Following requests from our readers, here's a comparison of costs between Gold-ETFs and the National Spot Exchange's e-gold in the table attached. E-gold is the de-mat form of buying gold where physical delivery is allowed- tax treatment here is thus similar to that of physical gold. Gold ETFs are taxed as per provisions made for non-equity MF schemes.

Duck the dupes

Ever got an SMS, letter or email about how you are the ?lucky' one to win a whopping 25,000 pounds in some global sweepstake? RBI has issued an advisory last week cautioning people against responding to such offers, which usually require you to first remit a sum abroad by way of a ?token'. Complying with this can make you liable to punishment. According to RBI, ?such remittances are illegal and any resident in India collecting and effecting/remitting such payments directly/indirectly outside India is liable to be proceeded against for contravention of the Foreign Exchange Management Act, 1999. They would also be liable for violation of regulations relating to Know Your Customer norms/Anti Money Laundering standards.?

SBI hikes rates

State Bank of India 's decision to hike its lending rate by 0.25 per cent would mean an additional Rs 132 outgo in EMIs on Rs 10 lakh individual loans with a 10 year maturity. With SBI hiking rates by 0.75 per cent in less than six months, borrowers face an additional burden of around Rs 400 for the abovementioned loan. However, SBI seems the least aggressive with most banks hiking their lending rates by at least 100 bps.

Most of the banks have increased their lending rates after RBI raised the policy rates by another 25 bps. The base rate, which acts as a floor rate below which SBI cannot lend stood at 8.25 per cent from 7.5 per cent in the last couple of quarters. Post-hike the special deposit schemes such as "the 555-day deposit" and "the 1,000-day deposit" will have a coupon rate of 9.25 per cent as against 9 per cent earlier. The rates on a less than 30 lakh home loan, post-hikes, would work out to 8.75 per cent and 9.5 per cent for the first year and the second and third year respectively. Beyond three years, the rate rises to 9.75 per cent.

100 bucks for SIPs in gold!

Investors without a demat account are currently constrained from buying gold ETFs. Reliance Gold Savings Fund helps overcome this limitation by helping invest it in a gold exchange traded fund, namely Reliance Gold ETF. The fund can be bought through the usual physical application mode of buying mutual funds or through the online route directly through the AMC's website.

Another key feature of the fund is the option to either invest money in lump sum or route investment through the systematic investment plan (SIP). The fund allows SIPs as low as Rs 100, a sum with which neither a unit of gold ETF nor gold can be bought today. SIPs in gold holds more relevance in recent times, given the volatility witnessed in the last two years. The new fund offer closes on February 28. An exit load of 2 per cent will be charged for redemptions made within one year.

A new fund for education

Max New York Life Insurance has launched ?Max New York Life College Plan', a guaranteed money back child plan to help parents create a corpus and meet the fast increasing costs of higher education. The new plan would help takers start planning from the age 0 to 8 years of their child. It would provide guaranteed returns pegged at 120 per cent of sum assured, from the age of 18 to 21 , the college going years. The plan also provides an assured amount every year till the child attains 21 years of age. The payouts are made in the college going years. In case of unfortunate event of death of the payor, Max New York Life will continue to operate the policy until its maturity.

(This article was published on February 19, 2011)
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