Tag Archives: financial literacy

Saving money in a middle-class family is stressful. Lack of finance knowledge, poor budgeting, relying on a single-income family member, and increasing prices of daily goods and services are some of the biggest barriers to saving money in a middle-class family.  Another core barrier is saving in FDs over investing. Most Indian middle-class families prefer to keep their money safe in fixed deposits or savings accounts which do not offer attractive returns that could beat inflation.  If you too are struggling with wealth creation then here is how to save money in a middle-class family to secure your future. 1. Make term insurance your best friend Buying term insurance is one of the easiest ways to save money in a middle-class family. The cost of buying term life insurance is pretty low, especially if you are young and healthy. Most insurance companies offer term insurance worth lakhs at an affordable yearly premium of Rs. 12,000-13,000.  Term insurance can give your family a good cover amount in case of uncertainty of death. Always think about protecting your family through the right term life insurance.  2. Make saving a monthly chore When it comes to savings, make it a habit. Whether it's savings small sums of money in digital gold or a PPF account monthly, savings should be treated as a habit and a monthly chore!  Start this practice with “pay yourself first” by setting aside money from every paycheck. The next thing you can do is, save for multiple goals like an emergency savings fund, vacation fund, down payments, education corpus for your child, etc. Stick to this plan to the best of your ability and find the best home for your savings. Additional read: What is the education gap? 3. Wealth creation via monthly SIP  The best way to save money in a middle-class family and work towards wealth creation is to start a SIP! You can invest very small sums of money every month regularly for a long period of time and create a healthy corpus by the end of the period.  4. Place a limit on your credit card use  Avoid using credit cards frequently! Most financial advisors urge clients to limit their credit card use to 30% of the total available credit. For instance, if you have a credit limit of 5,00,000 then the credit you can use is 1,50,000!  Credit card companies offer attractive schemes to trap you into spending more so be careful. Another way to save money is to always pay your credit card in full amount rather than the minimum pay offered by the card companies.  5. Set a shopping budget for yourself  Make a habit of thinking before buying a particular thing. There’s a difference between want and need. If you cannot differentiate between the two, you cannot save money in a middle-class family. Before buying, you should analyze whether you need it or you want it. Give yourself a week to decide. Spending that much time will make you think twice and buy only what you need.  If you enjoy shopping then give yourself a shopping budget and try to not overspend on it! 6. Compare costs before spending In our rush, we sometimes forget to compare product features and prices in search of better options. Given the posh showroom atmosphere and the impressive conversations of the highly paid salespeople at the counter, we refrain from bargaining and looking for other means of comparison.  Always compare prices on websites and other stores and pay the best price while spending your hard-earned cash. Every penny saved earns an extra penny at the end of the day. 7. Create a passive or secondary income Besides your regular job, you work towards creating different streams of income. Look for opportunities, and try to create a passive income by renting your assets like an apartment or room. You can take up secondary income jobs if you have the time and your primary job allows it!  8. Teach your children to save early on Kids have no idea about how to save and how to earn money. Parents have to teach them and encourage the habit of saving from an early age. Make your children understand the value of money and how much effort it takes to earn it.  Give them monthly pocket money and teach them how to make the most of their money. Teach them to save a portion of it regularly. This habit will help them in the long run.  9. Be open about your finances with your family As they say, communication is the key. Parents should discuss finances with their children. This wouldn’t only make them aware but is good for their general knowledge. Maybe with that knowledge they can also plan their future. Don't leave them in the dark about financial assets built for their bright future. 10. Create a will to protect your family’s future India has Rs 82,000 crore in unclaimed assets. This money is spread across pensions, savings, mutual funds, stocks, government schemes, etc. All due to a lack of planning and foresight on the owner’s front. So be careful, make sure you have a legal will in case of any emergencies. Make sure your children and family members are aware of your savings, investments, and assets that can help them in the long run.  It might sound difficult to save money in a middle-class family, but following the above steps, proper planning, and execution can help you to achieve your financial goals. Saving in small amounts is easy; starting saving early and channelizing your savings could become a key to your successful financial freedom. Consult an expert advisor to get the right plan TALK TO AN EXPERT

Collateral is an item that a lender will accept in exchange for a loan. Collateral may take the shape of real estate or other assets, depending on the loan's intended use. The collateral acts as a form of insurance for the lender.  In other words, if the borrower misses a payment on the loan, the lender may sell the collateral to collect part or all of its losses. In this blog, we will, in detail, discuss what is collateral and how it works. How does collateral work? An asset acquires collateral security when a lender registers a charge over it, either by utilizing a fixed or a floating charge. These fees are also referred to as liens. A collateral mortgage over a particular piece of property or the registration of a charge over a distinctive identifier, such as the serial number of a certain car, are examples of fixed charges.  The borrower cannot sell a physical asset without the lender first waiving its security interest once a security charge has been registered over it. Business borrowers sometimes have floating charges, which are frequently recorded using something called a general security agreement (GSA). A GSA protects all of a borrower's assets that aren't specifically mentioned in a security registration (like our property or vehicle examples). GSAs let lenders utilize inventories and other hard-to-identify assets as collateral to help limit credit exposure. What is a collateral education loan? Property that you give to the lending bank as collateral for the loan you are taking is typically referred to as collateral. The value of the collateral must be higher than the student loan. This serves to reassure the bank if the borrower is unable to pay back the loan. What is a non-collateral education loan? Non-collateral loans are those that the lender makes when there is no collateral involved. The bank takes into account the co-borrower's financial history as well as the student's academic record when making this type of loan.  Now, a lot of parents argue over which of these loan formats is preferable. In actuality, both kinds of loans have a use. As a co-borrower, you must weigh the advantages of both loan kinds and select the one that best suits your needs. Different types of collaterals When making an application for a loan, borrowers can essentially guarantee three different forms of collateral. These are what they are: 1. Immovable assets These might be property assets like a piece of land, a house, a condo, etc. It is important to keep in mind that lenders will not take agricultural land or land that is subject to a Gram Panchayat as security. Open space that is not used for agriculture and has distinct borders, however, is acceptable as collateral for secured student loans. 2. Intangible assets These are liquid securities, such as government bonds, ULIPs, fixed deposits, and mutual funds. FD holders will continue to receive any interest earned on these intangible assets, but the bank will maintain liquid securities like FDs. For an education loan, borrowers can establish a new FD or even pledge a previous one. 3. Third-party secured education loan Uncommon forms of collateral that lenders will accept include the moveable property of a third party (relative or friend). Types of properties that are not accepted in collateral education loan Following are the types of properties that are not accepted in secured education loans: Gram Panchayat assets. Due to the SARFAESI Act of 2002, no lender accepts agricultural land. The property ought to go under a municipality or municipal corporation. Land in the cantonment. A permanent military station and temporary housing for troops in India are both located in the cantonment area. Documents required for collateral education loan? The following typical papers are requested by most lenders: Property title deed.  Registered sale agreement.  Original registration receipt for the above agreement. Letter of Allocation From Municipal Corporation/Authorized Government. Previous chain of sale deed establishing title.  Most recent property tax bills or most electricity bills have the same address.  If the property being pledged is a developed one, an approved plan or map. The latest property tax receipt. Occupancy proof. What is the maximum loan amount for a secured student education loan? The best range for secured education loans for students is between INR 10 lakhs and INR 1.5 crore. Nevertheless, it should be kept in mind that several variables, including the value of the pledged collateral, affect the precise loan amount.  Bank of Baroda authorizes loans up to 100% of the value of the collateral, whereas nationalized banks like SBI authorize loans up to 70% of the value of the collateral. Education loans up to 65-70% of the collateral are approved by private banks like Axis Bank, although at a higher interest rate. Therefore, it's important to understand how collateral functions before applying for a secured loan. Because collateral serves as a form of security for the lender, who has the right to repossess the asset if the borrower defaults on the loan. Consult an expert advisor to get the right plan TALK TO AN EXPERT

If you want to invest in the US stock market to benefit from US stocks, you may start by opening an international trading account in India. But before investing in US equities, here are the 5 important things to know before investing in US stocks. 1. Regulatory framework One of the oldest, most effective, transparent, and well-regulated stock markets in the world is the one in the United States. On US stock markets are listed some of the largest businesses in terms of market capitalization, sales, and profitability. The worldwide exposure and flavor that US markets offer are crucial since many of these listed firms have a significant global presence, scale, and operational structure. The regulatory body that monitors the operation of the US stock markets is the Securities and Exchange Commission (SEC), which was founded in 1934. It guarantees the strict application of laws and rules that establish the highest standards of openness and integrity—essential for stock markets as well as for the safety and trust of investors. 2. Impact of Foreign Exchange  The volatility in the value of the US and other currencies should be taken into account while investing in US equities. This is because before any gain (or loss) for an Indian investment is realized, it would be converted using the appropriate exchange rate in the Indian rupee. The gains (or losses) will fluctuate in lockstep with changes in the exchange rate. An Indian investor must be aware that the exchange rate can be unpredictable and is influenced by a wide range of political, economic, and supply and demand variables. 3. Liberalized Remittance Scheme According to the Reserve Bank of India's Liberalized Remittance Scheme, an individual may invest up to $ 250000 per year in US equities from India (LRS). The cap covers any money sent abroad for purchases, travel, education, or other international transactions during the year. The investor's brokerage account has to be filled before making any investments in US equities. Investors must complete Form A-2, which is available from RBI-authorized dealers. Any sum over the $250000 cap requires RBI approval. Additional read: US stocks for investing in child education 4. Taxation To make your efforts worthwhile, it is crucial to take into account the tax consequences of your international assets. Due to the Double Tax Avoidance Agreement (DTAA) between the US and India, the same income cannot be taxed twice on investments made in the US stock market. 5. Dividend tax The dividends from US stocks are taxed at a fixed rate of 30% for overseas investors. However, as a result of the tax agreement between the US and India, citizens of India pay a 25% tax rate (deducted before distribution). However, because of the double tax avoidance agreement between the US and India, the tax paid in the US may be claimed as a foreign tax credit in your domestic filing. 6. Capital gains tax Your assets in the US are not subject to capital gains tax. However, India requires you to pay tax on your overseas capital gains. This may be divided into two groups.: Long-term capital gain (LTCG)If you keep the equities for more than 24 months before realizing capital gains, you will be subject to indexation advantages and a 20% tax rate in addition to any relevant fees and other surcharges. Short-term capital gain (STCG)Standard income-tax regulations apply to any gains from assets held for less than 24 months, and they are added to your ordinary taxable income. You must also take into account the recently implemented Tax Credited at Source or TCS. Under the new regulations, a 5% TCS will be applied to all international transfers over INR 7 Lakhs in a fiscal year. It is not an additional expenditure to deduct this advance tax when submitting your taxes each year. Charges on US stock-broking account  Using an Indian stock brokerage account to invest in the US stock market is prohibited. You would need to create one with a US stock brokerage company instead. To provide this service, the majority of Indian stock brokers who allow you to invest in US equities typically collaborate with a US stockbroker. You would also be required to pay certain fees for a US stock broking account, just like you would for an Indian trading account. This is something you should also take into consideration when you buy US stocks because these fees can reduce your earnings. These fees include Annual Maintenance Costs, brokerage charges, bank charges, transaction charges, and more. Invest in the US stocks with EduFund  Download the EduFund app and create an account to start investing in US stocks. With zero charges and no hassle account opening process from the comfort of your home, you can start investing in FAANG stocks in your portfolio to geographically diversify your portfolio!! Thus, investing in US firms and equities may give investors access to the worldwide market, credibility, and an opportunity to increase their wealth. Consult an expert advisor to get the right plan TALK TO AN EXPERT

“What is goal-based savings” is a common query of an investor exploring different ways of creating a well-planned financial strategy. Goal-based savings refer to a savings plan that is exclusively created to fulfill a specific goal. These goals can have either long-term, mid-term, or short-term tenure.  Developing the habit of goal-based savings will help the investor focus on setting and fulfilling financial targets successfully. It is an effective way of being smart about a target, pushing yourself towards that end goal through saving and investing, and ultimately making your financial dreams come true.  Goal-based savings can be anything from buying a house to purchasing a laptop or as simple as investing in an SIP every month through systematic and concentrated efforts.  With the Edufund App, you can set up goal-based savings for almost anything you desire because ours is a safe and secure investing platform that provides hassle-free and transparent savings options to fulfill the dream of every single investor. Types of goals in goal-based savings The goals in goal-based savings are based on their savings tenure and their value. The strategies involved in fulfilling them are quite different. 1. Long-Term Goals Long-term goal-based savings refer to a savings plan that lasts for at least five or more years. These are the end goals of an investment and savings journey. If an investor starts early, they can accumulate a substantial amount for their future with small savings. Investment vehicles to achieve long-term goals are real estate, mutual funds, and equity/shares.  Examples are retirement plans and saving for a child’s higher education. 2. Mid-Term Goals Mid-term goals are savings plan that lasts for more than two years and less than five years. Investors find it expensive and difficult to save for these goals because the results hover between immediate and long-term.  Mid-term goals can be achieved by proper planning. Investment vehicles to achieve mid-term goals are debt funds, fixed deposits, and gold investments.  Examples are car loans and down payments for buying a house. 3. Short-Term Goals Short-term goals are savings plan that lasts for less than two years. These are repetitive, require disciplined efforts, and are meant for the immediate future. Investment vehicles to achieve short-term goals are savings accounts, FDs, and debt mutual funds.   Examples – Vacation, jewelry, school fees, a new laptop.  With the Edufund app, you can choose any of these goal-based savings as the app has 4000+ mutual funds, digital gold investments, ELSS, ETFs, and US stocks. You can choose the appropriate investment vehicle to achieve your goal. It is a one-stop app to fulfill your aspirations for goal-based savings.  Additional read: Education inflation rate in India How do achieve goal-based savings? Step 1: Set SMART goals The first step towards investing, saving, or wealth creation is identifying and setting up a need-based specific goal that will help the investor to move forward and work towards achieving it.  Set SMART goals that are specific, measurable, achievable, realistic, and time-bound.  Step 2: Break it into achievable goals Be specific while making your financial goals and ask yourself what goal-based savings is and fit them in one of these categories- long-term, mid-term, or short-term. Remember, every goal has its own time horizon and demands discipline from the investor. When the goals are vague, then it becomes difficult to focus on your approach; hence break down the bigger picture and convert it into small, measurable, and achievable goals. Step 3: Make a budget The investor has to know about their spending so that they can create a financial plan accordingly. Calculate your monthly payments and expenses to get a picture of how much money is left with you. Determine the portion you want to use for savings. Create a budget and put aside the amount regularly, which will help you start investing.  Step 4: Invest wisely Decide on an investment plan and vehicle according to your investment capability, and invest wisely if you want to continue with it for the whole tenure. There are numerous investment schemes in the market, and it might create confusion. Take the help of reputed financial advisors like the ones at the Edufund app to know about investment opportunities in detail.  Step 5: Review and make periodic adjustments Review and readjust the investments periodically to realign them with the current goals. Keep asking yourself if you have invested and saved as per your specific needs. Goals change with time, and it is vital to make corrections along the way for a better financial future.   Conclusion The desire for goal-based savings and investing helps an investor create a solid financial foundation that will lead to stability and financial wealth. EduFund app offers numerous options through its different investment vehicles to achieve goal-based savings effectively. Consult an expert advisor to get the right plan TALK TO AN EXPERT

If you want to become financially secure, it is extremely important to set short-term, mid-term, and long-term financial goals. Even if you plan everything, you cannot be fully prepared for a crisis that may come up anytime. The unexpected bills are the main reasons that affect our financial goals.   Ways to set financial goals 1. Establish a budget  Determining a particular amount of budget is the first and most important thing. You should have a clear idea of where you stand and how you can proceed forward. Money tends to slip through the cracks in the pockets of individuals. You can download an app that can track all of your expenses. Moreover, you need to have the information from all of your accounts in one single place so that you can conduct a proper analysis of the same.   In due course of time, you will realize that the small spending that you do in the canteen every day might add up to a considerable amount. Once you get an idea of how you spend, you will be able to track and save your expenses.  Create Smart Education Goals 2. Categorize your financial goals Proper categorization of your financial goals will help you target your orders. This should be the basic rule when you are proceeding toward your financial goals. It should be broadly divided into short-term, mid-term, and long-term financial goals. When you are setting up your long-term goal, you need to keep in mind all the targets that you have for the short term.   Start by listing all of your routine non-negotiable expenses that are involved. The amount that is left after all the expenses are over goes for investment. You have to make sure that you have set down the goals with an estimate of their costs. Make wise decisions when you are choosing different investment options. For this, you will have to figure out the amount that you need to keep aside monthly for investment. Additional read: Financial mistakes to avoid 3. Deadline for each goal When you have set the categories of different types of financial goals, start setting deadlines for each of them. Long-term financial planning should be followed religiously. There can be minor changes that can be made to short-term goals. Suppose you have a child who will start going to college by 2035, then you should start saving and investing accordingly with a deadline in mind. When the deadline arrives, you must be ready with the funds that will be required for your college education.   Next, if you plan to take a trip to your favorite luxurious destination, start saving and investing with a specific deadline that has to be followed at all costs. You can keep a tab on all the deadlines through a financial goals worksheet. It will also help you to analyze your dates from time to time. 4. Prioritizing all types of financial goals  With all the types of financial goals queued up, you need to start prioritizing all types of financial goals. If a situation of urgency is created, you would know which goal has to be prioritized first. Moreover, label each goal on your worksheet as need, critical, and want. This will create a distinct difference between the types of priorities that you keep for your finances. 5. Clear off your debts and build an emergency fund  Clearing off your debts will help a lot to streamline your entire financial planning. First and foremost, take a look at all of your existing debts. Make a proper plan for it and clear it off as soon as possible. Once that has been done, you can start creating your emergency fund. Your emergency fund should contain at least 12 to 24 months of your living expenses which will include your loan EMI as well. Make sure that you dip into your emergency fund only if it is extremely necessary. It can prove to be extremely counterproductive on your part if you set aside this fund completely. FAQs Why is setting financial goals important? Setting financial goals is crucial for achieving financial security and planning for unforeseen financial crises. How can I track my expenses effectively? You can track expenses by using budgeting apps that consolidate your accounts and analyze your spending patterns. Why should I categorize my financial goals? Categorizing goals into short-term, mid-term, and long-term helps you allocate resources efficiently and plan for each type of goal. How can I set deadlines for my financial goals? Establish deadlines by considering the nature of each goal and your specific target, ensuring timely savings and investments. Why is prioritizing financial goals important? Prioritization helps you identify which goals to focus on first, and labeling them as "need," "critical," or "want" clarifies their importance in your financial plan.

Rising inflation is eating your money. If you don't park your savings in a suitable asset class that can beat inflation, then with time, the value of your savings decreases. Basically, with time, the value of the currency decreases. For example, in 2002, you could buy 20 apples for Rs 100, but in 2022, you can only buy two apples for the same Rs 100. So, you must put your savings in a suitable asset class to beat inflation.  Saving as a parent is essential for your child's future needs. Not only to fulfill the child's needs but also to maintain and upgrade the quality of living. Almost every parent wants to save for their children, but some fail to do that. The reasons could be that they cannot save enough, don't know where to put all their savings, etc. In this topic, we'll explain how parents can save through SIP investment. How does SIP work? SIP stands for Systematic Investment Plan, a financial tool to invest a fixed amount regularly in a mutual fund scheme. Investing regularly gives you the benefit of rupee cost averaging. This means that you buy at a low and high price and the overall cost of buying averages out. With the SIP, you don't need to time the market. How can SIP investment help parents to save? Parents can do the proper planning for their child's higher education and marriage. A financial plan will help them know how much to save for a specific goal and the amount required to save on a monthly basis to achieve the desired target. Putting a lumpsum amount for any specific goal may be a difficult task. But saving monthly could make it easy. SIP investment gives you the option to save as low as Rs 100. So, you can save and invest with Rs 100 only. With an example, let's see how much you need to save as lumpsum and as SIP for your child's higher education. Let's assume your child's age is one year old, and you want to send your kid for an MBA from IIM Ahmedabad. So, technically you have almost 20 years to save. The present cost of attending a master's degree from IIM Ahmedabad is Rs 30 Lac. And after 20 years, it might cost you Rs 1 Crore, assuming an inflation of 7% annually. Let's see how much you need to save as lumpsum and as SIP for your child's higher education. If you look at the table below, you can see that you only need to save Rs 10,000/month for your target, whereas if you want to invest a lumpsum amount, you need Rs 9 Lac for the same target. That's how SIP investment helps your little money to grow over the period and helps you to achieve the desired target. Investing through SIP can make your investment journey more affordable and efficient. Monthly SIP AmountTotal Amount InvestedAccumulated Amount ₹10,000 ₹ 24,00,000 ₹1,03,84,852Note: The calculation is done for 240 months.Source: EduFund Research Team Calculate Investment Returns Lumpsum Amount RequiredTotal Amount InvestedAccumulated Amount ₹9,00,000 ₹ 9,00,000 ₹1,03,33,790Note: The calculation is done for 240 months.Source: EduFund Research Team Conclusion: Investing through SIP can help parents by saving little money to make a large corpus. SIP has been the most effective way of saving and investing. FAQs Can I invest in SIP for my child? Yes, you can invest in SIP (Systematic Investment Plan) for your child's future. It's a smart way to save and build wealth for their education, milestones, or financial security. Just ensure you choose the right mutual funds and set up the SIP in your child's name or as a guardian. At what age should I start SIP? You can start a SIP (Systematic Investment Plan) at any age. The earlier you begin, the more time your investments have to grow, potentially leading to better financial outcomes. Starting in your early 20s or as soon as you have the means is generally advisable. How do I start SIP for my child? To start a SIP for your child, follow these steps: Choose suitable mutual funds. Approach a mutual fund company or a financial institution. Complete the required documentation. Open an account in your child's name or as a guardian. Set the SIP amount and frequency. Link your bank account for automatic payments. Is SIP good for child education? Yes, SIP (Systematic Investment Plan) is an excellent way to save for your child's education. It allows you to invest regularly, potentially building a substantial fund by the time your child needs it for higher education expenses.

A target maturity fund is a fund category with a fixed maturity date. As the maturity date gets closer, the maturity value decreases to zero, and the fund ends its existence. The maturity date of these funds is typically marked in the framework name. The regularity of target maturity funds' returns distinguishes them. Investors who maintain these funds until maturity hope for returns connected to the indicative yields when invested. Returns on target maturity debt funds According to several fund strategists and fund planners, the emergence of bond yields will likely offer the chance for wealthy investors to acquire a 6.5% return in target maturity strategies within the next five years. They genuinely think investing in a combination of such strategies that mature between 2026 and 2028 will provide investors with superior risk-adjusted returns. Target maturity funds provide investors with a predictable return if held until maturity. Such schemes have set maturity and engage passively in bonds with related maturities, which serve as the fund's market portfolio and provide visibility of returns. When the fund matures, investors receive their investment proceeds back. They have occasional liquidity because they are open-ended, and venture capitalists can purchase and sell them at Net Asset Value (NAV). The expense ratio in direct plans is 15-20 basis points and 30-40% points in regular programs, reducing the cost for venture capitalists. Investment advisors recommend target maturity funds because speculators have been having difficulties with their fixed-income investment portfolio over the last year, as bond yields have risen by 142 basis points, weakening the rate of return. Additional read: How to start investing in mutual funds? Target maturity funds are more tax-efficient With increasing and decreasing interest rates on assured financial products, numerous risk-averse speculators, who previously invested in product lines such as financial institution fixed deposits, PPFs, and NSCs, have shifted to debt funds for understandable reasons.  According to these investors, debt funds have become less volatile than general equity funds and much more tax-efficient than fixed deposits, PPFs, and NSCs, with the potential for higher returns.  However, investors are still vulnerable to the risk of default, which is the possibility of losing interest and principal payments, as well as interest rate risk, which is the risk of price volatility due to interest rate changes. TMFs offer greater liquidity than FMPs Target maturity funds (TMFs) assist investors in better exploring the risks linked to debt funds by integrating their investment portfolio with the fund's maturity date.  All those are debt funds that passively measure an underpinning bond index. Thereby, such funds' investment strategy consists of bonds that are a component of the total bond portfolio, with maturities that are close to the fund's outlined maturity. All investment returns obtained during the holding period are invested back in the fund, and the bonds in the investment are retained to maturity.  Target Maturity bond funds, like FMPs (Fixed Maturity Plans), continue operating in an accrual mode. TMFs, unlike FMPs, are open-ended and are available as target-maturity debt index funds. As a result, TMFs provide more liquidity than FMPs. TMFs have a uniform portfolio in terms of duration because all of the bonds in the fund's portfolio are deemed to be maturing as the stated maturity of the fund. The fund's duration decreases over time by holding the bonds until maturity, making investors less vulnerable to price volatility induced by shifts in interest rates Additional read: What are offshore funds? Strong interest in target maturity funds Investors have shown a strong interest in Target Maturity Funds, with maturities ranging from 2026 to 2027. Financial planners recommend this maturity portion to investors for tax indexation and optimal yields. These maturities offer yields ranging from 7.48% to 7.55%. Beyond these maturities, such as 2028 and 2029, the market is relatively illiquid. Passively-managed target maturity funds The portfolio of passively managed target maturity funds is well-known because it is linked to an index of bonds of investment promotion loans, government securities, or a composite index of the two. There is also greater return predictability because the fund aims to provide returns closer to the index's yield to maturity if the investor holds the fund until maturity. Mutual funds have initiated further index-based goal maturity funds, as all ETFs may not generate enough liquidity on stock exchanges, resulting in wider deviations between the executed price and the ETF's intraday NAV (iNav). The new SEBI regulations for passive funds aim to increase retained until maturity because they provide some predictive ability of return, which is liquidity for ETFs on exchanges by stating that no transaction under Rs 25 crore could be sorted directly with the AMC. All such transactions must go through exchanges. SEBI also wants to grow the economic ecosystem by rewarding market-makers who will provide liquidity for ETFs. Conclusion Target Maturity Funds must ideally be important for investors transitioning from long-established deposit accounts to debt funds. FAQs What are Target Maturity Funds, and how do they work? Target Maturity Funds, also known as Target Date Funds, are investment funds designed to align with an investor's target retirement date. They automatically adjust their asset allocation over time, becoming more conservative as the target date approaches. How do Target Maturity Funds choose their investments? Target Maturity Funds typically invest in a mix of stocks, bonds, and cash equivalents. The asset allocation is determined by the fund manager and adjusts over time to reduce risk as the target date nears. What's the primary benefit of investing in Target Maturity Funds? Target Maturity Funds provide a convenient, hands-off approach to investing for retirement. They automatically rebalance to manage risk, making them suitable for investors who prefer a set-and-forget strategy. Can I invest in a Target Maturity Fund for a different financial goal, not just retirement? While they're primarily designed for retirement, some investors use them for other financial goals. However, it's essential to understand that the fund's asset allocation will still follow the specified target date strategy. What happens when a Target Maturity Fund reaches its target date? When a Target Maturity Fund reaches its target date, it typically becomes more conservative, shifting towards income-generating assets. Investors can choose to redeem their shares or reinvest in a new fund.

Snapchat has grown very popular amongst Indians in general due to the nature of how it functions! Snapchat is swiftly becoming one of the most popular social media platforms on the Internet? Undergraduates originally designed it at Stanford University in the United States to enable the instant sharing of photographs and movies. It was previously known as Snapfish. Millions of individuals have posted millions of posts and received millions of messages since the app's introduction in 2021. This is partly because it employs a sophisticated algorithm for determining what the user wants to see and what they do not.   People are concerned that Snapchat will face significant competition from smaller social media businesses such as Hootsuite and Facebook, which explains why Snapchat stock has plummeted thus far. Analysts who follow social and digital media are crossing their fingers that Snapchat will avoid the same fate. The concern that Snapchat will forfeit the battle to these two behemoths is also fuelling the slide in stock prices.   Some predict a comeback in Snapchat shares since consumers enjoy sharing snaps with their friends and family. Facebook and MySpace might be used to make the same point. Analysts believe there is a significant possibility to profit from the advantages that Snapchat may provide investors.  Let's first look at some basic stuff associated with the company. Latest market close $33.26 52-week range 24.32 - 83.34 Dividend yield  NA Earnings per share  $-0.23 Beta 1.14 Market Capitalization $ 53.148 billion Average Volume (3m) 32,658,402 PE ratio  -  There are three ways in which you can invest in Snapchat from India   1. The direct way   You can trade in Snapchat from India by registering on a US brokerage account using technological platforms that provide this service or through a foreign brokerage with a direct presence in India. To start with this, you only need your PAN card and proof of address.   Snapchat's share price was the US $33.26 on January 14, 2022, which is over 2500 rupees. However, the premium price of Snapchat shares should not stop you from investing in them because some platforms allow you to participate in fractional shares. With $1, you can buy a part of a Snapchat stock and own a piece of the corporation.   2. The ETF way   One way to invest in Snapchat stocks from India is through an exchange-traded fund (ETF). ETFs are a grouping of stocks and bonds traded as a single fund. They're comparable to mutual funds in that they're invested in a pool of money. ETFs, on the other hand, are exchanged on the stock exchange and offer a simple and inexpensive way to gain access to a category of market or a group of companies. Buying an ETF via a platform is one way to invest in ETFs.   For example, you can invest in the Vanguard Total Stock Market ETF (VTI) and Global X social media ETF (SOCL), which contains Snapchat as one of its holdings.   Another option for investing in Snapchat stocks from India is to purchase ETFs that invest in Snapchat. You don't need to create a US brokerage account to invest in these ETFs. However, tracking errors in these ETFs may influence your returns.   3. The Mutual fund way   In this case, you will be investing in funds of Funds, a domestic mutual fund that invests in a mutual fund available in the United States. Since the investment would be made in Indian rupees, there is no investment restriction. Snapchat is included in several mutual funds, such as the Edelweiss' US Technology Fund of Fund but only to a minimal level. Furthermore, this strategy may prove to be more costly. An annual expense ratio will be required of you. The expense ratio of these funds is typically greater, as it includes an additional expenditure levied by the core global schemes they invest in, in addition to the usual India fund administration fee.   A note of caution here is to remember to evaluate your risk profile before purchasing any investment. Directly investing in equities like Snapchat would be a greater risk strategy for your portfolio.  FAQs What are the different ways to invest in Snapchat? There are several ways to start investing in Snapchat. You can directly invest in the company by buying its stocks through an app, you can invest in the company indirectly by investing in mutual funds or ETFs that will buy the stock as a part of their portfolio. How can I invest directly in Snapchat? Yes, you can invest in Snapchat from India on the EduFund. Download the App, set up your US account for free without any commission or opening charges. You also get first year free on account maintenance. Once its set up, you can invest in all the top US stocks on your own! What is the current share price for Snapchat? The current share price for Snapchat is $10.

Millions of students from all over the world enroll in colleges abroad to broaden their horizons, develop their cross-cultural skills, and sharpen their language abilities. The majority of parents are devoted to paying for their child's overseas education and are ready to make personal sacrifices; this is true not only for primary and secondary school but also for postgraduate study. Even though this attitude is commendable, many parents are unaware of the costs associated with sending their children to an international university in the future. Countless students and their parents struggle to make their study abroad dream a reality due to poor or late planning and a relative lack of knowledge. Here are some financial planning strategies that parents may use to make their children's study abroad experience a little less stressful and a little more productive. With the help of these suggestions, you can assist your child in realizing their dreams while simultaneously preserving your long-term financial security. 1. Include cost forecasting in your plan Tuition is not the only cost of studying abroad. Your initial budget may increase significantly as a result of additional expenses such as student health insurance, academic materials, cost of living (housing, food, transportation), and entertainment. When creating your strategy, be sure to take these costs into account. Planning and budgeting are likely to go more smoothly if you anticipate increased prices and make additional savings as opposed to making smaller savings now in the hopes that they would be sufficient later. Adopting a pessimistic outlook will increase your prospects of building a future capital that is more than the real costs at that point. And the less you have to borrow at interest (like an education loan) when the time comes, the more you may give from your own savings or investments. This would not only reduce your overall debt load but also speed up your repayment process. 2. Consider long-term financial planning Planning is extremely important. As soon as you can, begin making plans for your child's international education. You may need to make certain personal sacrifices as a parent right now, so start looking at your spending patterns and reducing non-essential spending. Set aside money for your child's education, and do it regularly. Additionally, look at other options for saving and investing. Also, explore the places you might want to send your child as part of your financial planning in advance. Highly developed nations like the USA, Canada, the UK, Australia, and others are the most sought-after locations for higher education. The higher cost of living must be taken into account, and you must therefore include these aspects in your plan from the very beginning. 3. Consider inflation & exchange rates The US dollar has been among the strongest currencies in the world for many years, with practically all other currencies slowly losing value against it. You should anticipate that this will continue in the future for your currency as well. Therefore, regardless of when you intend to send your child abroad to study, you must account for inflation in your nation and potential depreciation of your currency in your study abroad budget. EduFund’s College Cost Calculator can help you figure out the average total amount you will require when you send your child to study abroad, factoring in inflation and exchange rates. Longer time frames provide you greater freedom to invest in high-risk assets like equity, which can assist you in the long term to fend off the impacts of inflation and currency rate fluctuations. 4. Find the best investment strategies Even though your child's international trip is years away, simply setting up an education fund with your current regular salary might not be sufficient to cover your child’s future needs. The living costs will probably increase from where it is today in the future. You need to start looking for extra sources of money right away that are separate from your (and your partner's) salary income if you want to lessen the impact of these potentially increased costs. As a result, you should look into medium- and long-term investment opportunities that you may begin making as soon as possible. Recognize your investment capacity and risk tolerance, and make investments accordingly. Our financial advisors can assist you in your search for mutual fund-based Systematic Investment Plans (SIP), education investment, or savings plans specifically designed for education. 5. Consult an expert investment advisor Most people find the process of preparing for an international study abroad to be intimidating. You can still feel completely unprepared with your action plan and strategy even if you start early, set a budget and a costing plan, and examine the many investment possibilities. Talking to a professional may be a good option if you feel stuck. You can explore your possibilities and create a more thorough and practical strategy with the assistance of our investment advisors and study abroad experts. You might even discover new choices that you hadn't previously known about or hadn't considered. Conclusion A study abroad plan for your child can include confusing aspects of financial considerations, but with systematic planning and a practical mindset, you and your child can both benefit in the long run from pursuing this desirable goal. FAQs What is the 50-30-20 rule? The 50-30-20 rule is the best budgeting hack. It means you use 50% of your income for expenses, 30% of your income for luxuries, and 20% for savings and investing. This is a disciplined way of investing and saving for your family's future as parents. What are the 5 tips for budgeting for parents? Create a monthly budget Invest a certain amount every month for future goals like a child's education or a home. Use calculators to set a goal. Use the SIP calculator to know how much to save, use the College Cost Calculator to know the future cost of education with inflation, etc Use new investment techniques like the 50-30-20 rule, the SIP method, or the lumpsum method! Create an emergency fund so your savings are not exhausted in any unfortunate event How to manage investments in 1 lakh salary? You can use the 50-30-20 rule to invest in your family's future. You can invest 20% of your income towards investments and savings like Mutual funds via SIPs or Lumpsum.

Post-pandemic online master’s degrees have become extremely popular. If you have applied for an online degree and are finding it hard to pay the fees, then here are some merits and demerits of opting for a personal loan for an online master’s degree!  From top universities like Harvard University, Oxford University, the University of Edinburgh, and Johns Hopkins University to online platforms like Coursera and SkillShare made accessibility to quality education easier and a great way to upskill. While some are free, there are some that charge a heavy fee. Depending upon the course, the average cost of an online master’s degree can go up to $29,000 (Rs. 23-24 lakhs).   This can be tough to finance independently as most banks do not offer education loans are not offered for online degrees. Some banks like Axis Bank do offer education loans for an online master’s degree. But space is still limited. Maximum banks and financial institutions only sanction education loans that require students to study on campus, and online degrees are not covered by them. Thus, if you are short on expenses, then you can opt for a personal loan for your online master's degree.   What are the merits of opting for a personal loan for online master’s degrees?  1. Zero Collateral   Personal loans are called unsecured loans and they do not require collateral from the borrower to sanction their claims. It is easier to get a personal loan as banks do not need you to give land, shares, or other bonds as collateral to claim. The approval largely depends on your credit scores, income history, and general eligibility or worthiness in terms of repayment. If the bank feels that you are not capable of repaying the loan, they are likely to reject the application.   2. Easy Sanctions  Personal loans verify the candidate’s worthiness, credit history, and financial stability. If you can provide an assurance to the bank that you are able and willing to repay then the banks are likely to sanction your loan faster. In terms of personal loans without collateral, your relationship with the bank, income stability, and financial background comes in handy for easy sanctions.   3. Easy Disbursals  Some banks disburse funds within seconds! Once your loan is approved and accepted, the banks can wire the money to your account immediately. Most personal loans and their lenders pride themselves on immediate and easy disbursements so that the borrower can finance their immediate needs faster. It may not be the case for all types of loans as each has its own processing period.   What are the demerits of opting for a personal loan for online master’s degrees?  4. High-Interest Rates  Interest rates vary from bank to bank and to lender. Personal loans are by nature unsecured which means the chances of getting a high interest rate may be higher. Beware of the interest rates, try to consult multiple banks before starting the application process. Having a good relationship with a bank and a financial history can help you.  5. Stress of Repayment   The stress of repayment is associated with every loan and is not exclusive to personal loans. Most borrowers struggle with repayment and may find it overwhelming at times. Having a stable income or savings can help you with the process of repayment. The cumulative interest rates and rising prices can make the job tougher but not impossible.  6. Eligibility Rigidity  Since most personal loans are unsecured, they focus largely on your credit score and financial history to sanction it. This can be a merit and demerit because a low credit score could jeopardize your application approval and make it tougher for you to gain the amount you want. Applicants are scrutinized more closely and any flaw could delay the process.    These are some merits and demerits of opting for a personal loan for an online master’s degree! An informed and well-rounded decision can help you pick the right path and help you secure a brighter future. FAQs Can you take an education loan for online degrees? Axis Bank offers education loans for online courses and executive courses that further your career. However, most banks do not offer education loans for online programs. Is it wise to take a personal loan for higher education? If you have the capacity to repay your loan on time then you can consider but it's wise to opt for an education loan for education purposes because it is made for meeting your education requirements. Should you opt for a personal loan in lieu of an education loan? No, education loans and personal loans are not the same. They can not be interchanged. Personal loans have a shorter repayment tenure, higher interests, and no moratorium period, and the loan amount offered may not be efficient enough to cover all your education expenses.

The simplest and straightforward answer to that question would be that offshore Funds are open-ended investment schemes that invest in mutual funds, stocks, real estate assets, equities, fixed-income securities, etc. in the overseas market.  Understanding Offshore funds Offshore funds are often referred to as international funds or foreign funds as they are based on offshore locations and have non-residents as investors. These types of funds provide investment exposure to global markets but they have to comply with the rules and regulations of that country. In India, both Indian residents and NRIs can invest in offshore funds either directly or through other funds under the purview of SEBI and RBI guidelines. The fund house has to comply with the set provisions and guidelines of the foreign country where they are registered. The Indian resident can invest only in Indian currency just like any other investment scheme.  You can: Select the offshore fund, Write a cheque for the amount due, Submit the cheque along with the application form to the fund house or online app you are applying through. Types of Offshore Funds “What are offshore funds?” is one of the most common queries of investors. In simple terms, it refers to investments that exist and operate abroad.  The different types of offshore fund schemes are -  Theme-based (real estate, power, energy, agriculture, etc.)  Region-specific (Asia, Europe, etc.), and  Country-specific funds (USA, India, UK, Australia etc.). Additional read: What are international funds? Advantages of Investing in Offshore Funds Investors can diversify their funds across geographical boundaries and choose the best available location for investing purposes. It is a golden opportunity to invest in global brands and business houses. The exchange rate difference will yield higher returns. Sometimes, the home economy is not so great but another country might be facing an economic boom. Investing in offshore funds will garner higher returns on investments at such times. Offshore funds are globally incorporated with lower regulation levels. As the income is tax-free it is profitable to reinvest the investment gains.  The operating costs and management fees associated with offshore funds are comparatively lower and financially beneficial. Offshore funds can safeguard the capital from the burden of high taxes in the home country Disadvantages of Investing in Offshore Funds Offshore funds require higher investments, which every investor cannot afford. If the offshore currency is facing a downward trend then it will lead to lower returns. The risk factor associated is greater compared to domestic investments. Investors have to trust the foreign fund houses to explain the terms and conditions. In case of any discrepancy or fraud, it can result in a loss of capital. Tax laws, economic policies, and market fluctuations of both the home country and the foreign country will harm the returns. Things to consider before investing in Offshore funds Research the economic and political conditions of the foreign country where you want to invest. Start with a small investment and gradually increase the investment.  Opt for financially stable investment funds at the onset. Check the fund's reputation, the background of the fund house, and historical returns thoroughly. Choose funds that will help to cash in global opportunities. Consider the currency risk while dealing with international funds. Any currency fluctuation will impact the Net Asset Value of the fund directly because if the value of the rupee depreciates against the dollar NAV will be higher and in case it appreciates earnings will become less. Invest in developed and emerging markets only. Choose long-term investment as it is considered best for minimizing the impact of inflation. Foreign funds are treated under debt thus taxes are levied as per the tax rules in the home country. In India, residents have to pay tax on overall income even if it was generated in a foreign country.  Invest in funds with utmost security and transparency in the transaction process. Challenges associated with Offshore funds in India The RBI and SEBI guidelines do not allow fund managers based in India to manage offshore funds. The investment inflows to India are now managed by offshore authorities and this poses a serious challenge to the growth of offshore funds in India. According to new guidelines REITs and AIFs are allowed to receive investments from foreign investors.  Conclusion By now the concept of what are offshore funds will be clear and you must have realized that these funds follow a different path in terms of rules and regulations compared to the standard investment journey.  It is imperative to sound a word of caution for investors of offshore funds as these are prone to fraud and high risk quite often because of relaxed regulations. Beware and take the help of reputed platforms like EduFund App which will act as a guiding tool in securing safe transactions in overseas markets. FAQs What are offshore funds? Offshore funds are open-ended investment schemes that invest in overseas markets, including mutual funds, stocks, real estate, equities, and fixed-income securities. Who can invest in offshore funds in India? Indian residents and NRIs can invest in offshore funds, complying with SEBI and RBI guidelines. Investments are made in Indian currency. What are the advantages of investing in offshore funds? Benefits include global diversification, investing in global brands, potential for higher returns, tax advantages, and lower operating costs. What are the disadvantages of investing in offshore funds? Disadvantages include higher initial investments, currency risk, increased risk compared to domestic investments, reliance on foreign fund houses, and exposure to changing tax laws and market fluctuations. What should investors consider before investing in offshore funds? Factors to consider include economic and political conditions of the foreign country, starting with small investments, choosing reputable funds, understanding currency risk, and ensuring transparency in transactions. TALK TO AN EXPERT