Way2Goals team’s blog

Summary of features and benefits user can get from Way2Goals site

Way2Goals has developed a simple application which allows one to find the best Fixed Deposit scheme to match their needs. Various combinations such as duration, age group, investment amount, tax, inflation rate can be altered according to each individuals needs. We have covered over 650 Fixed deposit schemes from Public Sector, Private Sector, and Foreign Banks. Our site allows one to see the value of their investment on maturity. It shows real value of the money after accounting for inflation and taxes.

One more application allows one to check bankwise interest rate along with Branch locator, phone numbers of Bank, form download, cross checking current interest rate of a particular bank and effective date on a single page. The data is updated twice a week. All of this absolutely free!

The website has predefined reports. For e.g. the maturity values for a deposit of Rs 1 lac for a period for three years in different banks showing the Best FD at the top.

The applications are easy to use. The URL for the main website is

http://www.way2goals.com

The news feeds cover four topics:

Business
Banking
Technology
Gold (prices)

These are updated on an hourly basis.

We have plans to extend the platform for users to choose home loan, NRE deposits and other financial products in future.

National Pension Scheme

Meek response to the National Pension Scheme.

The new pension scheme which was launched with much fan fare on May 1st 2009 has received a meek response only 500 people have so far availed of the scheme.

There is a very good artilce in 16th June 2009 Business Line.

Enliven the new pension scheme written by Vivek Vasal

posted by the way2Goals team.

Company Fixed Deposits

The interest rates likely to continue the downward trend for some more time. So, are there any other alternatives available to the investor in Fixed Income category?

Yes, company fixed deposits are an option, but they are unsecured and more riskier than Fixed Deposits in Banks which are secured by the DICGC for up to 1 lakh per account.

You can find more information about the company fixed deposits at the following URLs.

Bajaj Capital Fixed Deposits

Crecent Financial Services

It is better to understand the credit rating of the company, Tax implications, Tax deductions and other factors before making a final decision.

Lapsing insurance policies

It is quite sad to note that insurance polices in large numbers are lapsing according to the information available with IRDA.

What does this mean?The biggest loser when an insurance policy lapses is the buyers of the policy. The insurance company loses it’s customers. It is also bad for the insurance agent as all the effort done by him/her does not reap him benefits in future. All future commission the agent was expecting from the policy will not be realiazed.

Why should I care?

It is better to understand completely the pros and cons of the policy and see if the policy really is suitable for the long term goal of the person. As per the article 28% percent of the term life insurance policies lapsed last year. Which in effect mean that approximately 1-3 policies term insurance policies bought last year lapsed. This is a large percentage of people who are letting their policies lapse.

High lapse rate seen in term insurance.

Why there is difference in Interest Rates for the same term? Does not RBI fix the rate of Interest?

The Reserve Bank of India, does not directly control the rate of interest. It uses, it power to change the rates of interests for the deposits of the Bank with itself and the rate it charges bank for the short term funds banks borrow from the RBI.

The Bank deposit rates are determined by the each bank seperately, based on it’s own needs of funds. If a Bank needs funds for the short term, it will try to attract more funds by offering a higher interest rates for the short term deposits and lower interest rates for the longer term. Also, competition ensures, that market rates between banks do not vary too much.

Traditionally, Indian investors, tend to bank with one to two banks at most. They do not try to find the best bank to match their needs. But, the trends are changing and most investors are now inclined to make the most of the savings they have without increasing their risk. It is possible to do so now, as the number of banks and their reach has increased over years.

Why does the Best Fixed Deposits talk about Inflation? How does it affect me?

One of the goals of the website, is to highlight the impact of inflation on the purchasing power of a person. The inflation adjusted return shown on the best FD is the actual return. Which means that if you consume say 100 kgs of rice this year and the current price of rice is Rs 40 per kg (Total of Rs 4000). Next year due to inflation of say 9% the same 100 kgs of rice will cost you Rs 43.6 per kg and a total of Rs 4360). So if you are getting interest of Rs 9500 on your investment of Rs 1 Lakh and hope that it covers, your basic cost of Dal and Rice and other essential, your assumption could be wrong as the cost of these items would have gone up and your goal should be make investments to ensure you beat inflation so that you can maintain your standard of living.

These days, you must have read that inflation is coming down and we are at the risk of de-inflation, but as per the RBI report the latest consumer price Index Inflation is 9.5% as of Jan 2009 vs Jan 2008. In fact the basic cost of commedities such as rice have gone up by by over 50% in the last one year.

In fact we would like you to tell us what is your experience? Have the prices of consumables you consume gone up or down? by how much? Please share your experience and we will share it the world to generate our own CPI for difference communities.

One of the main reasons I started this site, is to help people understand the importance of other asset classes than bank fixed deposits.

I do understand that a large number of retired persons especially from the private sector, depend on the interest earned from fixed deposits. I strongly believe, that even retired persons have to invest a small portion of their investments in assets classes such as equity via mutual funds to beat the inflation.

The real returns for Fixed Deposits, is very low and is fact negative for the last one year or so.

There is one very good article, on possible asset allocation for different requirements at the amfi investor education site.

How does Way2Goals site help me?

At way2Goals we are commited to providing useful tools to help people make informed decisions. As a first step we have developed an application, choose best fixed deposits. This allows one to choose the time horizon of the fixed deposit, bank category, age group, tax bracket, bank category, investment amount, inflation.

Way2Goals shows the interest rates offered for the age groups from among the 54 banks that we are covering at present. Each of the Banks listed here is DICGC (Deposit Insurance and Credit Guarantee corporation a 100% subsidiary of Reserver Bank of India) registered. Which means that total investment in these banks is insured for upto Rs 1 lakh in these banks.

After you choose the bank and the scheme we show the maturity value of your investment and the real return after accounting for taxes due. The idea is to reduce your work and show your real returns after adjusting for taxes and inflation.

The information of the site is updated weekly and is obtained from the website of the respective banks. Please note that in the current dynamic situation, it is possible, that there could be lag between the interest rate revision and updated information on the website of the bank and there by in our site.