the chance of having higher liquidity. ULIPs are tax-free policies as well. The invested premiums can qualify you for income tax deductions under Section 80C. The maturity benefit of the policy is also exempt from tax.

Different types of policies have different types of features. Hence, if you want to make the most of your life insurance purchase, you need to match your requirements with the features of each type of plan. The set of features that suit you best is the type of policy you should go for.