Money on the markets

A maturing market amid the mayhem

Creating your own capital protection plan


Falling bank deposit rates have left investors with fewer options to invest, especially those who are not willing to risk their capital for some extra returns.

In the current scenario, such investors can look at creating a capital protection plan on their own, which can safeguard their capital and possibly earn higher returns with some exposure to equity mutual funds.

One way this can be done is by investing in the monthly income scheme (MIS) offered by post offices across India, which gives an annual interest of 8 percent, as against the bank deposit rates which are now around 6.5 percent for 1-year period.

Along with capital guarantee and the 8 percent annual return, a 5 percent bonus on your invested amount on maturity after 6 years acts as an icing on the cake. On the flipside, just like bank deposits, the interest earned on MIS is completely taxable.

Tax saving with safety locked in


pixSome of the best advice often comes from the most unlikely of sources.

Years back, while on a trip to Jaipur, I had run into a rather energetic man who insisted on jumping the queue at the post office. When requests failed, I asked him why he was in a hurry.

“I have a savings account here,” he said proudly in Hindi, clutching a dog-eared booklet with currency notes tucked in. Ram Prasad, the 42-year-old cycle rickshaw driver had his way and left flashing his stained teeth.