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Life is full of unwanted accidents you should be sure that your family remains secured dependably. For a secure future, you should choose an insurance company between the best insurance companies in India. There are multiple insurance companies that provide the best insurance at very low premiums. You can choose the most reputed company to secure your family’s future. Accidents never give warnings you should always be prepared for any unwanted incident. So insurance is the best option to secure yourself and your family.
After passing the bill of Life Insurance Corporation Act, LIC was formed in 1956. It is one of the oldest insurance companies and also dominates the market. Over a period of time, LIC has grown bounds and leaps and still continues to dominate. They had served more than 250 million people till now and counting. LIC is one of the oldest and managed by the government that’s why people have more trust in it.
It is among the first private insurance company which started insurance by December 2000. This is a joint venture between ICICI Prudential Life insurance company and ICICI Bank. Their Assets Under Management (AUM) as on 31st March 2019 were `1,604.10 billion. ICICI Prudential Life insurance became the first private insurance company to attain assets under management of `1 trillion.
This is a joint venture between Allianz and Bajaj Limited. To make process faster claim deposits via electronic transfer. They have a solvency ratio of 592% as of March 2018. Bajaj Allianz serves you in the most convenient and faster manner when you need them. They have many plans like ULIPs, group life insurance, term life insurance, child plans, retirement plans and many more. Therefore it is good for insurance. With customized products and services, customer-centric operations and digitally enabled processes, it always works to gain more customers.
It is a part of the Reliance Capital Company and Reliance group. The company has over 10 million policyholders, 727 branches and 55,492 advisors as on March 31, 2019. It has 97.71% claim settlement ratio. This private company is one of the largest non-bank life insurers.
Reliance life insurance caters to five distinct segments
It is a joint venture between the Sun Life financial INC and the Aditya Birla group. Previously it is known as Aditya Birla Financial Services Limited. It has a strong presence across asset management, life insurance, corporate lending, private equity, project finance, wealth management, general insurance broking, etc. Birla group has more than 17,000 employees and 2,00,000 agents. At the end of 2018, they manage aggregate assets worth Rs. 3,000 billion.
It is a joint venture between BNP Paribas Cardiff and State bank of India. BNP Paribas owns 26% and SBI owns about 74%. State bank group has 23,000 branches in India and 198 offices in 37 countries. SBI life has many insurance plans like protection plans, online plans, wealth creation, with insurance retirement plans and child plans. They provide insurance and pension products at competitive prices. With customer satisfaction and high standards, they have world class operating efficiency.
It is a joint venture between Mitsui Sumitomo Insurance Co.Ltd and Max India Ltd. in Max life claims paid percentage is 98.26% and they have 221 offices approved by IRDAI. They offer various plans like life insurance, online insurance, term insurance, online term, child plan, retirement plan and many more.
It is one of the leading insurance companies. This is a joint venture between standard life plc and Housing Development Finance Corporation Ltd. in this venture Standard Life Ltd. holds about 26% equity and HDFC Ltd holds about 72.37 % equity. For a long term sustainable business, they believe in social responsibility. They cover various sectors like education, health, livelihood, environmental sustainability and many more.
It is a joint venture between Tata Sons Ltd. and AIA Group Ltd. they have 98% claim ratio and 83.5% 13th-month persistency. This is among the best insurance companies in India. They provide the simplest and best life and health insurance solutions. Tata AIA life insurance sets and achieves the highest standards. They support their customers when they need some extra push. Therefore with this customers gain extra confidence to do some more or extra.
Exide Life Insurance serves more than 15 lakh customers and manages assets over 12000 crores. With a 96.8% claim settlement ratio, it is capturing the market with exciting policies. They focus on affordable premiums so many customers can take benefit of insurance policies. It has a choice of 3 payout options monthly Income for 120 months, 50% Lump sum + Monthly Income for 60 months and 100% Lump sum.
In the above discussion, we only discussed some of the best insurance companies in India. Therefore it does not mean that these are only insurance companies. You can also choose an insurance company apart from this. These insurance companies provide good products and services. Products of these companies are suitable and versatile for all needs in one’s life. Choosing an insurance company is a tough task because there are so many options.
The best way to secure your family’s future when you could not be there then taking insurance policy is the best option. Insurance policies always cover you and your family in hard times. So before any accident or unwanted incident take insurance policy. Insurance helps you to own a home, vehicles, maintain the standard of living, cover health care costs, run a small business, take a vacation and many more. So take the benefits of insurance policy and choose the best one which suits you the most.
With the help savings account, you can teach your children the importance of money. Savings account for kids is a great step and with this, you can save for your children early. Experts believe that it is never too late to start saving. The sooner you start the better it is for you and your child’s future. Many parents start saving from their child’s birth. For this, there are various ways like fixed deposit, insurance policy, savings account. If you go with savings account then you build a corpus for your child’s future needs.
Some Of The Popular Savings Account For Kids In IndiaPehla Kadam And Pehli Udaan By SBI Bank
Both of these savings bank accounts are loaded with banking features like mobile and internet banking, it will help your children with different channels of modern-day banking. Pehli Udaan account is for minors above 10 years old who can sign uniformly and it doesn’t need jointly opened with parents. But Pehla Kadam is jointly opened with parents.
In this kind of account, kids get ATM/International debit card. Your child gets the daily shopping limit on this account is set at Rs. 10,000 and can withdraw Rs. 2,500 through an ATM. Free education insurance cover of Rs. 1,00,000 is available in this account. Other key benefits are also available like free cash withdrawals and free personalized cheque book.
My Junior Account By Kotak Mahindra Bank
This account comes with a personalized junior ID card for children and has a host of privileges across entertainment, dining and shopping on kid’s brands. It offers 6% p.a. interest rates on a savings balance over Rs. 1 lakh. And a 5% interest rate on an account balance up to Rs. 1 lakh.
Young Stars And Smart Star Account By ICICI Bank
Young stars account is for minors and the smart star account is for children between the ages of 10 and 18. If you are interested in this savings account for kids then you can contact any ICICI bank branches across the country. Kids can only spend Rs. 5,000 on a daily basis.
Future Stars Savings Account By Axis Bank
Parents of children below 10 years of age can operate their child’s account. If one wants to open an account for their child then they have to deposit Rs. 2,500 in the beginning. In this account, a personal accident insurance cover of up to Rs. 2 lakhs is provided.
It is an attractive account because it requires a minimum balance of Rs. 500. No penalty charge for AQB (Average Quarterly Balance). Five free ATM withdrawals at other bank ATMs with a daily withdrawal limit of Rs. 2,000. Free monthly e-statements, personalized cheque book and free passbook facility. In this savings account education loan at competitive interest rates is available.
Therefore if you open a savings account for your kids then you are encouraging your child and also teaching them the value of money. So choose the best savings to account for your kids depending on your needs.
Forex trade India defined as trading in foreign currency. Investors invest to take advantage of currency trading in the short and medium term. Indian exchanges like NSE, BSE, MCX-SX trade forex and forex trade India is legal, only if it is through registered Indian forex brokers. The main currency pairs are EURINR, USDINR, JPYINR and GBPINR. You can also trade with the help of brokers but they should have membership in mentioned exchanges.
How Does Forex Trading from India Work?
Forex trading is the same as equity trading. In forex trading exchange rate matters but in equity trading rate of shares matters. Further, investors can buy or sell their currency pair as per movement in currencies.
Some Examples To Understand Forex Trade India clearly:
Let’s take the dollar if you want to take the benefit of the growing dollar. You have to buy USDINR contract on the exchange at the present price. If the price of dollar increases then you can sell it to take the profit but if you sell it in decreased value then you lose some of your invested money.
An investor can square off their position whenever they want during the period of the contract. By selling currency future contract investor can short close their position.
The investor can take a similarly short and long position in EURINR, JYPINR or GBPINR.
Foreign currency trading is done with registered Indian brokers. The most common exchanges are the NSE (National Stock Exchange) and MCX-SX (Multi-Commodity Exchange). COMEX is used as regulators at the international level exchange. RBI and SEBI regulate currency market.
Some of the best Forex brokers:
SBI FX Trade
Risk In Forex Trading
Forex trade in India may not suit everyone and carries a high-level risk. Before investing in forex trading you should know your risk-carrying capacity, investment objectives and level of experience. If you are interested in forex trading then you should take advice from a financial advisor.
How Are Currency Prices Determined?
Various political and economic conditions are responsible for the change in currency prices. But, apart from these, international trade, interest rates, political stability and inflation are also responsible for currency prices. Many times governments also participate in the foreign exchange market to affect the value of their currency. They do this by lower or raise the price of their domestic market. These factors are highly responsible for currency prices.
Therefore if you know your objectives then you can make money by forex trade in India. Some examples of hard currencies are – the Euro, the US Dollar, the Japanese Yen, and the Pound. The central bank of the country like Federal Reserve Bank of US, Reserve Bank of India etc. issues the currency for every country.
Some investors have a myth that only the US dollar in the base currency in currency trading. But it is not necessary you can use any currency as the base currency. So the investors who are looking for forex trade India should know their aims and then only invest in this.
Pension plans in India or retirement plans are investment plans that distribute a part of your savings to collect over a period of time and provide you with a regular income after retirement. Savings can exhaust very fast and sometimes used in emergencies. So if exhaust your savings then what will happen to your post-retirement period? Hence choose the best pension plans in India which suit you the most.
Types Of Available Best Pension Plans In India
For securing the post-retirement period then pension plans are better investment options. These plans have multiple classifications, based on benefits and plan structure. Here are the types of pension plans in India:
This scheme allows you to collect a corpus through single premium or regular premium over a policy term. Deferred pension plans are immense and also include tax benefits. This plan has different types of payments mode so it suits all kind of investors. And one of the best pension plans in India.
In this plan, the annuity is given to the assured for certain periods like five, ten, fifteen or twenty years, whether the assured survives or not during that duration.
With Cover And Without Cover Pension Plans
“With cover” plans cover life cover. After the death policyholder, a lump-sum amount is given to the family members. In “without cover” plans don’t have any life cover. After the death of the policyholder, the nominee will only get the corpus.
In this scheme, the pension begins immediately. Pension will start instantly after one deposit lump-sum amount. Policyholder’s nominee will be entitled to get money after the death of the policyholder. This scheme also includes tax benefits.
The annuity is paid to the annuitant for a required number of years. In this plan, if the annuitant dies before taking all payments, the annuity will be paid to the nominee. The annuitant can also choose the period.
This plan pays to the annuitant until death. In this plan, there is an option to choose with the spouse option. In case of the death of the annuitant, the pension will be given to the spouse of the policyholder.
PFRDA (Pension Fund Regulatory and Development Authority) is a government body that has allowed 6 companies as fund managers. These plans remain for a long time and giver better returns at maturity.
National Pension Scheme (NPS)
This scheme invests in the equity and debt market. Only 60% of the amount can be withdrawn at the time of retirement. Then the remaining is used to purchase the annuity. Also, its maturity amount is not tax-free. It is one of the best pension plans in India.
Some Of The Best Pension Plans Available In IndiaLIC Jeevan Akshay 6 Plan
This plan comes under immediate annuity plan. You just have to pay a lump sum amount to start this plan. After buying this plan you will get a pension immediately.
Features and benefits
Premium paid in a lump sum
The pension can be received yearly, half-yearly, quarterly or monthly
Entry age 30 years to 85 years
Also, Income tax benefits
Minimum purchase price Rs. 1 lakh for offline and Rs. 1.5 lakh for online
SBI Life Saral
It is a non linked, individual, participating, traditional pension plan. It also offers protection from market volatility and fluctuation to the policyholder.
Features and benefits
For the first 5 years guaranteed bonuses
Minimum premium payment of Rs. 7,500 with no maximum limit
This plan invests in equity and provides regular income in the post-retirement period. Also, it offers protection against market volatility and generates good long term returns.
Features and benefits
Entry age 18 years to 70 years
Policy term ranges 10 years to 30 years
Different payment modes available
Minimum premium of Rs. 48,000 with no maximum limit.
Birla Sun Life Empower
This plan focuses to enhance the policyholder’s savings post-retirement. Further, it is a non-participating and unit linked pension plan.
Features and benefits
Policy term between 5 years to 30 years
Entry age 25 years to 70 years
Freedom to choose policy premium amount
Freedom to choose a risk profile.
Max Life Guaranteed Lifetime Income Plan
This plan guarantees the policyholder a regular stream of income after his or her retirement. Also, it is a non-linked traditional annuity plan.
Features and benefits
Lifelong payments for you and your spouse
Four annuity options available
Yearly, half-yearly, quarterly and monthly options available for the pension.
HDFC Life – Assured
It is a unit link plan. This plan offers market linked returns with loyalty additions. Generally, it invests in multiple plans to give better returns to the policyholder.
Features and benefits
Entry age 18 years to 45 years
Single and limited pay options
From the 11th year onwards loyalty additions every alternate year
Income tax benefits.
Therefore in the above article, we can clearly see that investing in pension plans is a good investment. So choose the best plan which suits you the most. Hence if you are looking for a pension plan then here are the best pension plan in India.
Unit Linked Insurance Plan (ULIP) is a mix of insurance along with investment. ULIP Returns in 10 years are increased.The main motive of this plan is to provide wealth creation along with life cover. In this plan, the insurance company invests a portion in life insurance and remaining portion into a fund that is based on debt or equity and matches with your long term goals. These goals could be children’s education, retirement planning or another important event you may wish to save for.
How Does ULIP Work?
The insurance company invests a portion of the premium in bonds/shares etc. and the remaining amount is utilized in providing an insurance cover. Fund managers manage investment in insurance companies. ULIPS allow you to switch your knowledge of the market’s performance as well as your portfolio between equity and debt based on your risk appetite. This is a huge factor in the popularity that investor can switch easily.
Lock-In-Period Of ULIP
Lock in the period increased from 3 years to 5 years by the Development Authority of India (IRDAI) and the Insurance Regulatory in the year 2010 as regards ULIPs. Insurance is a long term product so the policy can range from 10 to 15 years.
Why You Should Invest In ULIPs & ULIP Returns in 10 years.
Income Tax Benefits: ULIP is eligible for a tax deduction under Section 80C. Apart from this, the returns in this policy on maturity are excluded from income tax under Section 10(10D) of the Income-tax Act. Therefore this is a double benefit that you can claim with this policy.
Life Cover: ULIP gives you a life cover with investment. It offers security to the family of the taxpayer in case of emergencies like the death of taxpayer etc.
Finance Long Term Goals: If you have long term goals like buying a new car, a house, marriage etc. then it is a good investment option for you. Money gets compound effect in this plan. So the returns are better. In ULIP plan the policy always goes for a longer time to reap the best out of it.
The Flexibility Of A Portfolio Switch: ULIPS allow you to switch your knowledge of the market’s performance as well as your portfolio between equity and debt based on your risk appetite. Apart from this insurance companies offer very few numbers of switches free of cost.
Type I ULIP: This pays the fund value to the nominee or higher of the assured sum value in case of death of the policyholder.
Type II ULIP: This pays the fund value and the assured sum value to the nominee in case of the death of the policyholder.
Types Of Fees And ChargesPremium allocation charge
It is deducted as a fixed percentage from the premium in the starting years of the policy. It includes the renewal and initial expenses and intermediary commission expenses.
Fund Management Charges
It is the fee charged the insurance company for the management of the various funds in the ULIP. The charge on non-equity funds is much lower and insurers levy the maximum amount allowed in equity funds.
It is for the insurance coverage under the plan. Mortality charges depend on a number of factors like the sum assured, age etc and are deducted on a monthly basis.
Policy administration charges
It is deducted on a monthly basis and charged for the administration of the policy. ULIP Returns in 10 years are increased and it is a good choice because it offers benefits of insurance with investment.
The moving of investments between options is called switching. There are certain limits per year in which you have options to switch your funds. Some changes may charge of Rs. 100 – Rs. 250 per switch.
Things To Consider As An Investor
Personal financial goals
Compare ULIP offerings
ULIPs offer an advantage in terms of being customizable and flexible. ULIPs provide the option to move your money between debt and equity funds, the flexibility of premium payment, and allow you to withdraw a part of your money whenever you need it. ULIP returns in 10 years can be obtained on your risk appetite you can also choose where to invest. ULIPs are investment instruments that combine the benefits of both investments and life insurance in money markets.
Mutual fund KYC form is defined as a standardized format that is used to capture the key information of an investor. There are many mutual fund KYC form variants depending upon the individual/non-individual applicant or updating existing KYC information with new data or is seeking a fresh KYC for the new investor.
What is KYC – Know Your Customer?
Most financial processes and activities become digitally paperless with the digital revolution. In order to stop the misuse of online financial facilities, regulatory authorities such as the Securities and Exchange Board of India and the Reserve Bank of India came up with compliance requirements such as Know Your Customer (KYC).
KYC Form online Download
There are five different KYC Registration Agencies (KRAs). Each KRA provides KYC form that can download, fill up and submit with the required documents.
You can download Mutual fund KYC form directly from here.
For the proof of identity, the central government of India has given the list of six documents which are officially valid documents. If these documents do not contain the residential proof then you have to provide a valid document which has a complete address.
Here is the list of the KYC documents:
Identity Proof Documents
Voter’s Identity Card
NRGEA Job Card
Address Proof Documents
Bank Account statement
Life Insurance Policy
Registered Lease Agreement
Main Reasons For Filling Out A KYC Form
New Investor Registration
This is the most common reason for non-individuals or individuals investors to fill out and submit a KYC form. The information filed by the investor is collected by the 3rd party fund house or financial institution and passed on to the one of the KRAs (CVL KRA, CAMS KRA, etc.) operating in India.
Change Details Registration
Investors details may vary from time to time and these details have to update on the KYC website. It ensures the accuracy of the investor’s available information. Details change after marriage, moving somewhere, etc. so they should update the changed address, phone number, email id, bank account and so on.
Limitations Of Paper-Based Mutual Fund KYC Form
First of all, it is time-consuming. After the submission of KYC document, many go through each and every page. They see whether the documents are legible and acceptable. This is SEBI-mandated KYC procedure.
Introduction Of Aadhaar-Based Online KYC Registration
Paper KYC system still exists but now people go for Aadhaar-based online KYC registration. The key requirement is a valid Aadhaar card. This online process is less time-consuming. By filling some details investors can check KYC status online.
Investment schemes which are professionally managed are known as mutual funds. There are many mutual fund companies in India. Further, only expert mutual fund managers manage these funds. The fund managers keep a record of the growth and performance of these funds. For performing funds well, they make required alterations so the investors receive the best possible returns.
Gilt Funds: These funds invest money in central and state government securities.
Index Funds: It invests money according to how stock market index functions.
Liquid Mutual Funds: These are investment plans that will assign funds primarily to money market instruments like term deposits, treasury bills, commercial papers etc.
Debt-Oriented Hybrid Funds: In these funds money invested in debt and equity.
Arbitrage Funds: These funds are used as equity plans for taxation purposes.
Dynamic Bond Funds: Money will be invested in money-market and Debt Instruments.
How To Select The Best Mutual Funds?
Every investor wants to end up with the best mutual fund. This process has guided by three points:
Some Steps To Choose The Best Mutual Fund Companies in India:
After considering one’s needs make an investment. Mutual funds have an investment objective which may match your goal. So, choose the fund which covers your financial plan and risk appetite. You can get all the information of mutual fund in information document which has strategy, goal and asset allocation.
Mutual funds which have long track record show the strength of the fund in the tough times. But, a newly launched fund may not perform well in the tough times. A good track record shows the accuracy of the mutual fund’s investment strategies.
Return go and risk hand in hand. Examine mutual funds risk-return potential before finalizing it. Financial ratios can help to do this easily. Alpha and Sharpe ratio are handy to indicate the relevant information.
Expense ratio is a measure which is used to analyze while selecting a mutual fund scheme. It is expressed in percentage and the fund manager charges for managing your account.
Performance fund manager
Fund manager plays an important role in the performance of the fund. With the help of the fund manager, we can know the track record. Generally, a fund which has given contained losses and consistent returns during the bear runs show robust fund management.
Micro ATMs are a small POS type machine. Hence, it allows customers to perform financial transaction like cash withdrawal, deposit and fund transfer.
What are Micro ATMs?
It is a mini version of an Actual ATM. Micro ATMs are a modified point of sales terminals. This terminal can connect to the core banking network through GPRS to perform banking transactions.
This POS has a card swipe facility and a fingerprint scanner. These machines are available to the bank representative at remote locations.
Further, these machines are portable and handy. But is not designed to keep any cash. Generally, the bank representative carries the cash with him. He is also responsible for collecting and depositing cash.
What transactions can be done at Micro ATM?
The Micro ATMs can perform the following functions
Service Request acceptance
eKYC based saving account opening
How does Micro ATM Work?
Working of Micro ATM is almost the same as the normal ATM machine.
You need to go via a verification process. For the verification process, the Aadhaar card with fingerprint scanning or card swipe option is available.
After successful verification, Micro ATM will display various transaction options.
Next, select the option and device will process the transaction.
After a successful transaction, a message will come on the screen and you will get a print receipt.
Further, you will also get SMS alert from your bank about the transaction.
This Micro ATM has the facility for the transaction for all banks. However, it is mandatory to link your Aadhaar card with your bank account in order to use this facility.
Advantages of micro ATMs.
The installation cost of a Micro ATM is lesser than that of an ordinary ATM.
It is portable and handy.
Micro ATM works through GSM connectivity.
Boost in banking services anywhere in the remote area using Micro ATM.
It is a low-cost option alternative to the existing ATM.
Micro ATM is a portable device.
Easy to set up anywhere in the remote area & easy to carry.
The facility of Biometric enabled secured transactions.
This device is usable for any bank.
Micro ATM cannot provide money anytime.
If the bank correspondent is unavailable or the bank representative is not available, you can not do any financial transaction.
Or in connectivity problem, you can not use this device.
It is a card swipe machine through which banks can remotely connect to their core banking system. Further, this POS machine comes with a fingerprint scanner. In other words, micro ATMs are the point of sale terminals. Generally, it is to disburse cash in remote locations. So, Micro ATMs are similar to point of sale (PoS) terminals. Also, are a doorstep mobile banking arrangement cum-mobile ATM device.
Basics of Aadhaar Micro ATMs.
Aadhaar micro ATMs provides basic financial transactions using only Aadhaar number and fingerprint as identity proof. It is like a modified POS or Point of sales device.
Aadhaar is a 12-digit unique identity number provided by UIDAI. Aadhaar ATM is an Automatic trailer machine for banking transactions without ATM card or PIN. It is mentioned by UIDAI (Unique Identification Authority of India).
Aadhaar micro ATMs payment is a new method to provide a complete payment solution where individual’s Aadhaar number is enough to make transactions.
How does micro ATM work with Aadhaar?
Bank assigns a correspondent who signs up customers in remote areas. It is done after verifying their identity like a fingerprint can be used as an authentication mean for rural people. The fingerprint and personal details may also be linked to the Aadhaar Card, which will then serve as the ID proof required to withdraw money.
Mutual Fund Consolidated Statement is a statement of all your mutual fund’s holdings. In a given period it also shows all your mutual fund transactions. You can get this statement from Karvy or CAMS. But, you must have registered email to your mutual fund to avail this service. The best way to get a complete mutual fund consolidated statement is to register your email address with all your mutual funds.
The Process To Download Mutual Fund Consolidated Statement
Click on Consolidated Statement – CAMS+Karvy+FTAMIL+SBFS
Provide your registered email and its password
After this process, you will get your statement via email. You might need your password to open the statement.
Benefits Of Mutual Fund Consolidated Statement
The Consolidated Statement keeps a record of all your transactions and mutual fund holdings.
Performance Evaluation: You can use it to know when these funds become long term and to evaluate the performance of your funds. Debt funds become long term after a 3 year holding period. But, Equity funds become long term after a 1 year holding period.
Tax Liability: Mutual fund consolidated statement gives you a record of all your transactions. So you can use it to calculate your tax liability. You can also submit a tax saving investment and CAS proof to your employer so they deduct the correct amount of TDS.
Details Checking: You can also check your complete details about name, PAN details, account details. Check whether they are correctly mapped to your mutual fund investments. Know that you have been recorded as FATCA compliant or not. It is a procedure required to ascertain your tax residency (Indian or NRI).
Redemptions and Dividends: With the help of CAS you can track all the dividends you have obtained. Also, all the redemptions you have made from mutual funds.
Contents Of Consolidated StatementInformation carried by CAS:
Transaction-related information and financial purchases like merging or switching of funds, dividend or bonus payments
Details regarding new fund offer or reinvestment options
Type of investment – whether systematic or lump sum investment plan, Systematic Transfer Plan or Systematic Withdrawal Plan
Opening and closing the share unit portfolio balance.
Mode of holding units.
UCC and ISIN for each scheme and portfolio.
ISIN is an International Securities Identification Number. It is a 12 character code that identifies debt, equity or other securities. It identifies securities for their settlement and trading in the market.
Why Consolidated Statement Is Important To Investors?
It provides information regarding the condition and financial health of a company. Also, it shows you the condition of the company’s standing in the financial market. So this information can be helpful for investors and vendors.
Further, it reduces paperwork because a single report contains all the financial data.
Investors can know the overall performance of the company.
All investors get their statement on a monthly basis before the 10th.
Therefore with the above discussion, we can say that Consolidated account Statement is necessary for the mutual fund investors. So, with the help of this statement, they can have all the information regarding investment, transactions and details.
Mutual fund expense ratio is an annual fund operating expenses. This is the percentage of payable assets to the fund manager. With the help of team analysts and other analysts, the asset manager manages, divide and advertise the fund to manage risks and maximize returns.
What Is The Definition Of Mutual Fund Expense Ratio?
It calculates per unit cost of managing a fund. So it can be calculated by the ratio between the fund’s total expenses and its assets under management. Asset management companies hire qualified professionals to check developments in debt, money markets and equity. Therefore, they also transact accordingly in the asset markets.
For running the mutual fund scheme expense Ratio includes many charges in a smooth way. They recover this expense from the mutual fund investors on a day-to-day basis. Hence in every six months, they disclose it to the investors.
There are 3 main kinds of expenses as a part of the Expense Ratio:
Mutual funds need formulation of investment plans before actually investing money in the underlying assets. Further, Fund managers require possessing a high level of educational, relevant fund management professional credentials and experience. Investment advisory fee or management fee is compensation for these managers’ expertise. This annual fee is about 0.50% – 1.0% of the funds on average assets.
These are the expenses of running the fund. Hence, this would include customer support, record keeping, communications and information emails. They can be different and can be shown as a percentage of fund assets.
12-1b Distribution Fees
Many mutual funds collect the 12-1b distribution fee for promotional and advertising purposes. Usually, they promote the fund to the investors and charge their shareholders to market.
Mutual Fund Expense Ratio Implications
Mutual fund expense ratio indicates the percentage of sales to the total of a group of expenses or individual expense. So a higher ratio means less profitability. Also, a lower ratio means more profitability. So, you may use the expense ratio to differentiate between passively managed and actively managed funds.
Comparative Analysis Of Expense Ratios
In the selection of mutual funds expense ratio can be an important criterion because it impacts the overall returns a unitholder can earn.
Hence we can clearly see that expense ratio is important but it is not only criteria when you are selecting a mutual fund scheme.
Therefore high mutual fund expense ratio impacts the fund returns. If the funds are managed in a truculent manner then the high returns can be an outcome of high expense ratio. It is due to the choice of good stocks and investments in the asset.