This blog is very useful for the people, who started their career just, this is very important to know the different financial tools in our Indian and global money markets..
This information took from expert in insurance who has been Woking in that from past 10+ years named Durga Prasad for best insurance details click on his name and for call any time call him at +918885380429
The financial tools are like
1. Savings.
2. Investments.
3. Insurance.
4. Tax savings
SIP:
Coming to savings there are several types of savings they are like sip(systematic investment plan) this is the best investment in which the customer will get average profit, why because the financial tool SIP is designed like that if we invest our money sip they will debit amount in installments every month so our invested fund will see all the fluctuations of Indian market I mean all ups and downs of the market but definitely investor will get average profit in this financial tool this is call SIP.
MUTUAL FUNDS:
Next these mutual funds are divided into two types.
- Sectoral funds
- Diversified funds
Sectoral funds: in this kind of mutual fund the amount which company fixes to the investor that fund will invest by the company in different sector like real estate, gold, pharmacy, petrol, agriculture, automobile, banking in one word in all sectors and in all AAA+ rating companies means these AAA+ rated companies turnover per year is equal to 1000 crores. In this fund risk is low.
Diversified funds: in this kind of mutual funds the amount which company fixes to the investor that fund will invest by the company in only one sector I mean particularly selective one that may be real estate or pharmacy or any other sector if that single collapse the customer will also get loss. So in this fund risk is very high
Again there are two types of funds in these sectoral funds and diversified funds respectively they are closed ended funds and open ended funds.
Closed ended funds: these funds are also one type of mutual funds in which we don’t have opportunity I mean an option to close the fund or surrender the fund whenever the market is high there is a fixed period to surrender the fund.
Open ended funds: these funds are also second type of mutual funds in which we have an option to surrender our fund whenever the market is high so open ended fund is always safe
Charges in Mutual funds: charges in mutual funds are like: fund management charges, fund allocation charges, entry load and exit load etc.
Shares:
- Shares this is the biggest financial tool of every financial market all over the globe.
- Shares are nothing but a heart of the financial markets.
- The power of this financial tool it can changes the fate of the financial market in a single day.
Example of share: if one person named x started one company with name alpha assume that company is infrastructure company on and average that company will produce 100 tables every month after getting boom in the market due to lake of man power that company couldn’t able to produce more than 100 tables, here the starts the matter of share holders, that share holders will invest money in regular basis to get better man power and material to produce more than 100 tables, the loss of the company and the profit of the company will be equal to all share holders. For declaring for requirement of share holders will declared as in initial public offering.
If any of the share holder reaches 50% share in that company he will be declare as board of director
If everything goes positive shares are the best, if anything goes wrong then every share holder have to bare loss this is all about shares
INSURANCE:
Insurance is the best financial tool which gives self confidence to every policy holder that his family will continue the same life style after his absence, come let us see the types of insurance
1. Traditional
2. Unit linked insurance policy
3. Term plans
Traditional: this is one kind of insurance in which customer have to pay his insurance premiums for a long time that is up to 10,15,20 plus years there is no chance to break up in middle,
Advantages: in financial crisis customer can take loan on that policy
Unit linked insurance policy (ULIP) and types:
1. Pension plan (with insurance and without insurance).
2. Education insurance plan.
3. Short term investment plan
Definition of unit linked insurance policy: this is also sectoral mutual fund in addition with insurance coverage.
Pension plan: Through this kind of policy we can get pension after maturity and this insurance policy in there are two types of pension plans they are zero death benefit plan and death benefit plan we can get tax benefit under tax sec 80(CCC).
Education insurance plan: This is the best plan to design the newly born baby, this is best way to make the parents dreams come true, the son or daughter become doctor or engineer in presence of the father or absence of father.(tax benefit sec: 80 (c).
Term plans: this is all one kind of insurance policy this policy is for people who got moral hazard I mean the people who works in coal mines, marine field and defense. This term plans are purely for insurance there are no returns on this policy. The funds invested in this fund are purely for insurance coverage not for saving.
Tax benefits: all types of insurance plans (traditional, ulips, term) will cover under tax section 80 (c) act, only pension plan will cover under tax section 80ccc act.
On returns the tax section 10(10(d)) applicable
The SIP, shares and mutual funds also comes under investments, as well as through this investments we can get tax benefits
Bank deposits and postal deposit also comes under savings
Our team will upgrade this page whenever we get enhancement on this subject
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