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Are you faced with a financial emergency? Are you looking for the right funding option? Well, the two most attractive funding options that best fit your financial need are top-up loans and personal loans. Here is a comparison between the most sought after funding options doing the rounds of the market. To help you understand which one should you choose and why let us understand what each of them mean and what their features are.

What is a top-up loan?

A top up loan is a financial facility offered by different financial institutions that allow you to borrow a certain sum of money over and above your existing loans such as home loans and personal loans.

What are the features of a top-up loan?

Here is a list of top-up loan features.

Interest rates: The interest rates charged on a top-up loan is usually higher than that charged on a home loan. However, it is much lower than the interest rate charged for a personal loan. The current lowest interest rate for the home top-up loan is 8.9%, and the personal top-up loan is 11.25%.

Eligibility: Not everybody is eligible to avail a top-up loan. Several factors are considered before granting a top-up loan. Banks and other financial institutions check the repayment capability of a candidate. They check the candidate’s past track record concerning repayment. They also check the candidate’s credit score and repayment behaviors associated with the existing loan. If a candidate’s credit reports a favorable, then the concerned banks or other financial institutions approve the top up loan and grant it. Banks usually charge processing fees. However, some banks waive the processing fees.

Tenure: The top-up loans are either given for an outstanding period of an existing loan such as the home loan or 10 years. The tenure of a top-up loan varies from bank to bank.

Utilization: You can make use of a top-up loan for personal purposes such as funding your child’s education, taking a vacation, meeting medical emergencies, marriage expenses, and business expansion. You can also use a top-up loan to construct your house or make modifications to it. However, you cannot use a top-up loan for speculative purposes.

Processing time: The top-up loan processing time is 15 to 20 days.

Collaterals: To avail a top-up loan you don’t need to provide any collateral or any security to the banks or any other financial institutions. You will not need a guarantor either.

What is a personal loan?

A personal loan is an unsecured loan. This means that you are not required to pledge any collateral or security when you avail a personal loan. A personal loan is a consumer loan granted to help you meet personal or household expenses. You can utilize these loans to meet expenses such as marriage expenses, medical expenses, business expansion, home construction, remodification, and child’s educational expenses.

What are the features of a personal loan?

Collaterals: Since a personal loan is an unsecured loan you are not required to provide any collateral or any security to the banks or other financial institutions offering personal loans.

The flexibility of end use: One of the most important features of a personal loan is the flexibility of the end use. There are no restrictions on the end use of the personal loan amount in contrast to an auto loan or a home loan, where the loan amount can be used only to purchase a vehicle or a property respectively. You can use the personal loan amount any way you want.

Eligibility: Not everyone is eligible for a personal loan. The eligible age for a personal loan is 21 to 60 years. Salaried persons working in the public sector, MNCs and in the private companies and self-employed professionals such as CAs, CSs, Doctors, and Architects are eligible to avail a personal loan. Even though the eligibility criteria varies from bank to bank, the general criteria revolve around aspects like the capacity to repay the loan, annual income of the candidate, occupation, and place of residence.

Tenure: The tenure of a personal loan can range between 1 to 5 years. A personal loan for a longer or a shorter period may be allowed on a case by case basis. However, that is rare.

Disbursal of loan: A personal loan is usually disbursed within 7 working days of submitting a loan application to the bank or any other financial institution.

Interest rates: The interest rate of a personal loan is higher than that of a home top-up loan. The current interest rate of a personal loan varies from bank to bank and is subject to certain criteria. However, currently, the interest rate on a personal loan varies between 12.50% and 16.60%

Which of the two is better and why?

Several factors decide which one of the funding option is better for your current financial needs. Some of them are as follows.

Urgency

If a financial emergency hits you and you need money immediately, then you must opt for a personal loan. The personal loan approval process is simple and speedy. More than often the loan amount will get credited to your linked bank account within 72 hours. However, in case of a top-up loan, it takes around 15 days to process the loan because it involves a set procedure and formalities that need to be adhered to before approval of the top up loan. Even though both these funding options are quick in processing in the loan amount, a personal loan is quicker to acquire.

Interest Rate

If you are looking for a more affordable funding option, then a top-up loan is ideal. When you consider the interest rates, then the top up loans charge lower interest rates than personal loans and are more feasible.

EMI Factor

The EMI component of a top-up loan is lower than that of a personal loan. Availing a top-up loan leaves a higher disposable income in your hands.

Other deciding factors for selecting either a personal loan or a top-up loan include restriction of options, the requirement of guarantor, documentation and formalities and eligibility norms.  You must make your pick based on a careful evaluation of your current financial needs and affordability. Before choosing between a top-up loan and a personal loan always make a “Why” analysis. This will help you make the right choice.

The post Top up Loan Vs. Personal Loan – What should you choose and Why? appeared first on Fingyan.

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Legislations in India can be overwhelmingly confusing. Whenever you search on Google, the heavy flow of information from all corners can be frustrating. Amidst this, finding the appropriate information is a mammoth of a task. Hence, this blog has been drafted for all the people who have been looking for authentic and valuable information about Gratuity in India. Before moving to the important aspects associated with gratuity, it is important to understand what the meaning of gratuity is.

In India gratuity is a kind of retirement benefit. In layman’s language gratuity is a lump sum amount of money paid by an employer to an employee when that employee leaves an organization. It is given for the services rendered by the employee during his/her period of employment. In India, the rules and regulations around gratuity are laid out in the Payment of Gratuity Act, 1972. Amendments are made to this act from time to time.

Some of the important gratuity terms are laid out in details below for your in-depth understanding.

Applicability

To be eligible to receive gratuity an employee must complete a minimum of 5 years of service with the current employer. However, in the case of the employee’s demise before completion of 5 years or in case the employee becomes disabled as a result of an illness or an accident, the employer must pay gratuity.

The Gratuity Act applies to the employees of mines, plantations, oilfields, factories, railway companies, ports and other establishments having 10 or more employees. Gratuity is completely paid by the employer, and no part of it comes from the employee’s salary.

Gratuity is payable when an employee is eligible for superannuation, an employee resigns, an employee retires, or when an employee passes away or becomes disabled as a result of an illness or accident. In case of an employee’s death, the amount of gratuity is paid to the employee’s nominee, or to the employee’s legal heir.

Gratuity Calculation Formula

In India Gratuity is calculated using the following formula

Gratuity= Last Drawn Salary x 15/26 x No. of years of service

Notes:

Last Drawn Salary = the Basic Salary + Dearness Allowance

The Ratio 15/26 denotes 15 working days out of 26 working days of a month.

Years of service are rounded to the closest full year of service. For example, if an employee’s period of service is 10 years, 10 months and 13 days, then 11 years will be factored in for the calculation of the gratuity amount.

Forfeiture

An employee’s gratuity amount can be forfeited as per the gratuity act in the following cases.

  • If the service of employees has been terminated because of any act on his or her part that establishes an offense involving moral turpitude. However, such offense must be conducted during the course of his/her employment.
  • If the service of an employee has been terminated as a result of the employee’s disorderly or lawless conduct or any other act that amounts to violence on the employee’s part.

If an employer must forfeit an employee’s gratuity, then a termination order comprising the established charges pertaining to any of the above-mentioned misconducts must be issued. In the absence of such a termination order stating any of the aforementioned allegations, an employer cannot forfeit an employee’s gratuity.

Payment

The employer is liable to pay an employee’s gratuity amount within 30 days from the date on which the employee has billed their gratuity amount to the employer. If the employer fails to pay the gratuity amount within the specified period, then the employer has to pay simple interest on the gratuity amount due from the date on which the gratuity amount becomes payable. The rate of simple interest cannot exceed the rates stipulated by the central government at any given point of time. Gratuity is usually paid in cash. It can also be paid through a bank check or by a demand draft. Gratuity is payable to the employee, the employee’s legal heir or nominee as applicable.

Tax Exemption

Gratuity received is tax exempt to the amount that doesn’t exceed the half month salary (15 days salary) of each complete year of service calculated based on the last drawn salary. This is subject to a maximum amount of Rs.30 Lakhs. This upper limit is applicable irrespective of the number of employers paying gratuity in the same or different years.

Through the Payment of Gratuity (Amendment) Act 2018 the government has raised the tax-free gratuity limit from Rs.20 Lakhs to Rs. 30 Lakhs in 2019.  The gratuity that is paid by the government to the government employees is fully tax exempt.

Protected Against Liabilities

As per the Gratuity Act, no court of law can attach an employee’s gratuity amount to any of the employee’s liabilities. This is applicable whether there is a decree against the employee in the criminal court or the civil court. Gratuity amount is always protected against liabilities.

This blog has been created with the intent to share the comprehensive gratuity knowledge in a nutshell. Hopefully, it has given you the requisite insight into all the aspects associated with gratuity in India. Knowing Gratuity rules is a financial advantage that you can leverage well whether you are an employer or an employee. If you want to dig deeper, you can choose to read the Payment of Gratuity Act 1972 in length.

The post Gratuity – Important Points to Know About the Gratuity appeared first on Fingyan.

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Did you know that what attracts investors to the stock market? Well, the answer is simple. Big money lures investors into the lap of stock markets. However, making money in the stock market is not a piece of cake. It takes a great deal of patience, discipline, prudent research, and in-depth understanding of the stock market.  A profitable outcome is not a result of just luck. It is an outcome of the persistent application of worthy stock market principles that have been deduced from the experiences of millions of stock market investors through countless stock market cycles.

People take this path in the hope of earning quick and easy money. However, investing in stock market is much more complex than winning a lottery ticket one fine morning. Even though there is no sure shot formula to a successful stock market investment, the application of the following stock market golden rules will definitely increase your chances of earning a good return.

Take an informed decision

Before investing your hard-earned money in the stock market, you must undertake proper research on the stocks you want to purchase. Don’t just make an investment based on a company’s name, fame and industry type. This is not the right way to invest your money in the stock market.

Avoid “Follow the herd” mentality

It has been seen that more than often an investor’s buying decision is strongly influenced by the actions taken by his friends, relatives, acquaintances or neighbors. It is noticed that if everybody around is investing in a particular stock, then the potential customers are more likely to invest in the same stock. This strategy usually backfires in the long run. Hence you must always avoid “Follow the herd” mentality in order to avoid losing your hard earned money.

Start investments in smaller amounts

As a beginner, it is advisable that you go a little slow and start investments in smaller amounts. At this point, you may be a prudent decision maker, but you still lack real-life stock market experience. You must build experience before committing to a big stock market investment. Stick to the stocks that you have studied and analyzed. Buy them only in single digit numbers say 2 stocks or 3 stocks.  Ensure that you don’t spend more than 8 to 10 percent of your monthly net savings in stocks right at the beginning. You must test the waters before you make a sail.

Keep a risk threshold

As a beginner, it is only practical to keep a risk threshold. In the stock trading world, it is termed as “Stop-Loss.” However, expert investors don’t need to apply the stop-loss concept to their investments. As a beginner, you should set a stop loss limit. For example, if you set a stop loss of 10%, and the stock price falls by 10%, the stocks are sold. As a beginner, you need Stop Loss as protection.

Avoid external advice

When you are making the crucial decision of investing in stocks and deciding which ones are best for your investment you must either rely on your extensive research or hire a sound financial advisor.  Do not invest in the stock market purely based on what is being said by the media. Do not rely on an external, and unprofessional stock advice because that only leads to superficial research work. Your investment decision must be based on your own financial goals and ground research.

Don’t let emotions cloud your judgment

A lot of investors have lost a lot of money in the stock market as a result of their incapability to control emotions, particularly greed and fear. In a bull market, it is very easy to get lured by the greed of earning high returns in a short time frame hence, a number of investors led by greed invest heavily in the stock market without really putting much effort towards understanding the associated risk. More than often instead of creating wealth these investors led by emotions burn their fingers badly the minute the stock market sentiment reverses. In a bear market, investor usually panic and sell their stock for unbelievable rock bottom prices. Hence you should not let your emotions cloud your judgment. If you let that happen, you are bound to make a bad investment decision.

Invest your surplus funds

If you are a beginner in the stock market, you would not like to burn a hole in your pocket. When you choose to invest your money in a volatile market like the stock market, then you must ensure that you invest only the surplus funds that you can afford to lose in case you hit the worst-case scenario. It is advisable that you don’t invest a sum that if lost can get you into a financially sticky position. It is not necessary that you make a loss. You may earn a great return on your investment. However, nothing is really guaranteed. Hence it is prudent to avoid a financial crisis by only investing your flush of surplus funds.

Portfolio diversification

The safest investment strategy is to put your eggs in different baskets. Prudent investors invest in stocks of different companies, mapping to different industries and different countries. Portfolio diversification is done in order to ensure that no single bad event can impact all your holdings at the same time or at least impact them to different degrees. Portfolio diversification allows you to recover losses on your total investment. It is the best investment strategy to manage, reduce and diversify risk.

Monitor your investment rigorously

Your effort should not stop at just investing your hard-earned money in the stock market. It should extend to rigorous monitoring of your portfolio. You must persistently educate yourself about the stock market trends and look out for how market changes impact your holdings. Only if you monitor your investments rigorously, you will be able to tune your portfolio to match the changing market trends and minimize your risk of a potential loss. A hawk watch of your investment portfolio is absolutely imperative if you want to grow as an investor in the stock market.

Making an investment in the stock market is an excellent opportunity to build wealth. However, it only works for those who are willing to exhibit perseverance and willing to make an investment in energy and time to build experience. The younger you begin your stock market investment endeavor the finer are the results. Remember to learn to walk before you start running. These beginner-friendly tips will help you successfully kick start your investing career and create a wealth generating channel.

Happy investing!

The post Top 9 Stock Market Tips for Beginners appeared first on Fingyan.

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Before you make a valuable investment in debt funds, it is important that you know what debt funds are. A debt fund is a pool of investment just like an exchange-traded fund or a mutual fund. Debt funds invest in fixed income investments such as corporate bonds, Treasury Bills, Government Securities, and Money Market Instruments. The basic reason for investing in a debt fund is to earn capital appreciation and interest income. Some of the most popular debt funds include Dynamic Bond Funds, Income Funds, Short term and ultra-short term debt funds, Liquid debt funds, Gilt Funds, Credit Opportunities Funds and Fixed Maturity Debt Funds.

Here are 8 Reasons why you should make an investment in debt funds

High Liquidity

Life is unpredictable. You never know when a financial emergency arises. When you are faced with a financial emergency more than often you need money at short notice. It is ideal to invest your money in debt funds to combat such critical scenarios. They are highly liquid, and they act as an emergency reserve. Debt funds can be easily redeemed at will anytime, and within a day your money gets credited to your linked bank account. Usually, debt funds don’t have redemption charges associated to them after a period of one month. With debt funds, you also have the option to make partial withdrawals without breaking your entire amount of investment.

Low on risk

If you invest in debt funds, then it reduces the risk of losses because debt funds are less volatile in comparison to equities. Debt funds are ideal for conservative investors who are looking for a regular income, however, are risk-averse.

Diversification

If you wish to maintain a well-diversified investment portfolio, then you must invest in debt funds. Debt funds are very stable investment instruments when compared to highly volatile equity funds. The presence of debt funds in your investment basket along with equity funds substantially reduces the overall investment portfolio risk. They are quite the risk balancing component of any investment portfolio.

Stable Income

Debt funds are fixed income havens. They are the ideal investment instruments for investors looking for investments that generate regular income. You can generate regular income from debt funds through the dividend payout option or by opting for a Systematic Withdrawal Plan (SWP). SWP is the reverse of SIP. SWP allows you to make withdrawals of a fixed sum of the amount of capital appreciation regularly from your large pool of investment.

Predictable return

If you have set financial goals or targets which you want to accomplish within a short timeframe say within one or two years, then the best place to park your hard earned money is debt funds. Debt funds are less risky, highly liquid and stable income generators. They have predictable returns associated with them. This helps you plan and achieve your financial goals.

Time horizon

The debt fund market has a variety of debt fund investment options regardless of the time horizon. You can invest in liquid debt funds for a short period of less than 3 months. Liquid debt funds are a great alternative to the savings bank account as they generate stable income and are highly liquid. You can also choose to invest in ultra-short bond funds for a period of 3 months to 1 year. Short term bond funds with a time horizon of 1 to 2 years can also be opted for. Medium term debt funds come with a time horizon of 2 to 3 years while long term debt funds have a time horizon of 3 to 5 years. The longer the time horizon of the debt fund, the higher is the risk and the return on the investment.

Opportunity to park short term surplus

Unlike equity funds that are highly volatile in the short run, some of the debt funds offer retail investors the opportunity to park their surplus funds for a short time frame and earn a decent income on it.

Tax efficiency

Debt funds are more tax efficient when compared to other investment instruments. Only the capital gains on the debt funds are taxable. If the capital gain is made during a period of less than 3 years, then it is termed as Short-Term Capital Gain (STCG). However, a Long-Term Capital Gain (LTCG) is when a capital gain is made for over a time horizon of 3 years. You have to pay taxes as per your income slab. In the case of STCG from debt funds, a fixed 20% tax is levied after the application of indexation.

When you choose to invest in debt funds, there are a couple of factors that you must keep in mind. Some of them include the market environment, expense ratio and exit loads, and your current asset allocation and risk tolerance. Before you invest in debt funds, you must assess and evaluate whether or not a particular debt fund in question fits your investment objectives. Some of the crucial factors you must look into are the maturity profile of the debt fund, yield to maturity of the debt fund, the credit rating, the investment strategy of your portfolio, and portfolio duration. If you choose your debt funds correctly, they are the best way to counter equity market volatility.

If you have not added stability to your investment portfolio yet then its high time you expand your investment horizons, invest in debt funds and savor the flavor of a well-diversified investment portfolio and regular incoming income.

The post 8 Reasons Why You Should Invest In Debt Funds appeared first on Fingyan.

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Imagine your life 30 years from now (your post-retirement life) – You are retired, you are living in your beach house with your spouse, and your kids are self-sufficient! Sounds like a picture-perfect life, right?

For the most part, yes it does! The catch?

If you picture yourself living such a peaceful and dreamy retirement, you need to have life insurance in place, while you are still working.

(Image Source: Shutterstock)

Here’s why: “You have always strived hard to give your family the best of everything and will continue doing so even after you retire.”

But have you ever imagined how your family would manage in your absence? Will they be able to live the same lifestyle that they live today?  

To suppress this ever-lingering fear, you need to make a smart decision today — the decision to buy ‘Life Insurance’. This one decision can offer the much-needed peace of mind for the rest of your life.

Given below are a few reasons why life insurance for your retirement is a smart choice:

  1. Acts As Income Replacement

Any life insurance plan offers the basic benefit of income replacement. For instance, term insurance secures the financial future of your loved ones in an unfortunate event like your untimely demise. In such a situation, the insurer pays your nominee a lump sum amount, thereby, financially supporting them in the time of grief.

Similarly, for individuals who are about to retire, a monthly income scheme (retirement plan) offered by reputable insurers like Max Life Insurance can offer income replacement in the form of regular payouts during retirement.

  • Provides Investment Benefit

Several life insurance plans such as monthly income schemes and guaranteed income plans offer growth of your invested premium. These investments not only guarantee you maturity benefits but also offer comprehensive life cover, thus securing the financial future of your family even in your absence.

Plans such as monthly income plans ensure that you aren’t hard-pressed to meet your future plans including vacations, weekend plans, and other commitments. As the name suggests, monthly income schemes provide you with a certain sum of money every month after a few years of payment of premium.

You should note that different insurance companies offer different types of monthly income plans. Meaning, some plans may start the monthly payout after the premium payment period is over while others may start when you are still paying the policy premium.

These plans also vary in terms of entry age, coverage provided, and benefits offered. Therefore, spend some time to understand the different plans available online before buying one.

  • Financial Assistance to Pay off Mortgage in Your Absence

Imagine a person who has an outstanding home loan worth Rs. 20 lakhs and he passes away due to an unfortunate accident. In such a case, his family will have to shoulder the entire burden of the home loan. The situation can become worse in the absence of any financial plan, thereby, creating financial havoc for his surviving family.

At such times, life insurance can act as the perfect shield and take care of any long-term loans in the absence of primary breadwinner. Therefore, if you have any outstanding loans or mortgage, opting for the right coverage amount can save your dear ones from the burden of loan repayments when you are not around.

  • Provides Tax Benefits

Buying a life insurance product, like a monthly income plan for your retirement will offer you not only protection but also tax benefits. Thus, the tax treatment on life insurance products allows you to have more flexibility over your income.

Life insurance plans offer deductions under section 80C (up to 1.5 lakhs on annual premiums paid) and section 10(10D) (on maturity amount) which further lower your taxable income.

The Bottom Line

Life insurance plans can provide more than just the necessary protection during your working years. These smart investment plans can continue to provide benefits throughout your golden days and improve your retirement.

So, start your retirement planning process today by doing proper due diligence. Meaning determine your specific needs, get quotes from quality life insurance providers, and review the insurers before you make your purchase.

The post Buying Life Insurance For Your Retirement is A Smart Decision. Here’s Why appeared first on Fingyan.

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When it comes to running a business today there is no denying the need for technology to make things easier. In some instances, you even need technology just to gain a competitive advantage.

Because of the constant high demand for software solutions, there has developed a rather abundant supply. This has led to difficulties for small businesses to determine which solutions are right for them.

For example, should a small business stick to simple accounting software or is ERP better suited? What’s the difference between the two?

If you’re looking for software solutions to assist in streamlining some of your processes, take a look at whether or not small businesses can benefit from ERP accounting software.

What is ERP?

ERP stands for Enterprise Resource Planning. In the past, ERP was typically something that only larger corporations would find a use for. However, as mentioned today every business needs every advantage it can get on its competitors.

In the case of larger corporation’s ERP is a key tool in managing the key tasks of a business lifecycle. ERP can also supervise business resources between stakeholders such as materials, revenue, and staffing.

Small businesses today can benefit from ERP being applied across multiple industries. There are currently many benefits for small businesses who choose to use ERP accounting software.

The Difference Between ERP and Accounting Software

One of the biggest differences between ERP and accounting software is their capabilities. Accounting software is strictly what the name implies. It is a financial software solution which can be used for accounts payable and receivable and payroll.

ERP is a resource management software solution. ERP has all the capabilities of accounting software and then some. Not only will ERP track and manage the company’s financials, but also human resources, materials, and assets.

Since ERP does all the same as accounting software but with more, it would be safe to say that accounting software is a subset of ERP.

ERP or Accounting Software?

As far as deciding whether or not your small business needs ERP or should just stick with some simple accounting software, remember the golden rule of business. Account for growth and expansion.

When accounting for the future growth and expansion of your business, ERP seems like the better choice. It will provide all the features of accounting software while allowing more resource planning features in other areas of the company.

Let’s take a look at some of the added benefits to using ERP for your small business needs.

  • Lower Costs – Save money on one software system as opposed to multiple for the same work.
  • Streamlined Data Flow – Everything is easily accessible under the one software program.
  • Improved Decision Making – With the ease of access, confidence come in the ability to retrieve necessary data and make decisions accordingly.
  • Increase Sales – With a streamlined data flow and improved decision making, sales will naturally increase in response.

Because the ERP software helps organize everything under one application it is easy for it to expand and grow with your company. Taking on more tasks and handling larger amounts of data.

Making the Leap to ERP

Finally deciding on a software solution is no easy task. Especially, when there is still the daunting hunt for the right provider. After all, knowing what services you need is only half the battle.

Before making any rash decision or big changes to the operation of your company, make sure it fits in the budget. While there are many services that small businesses can benefit from, not all are cost effective.

While ERP does save your company money in the long run, the initial investment could be a bit too steep at the moment. But, if you can afford it, it could benefit your company greatly.

ERP and Beyond

ERP has a great many benefits for small businesses including cutting operating costs, streamlined data flow, and improved decision making. However, ERP software is often compared to accounting software.

The truth is accounting software is a subset of ERP. ERP includes management for financials with ERP’s own accounting software, management for human resources and more.

ERP offers the most benefit to small businesses wishing to grow and expand in their future.

The post Do Small Businesses Need ERP Accounting Software and Can They Benefit from It? appeared first on Fingyan.

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When to invest in gold?

Gold is a metal that has long gotten associated with opulence. It is one of the major options in gifting loved ones during the special occasions and the festive seasons. During the festivals like Diwali and Dhanteras, people gift gold to their near and dear ones. It gets seen that gold as a gift gets not mainly given as jewelry but rather as coins. The value of gold generally soars during these times as the demand is high. An increasing number of people check the prices of gold during this time.

Purity factor of gold coins

There are two main ways to measure the purity factor of gold coins. These are fineness and carat. Carat is the most widely known measure of the purity of gold. The purest form of gold gets considered 24 Carat. It contains 24 out of 24 parts of gold. You can get an idea of the purity of gold by this measure. For instance, a gold coin of 22 carats will have 22 parts of gold, and the rest of the two parts will have other metals like silver or zinc in it. These other metals will make it more durable than others in nature.

Fineness is a major parameter to measure purity. The experts will tell you that even the purest form of gold contains some amounts of impurities mixed in it that even the manufacturers are not able to remove. Fineness is the weight of precious metal in relation to total weight.

The hallmarking of gold coins and jewelry

The Government of India has the Bureau of Indian Standards that ensure consumers do not get cheated when they are buying gold. The Bureau of Indian Standards certifies gold jewelry and coins by embossing the mark on the item to certify the purity level of the gold item. When you buy the gold jewelry or coin, there are five things that you will see marked on the item. You will see the fineness number, carat, hallmark logo and year of marking

If you are checking the gold coin price in India graph before buying any gift, there is one thing that you must know. The Bureau of Indian Standards does not certify or mark the gold that is 24 carats. But you can take the gold to the labs and get it checked if you doubt the purity.

You can check the rate of gold on the internet before going to make the jewelry or coins. The makers charge the price according to the current rate of gold in the market. You can make an estimate on how much the cost is going to be depending on the carat.

Though the benefits of investing in gold remain the same throughout the year, the best time to invest in gold changes every year, while investing in gold, there are certain factors which affect the price of gold. If you look back at the price history of Gold, you will find that most of the people invest in gold right from the beginning of the year which is January. But if you survey it precisely, you will find that January is not the best time of the year to invest in gold.

When to invest in gold?

The price of Gold tends to surge on the first two months of the year. And the price gradually starts falling post-spring and starts rising again after it. So, from the survey, it is clear that the best time to invest in gold is early April or in July. But, it is vital for you to know that the best time to invest in gold changes from year to year. If you go through the yearly graph regarding the rise and fall of gold value, you will find that in the month when the price of gold was low have surged up the next year in the same month.

In general, January is considered as the best time to invest in Gold. But even if you have missed investing in gold in January, then it is no big deal as you can even buy it in March as history proves that March is the best time of the year when the value of Gold is at its highest and starts falling soon after that. And as per experts, this year is considered as one of the best years for you to invest in gold.

The inflation and real rates of gold are meant to be rising in the year 2019. As per the report by the COT, 2019 will witness the value of the Euro is moving towards a neutral position. It is reported that the price of Gold will not be going lower than $1200 for the whole year. Moreover, it is predicted the price will keep on rising throughout the year and will go higher from the mid of the year.

The benefits of investing in gold have been well known to man for years. One can acquire an ample amount of benefits throughout the year if they have invested in gold. But to get the best return, it is vital for them to invest in the right time of the year. And 2019 is one of the best years in recent years when you can invest in gold for the maximum return.

The post Here’s why 2019 is the best time to invest in gold coins appeared first on Fingyan.

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FinGyan - Guide To Finance, Banking & In.. by Praveen Unnikrishnan - 1M ago

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Whenever you start with something new, it is very easy to get lost, overwhelmed or confused with all the available information bombarded at you. This is when you must focus on the fundamentals. Here are a few useful forex trading tips that you should consider before getting started in the forex trading market.

Learn The Basics First

One of the most common mistakes that foreign exchange traders do at the beginning is to jump right into the market without any real foreign exchange market knowledge. You must never rush into Foreign exchange trading without building a solid trading foundation. You should invest time and effort towards learning about how the foreign exchange market really works, familiarize yourself with the trading jargons, and study different forex trading strategies before you dive into the forex trading market. Take the time to study different currency pairs and factors that influence them before risking your hard-earned money.

Define Your Goals and Define A Compatible Trade Style

Before you set out on a journey, it is imperative to decide on your destination and the road you want to take to get there. Similarly, when you set out on your forex trading journey, it is important to clearly define your goals and a forex trade strategy to achieve your goals. Every trading style comprises of a risk profile that requires a specific approach and attitude to trade successfully. For example, you may want to consider day trading if you cannot go to sleep with an open position in the market, or you may choose to be a position trader if you think your funds will appreciate over a period of time and if you have a high-risk appetite. Ensure you select a trading style that is compatible with your personality, risk appetite and financial goals in order to avoid heavy losses and high-stress levels.

Choose A Reputed Broker

One of the most significant forex trading tips is to select a reputed broker. Investing time in researching about and understanding the differences between various brokers is of paramount importance. It is crucial to know about how different brokers function and their policies before you select one. Before you choose a broker, ensure your broker has an appropriate trading platform that lets you do the analysis you want to do. For example, if you wish to trade on the basis of Fibonacci numbers, ensure your broker’s trading platform can draw Fibonacci lines. A poor broker with a good platform or a good broker with a poor platform can both hamper your forex trading journey. It is crucial to select the right forex trading partner because execution, pricing and the quality of the customer service can make or break your trading experience.

Choose A Trading Strategy and Stick To It

When you enter a forex trading market as a trader, you must decide your goals, and your trading strategy or methodology should reflect that. You must create a trading plan that should comprise of significant factors such as risk tolerance, profit goals, evaluation criteria, and trading methodology. Your trading methodology should be compatible with and correspond to your set goals. You must be aware of the information you need to make the trade decision of entering or exiting a trade. You should clearly know on what basis you will make appropriate trade decisions to execute successful trades. Whichever forex trading methodology you choose, be persistent and ensure that the methodology you have selected is adaptive.

Self-Retrospection/Self-Analysis Is Crucial

One of the most important forex trading tips is self-retrospection. Self-retrospection/Self Analysis is a very prudent step towards forex trading success. You must take time out to make a structured and organized analysis of trade trends, patterns, and news that can largely impact your forex trading decisions. Studying the market regularly, reflecting on your past trade decisions and closely monitoring trade-related news can help you gain massive insight into the forex trading market and how various factors impact the forex trading market. Self- Analysis shall also sharpen your skills as a trader and help you keep greed and fear out of the trading equation.

Know Your Limits

It is very important to know your limits for a successful forex trading journey.  Knowing your limits is one of the most prudent forex trading tips that you should consider. It includes estimating your risk appetite for each trade, setting your leverage ratio in line with your requirements and most importantly never risking more capital than you can afford to lose. Knowing your limits and keeping your limits in mind while taking forex trading decisions will take you a long way in your trading career.

Don’t Be Afraid to Explore

Even though consistency is very important in order to succeed in the forex trading market, it is also important to re-evaluate and explore different trading strategies and trading methodologies if things are not working exactly the way they were planned. As you grow as a trader your needs and goals will change, your trading plan, methodology and trading style should reflect your goals. If there is a change in your financial situation, there should be a change in your trading plan.

Don’t Trade A Lot

As per an old saying, “Slow and steady wins the race.” Trading with high frequency exposes you to a world of emotional trading mistakes that can destroy your self-esteem and your trading account. It is important that you understand that trading a lot does not mean that you will make a lot of money. Being realistic and grounded will keep self-sabotage mistakes and all kinds of mental traps at bay. Making conscious, prudent and calculated trading decisions is what will take you a long way in your forex trading journey.

Before you rush into the world of forex trading, it is only wise to make use of the above forex trading tips and take the right steps towards a successful forex trading journey. While forex trading offers a high potential of amplifying your wealth; lack of forex trading market knowledge, appropriate forex trading strategy, control over emotions, persistence, desire to acquire knowledge about the forex trading market can be detrimental to your confidence and bank balance.

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Foreign exchange rates are among the most analyzed watched and governmentally manipulated economic measures. If you want to be actively and successfully participate in the foreign exchange market you must acquire the knowledge about the leading factors that cause the fluctuations, variations of the foreign exchange rates and the reasons behind their volatility. Here are some key factors that massively influence the foreign exchange rates of a country.

Inflation Rates

Any kind of change occurring in the market inflation will result in changes in foreign exchange rates. Typically if a country has a lower inflation rate in comparison to another then it shall exhibit an appreciation in the value of its currency, however a country with higher inflation will exhibit depreciation in the value of its currency. High inflation rates are often accompanied by higher interest rates.

Interest Rates

Another key factor that largely impacts the foreign exchange rates is the interest rates. Any changes in the interest rates impact the dollar exchange rate and currency value. Interest rates, inflation rates, and foreign exchange rates are all highly correlated. If there is an increase in the interest rate of a country then it will result in that country’s currency value’s appreciation and vice-versa. Higher interest rates provide higher rates to lenders. This attracts more foreign capital which in turn causes an increase in the foreign exchange rates.

Government Debt

Government debt is the national debt or the public debt owned by the central government. A country with high government debt is less likely to attract foreign capital. This results in inflation. If the market predicts a government debt within a country then its foreign investors are more likely to sell of their bonds in the open market. This results in depreciation in the value of the country’s currency.

Country’ Current Account Balance

The country’s current account balance depicts its balance of trade and its earnings from foreign investments. A current account deficit would mean that a country expenditure on foreign trade is higher than its income and in order to make up the deficit, it is borrowing capital from foreign sources. In simple terms, it means that the country spends more of its own currency on importing products than what it earns through the sale of its exports. The excess demand for foreign currency depreciates the country’s currency value.

Terms of Trade

Terms of trade refers to the ratio between a country’s export prices and import prices. If a country’s exports are higher than that of its imports then the terms of trade of a country would be favorably improved. This will lead to an increase in demand for the country’s currency and appreciation in the country’s currency value. This would mean that the country’s currency value will be higher in comparison to another country’s whose terms of trade are lower.

Political Stability and Economic Performance

A country’s political scenario and economic performance massively impact foreign exchange rates. Foreign investors are attracted to countries that pose a low risk of political and economic instability. Such countries with more economic and political stability draw foreign investment away from countries that pose a high political and economic risk. Increase in foreign capital results in appreciation in the country’s currency value. A country faced with political confusions will lead to a depreciation in the currency rates and a country’s sound financial condition and sound trade policy will positively impact the foreign exchange rates. Political and economic events such as monetary policy changes, financial crisis, elections, wars can massively impact the forex market and reshape a country’s economy.

Employment Data

All countries periodically release their employment rates. The employment rate of a country is a significant indication of the country’s economic condition. A high unemployment rate of a country depicts that the country’s employment rate and its economy is not growing in line with its population growth. This can impact the foreign exchange rates. It can lead to a depreciation in the country’s currency value.

Speculation

When a country’s currency value is expected to rise the investors tend to demand more of that currency in the hope of making profits in the future. This results in the rise of currency value as a result of increased currency demand. The rise in currency value thus leads to an increase in the foreign exchange rate.

All the above factors impact the foreign exchange rates at any given point of time in an economy. If you plan to indulge in active foreign exchange trading then the knowledge of these key crucial factors is only imperative to determine the currency value at any given point of time and to make prudent trading decisions. The knowledge of these factors can enhance your chances of making more money as a currency trader in the foreign exchange market.

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