Page 6 - Guide To Personal Finance

Stop revolving credit card dues and replace with lower-cost debt

"Credit cards demand responsible usage. Due to high interest rates, late payments on credit card bills can snowball, pushing you into a debt trap," says Adhil Shetty, CEO, BankBazaar

Cashless claim denied? Bank on credit card, pledge gold or fixed deposit

Keep some emergency cash at home and ensure your credit card limits are adequate

Fear the market turbulence? Ulips will keep your investment safe

Some insurers have been advertising their mid- and small-cap funds heavily. Some distributors and agents have also piggybacked on the popularity of mutual funds (MFs) to sell Ulips

Engine protection cover: Must-have in areas prone to heavy rains

While traversing a flooded road, water can enter engine, causing damage. This is usually not covered by comprehensive policies. To get this coverage, customers need to buy the engine protection cover

Mutual funds or NPS? Go for both if you don't mind latter's lock-in

MFs offer investors access to a wider range of assets (gold and international funds), fund houses and fund managers. Barring ELSS, the open-ended funds offer anytime liquidity

Business and economic cycle funds: Dynamic style provides the edge

Business cycle funds invest in themes expected to do well over the medium to long term, such as digital businesses, prem­ium­isation of consumption, and urbanisation

Switched jobs? Align multiple Form 16s for accurate income tax filing

Also ensure that Form 16 and Form 26AS contain identical TDS details

Gratuity explained: Delay in payment? You are entitled to receive interest

Organisations with 10 or more employees over the past year must pay gratuity. In non-mining roles, a year consists of 240 working days; in the mining sector, it is 190 days

Fix mismatches between Form 26AS and 16 before income tax filing

Form 26AS is a consolidated tax statement showing taxes deducted, tax credits, income sources, and tax deducted at source (TDS) and tax collected at source (TCS)

Don't chase past performers in equity markets, build all-weather portfolio

The bottom line: switching strategies does not boost returns

Special situation funds: Ideal for high-risk investors with long horizon

These funds at times invest in companies going through corporate restructuring, such as mergers, demergers, or buybacks

Retirement MFs: Equity allocation, flexible withdrawal options key benefits

Stay invested even after lock-in ends to gain from compounding

New mutual fund investors: Set goals and assess your risk profile

Knowing these parameters will allow you to determine the optimal asset allocation, essential for building a portfolio

Select a smart-beta fund based on your risk tolerance; restrict exposure

Aggressive investors may choose momentum-based factor funds

File tax return in mid-June, once all necessary information is available

Only taxpayers with single source of income or simple finances should file early

Sequence of returns' big impact on final corpus

Sequence of returns can dramatically affect the longevity of a retirement corpus, especially if retirees have to withdraw more during market downturns early in their retirement

Have some risk appetite? Invest in highly rated company fixed deposits

While they offer higher returns than bank FDs, they are not protected by deposit insurance

Beware of parcel fraud: Suspect a scam call? Disengage immediately

Verify the call's authenticity; resist pressure to pay up or share sensitive information

Choose Aadhaar-based KYC: Once done, you may invest across fund houses

Keep Aadhaar, registered mobile number and scanned documents handy before starting online procedure

Amid varied risk levels, review portfolio before choosing credit risk fund

Only investors with high risk appetite should opt for them; limit allocation to 5-10%