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Personal Finance - Avoid errors while making investments
12-Apr-2011
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The new financial year has set in, and it is time to draw up your investment strategy - both for saving taxes and creating wealth. While suggestions fly in from all directions on the right instrument for investing, seldom do these recommendations include advice on avoiding certain clerical mistakes that could wreck your plans later.

These seemingly minor errors could potentially create major hassles at the time of enjoying the fruits from your investments . For instance, say you are investing in more than one fund managed by the same fund house. Here, you need to ensure that all your investments are listed under the same folio as your first investment with this fund house. For the purpose, you merely need to key in the folio number of your initial investment when you choose to put your money into another fund managed by the asset management company.

In case you fail to do so, it will only add to the paperwork - like multiple account statements - that separate folios involve. Also , consolidation of various funds under a single folio will give you a more complete picture of your asset allocation. This, in turn, will help you plan your future investments better. Similarly, if you have chosen the direct credit facility for receiving mutual fund redemption proceeds directly into your bank account and have not entered the core banking account number, the direct redemption process may face hiccups.

Therefore, make sure you provide an accurate core banking account number, or update the fund house if you haven't furnished it initially , for a hasslefree crediting of the maturity proceeds into your account. Another popular avenue, Ulips, too deserves attention not only at the time of selecting one, but also while filling up the forms.

You must always insist on a signed copy of the benefit illustration, which gives an indication of the returns and other benefits the fund will yield at maturity, from your agent. It is mandatory for life insurance companies to provide this copy. Your agent may promise the sky, but this document will acquaint you with the ground reality and thus help prevent a wrong decision based on a mistaken premise.

Source : www.insuremagic.com back