You must’ve heard about value stocks. Many people claim that it is an effective investment option for long-term investors who yearn for profits with minimum investment. So, are you planning to invest in value stocks? Do you wish to know everything about value stocks? Then, you are in the right place. This post will address all your questions related to value stocks. So, let’s get started!
Value Stocks: The Ultimate Guide for Right Investing
Here’s everything you should know about value stocks:
What are value stocks?
The value stocks are the stocks that fall into the under-valued category of the stock market. In simplest terms, a value stock is a finance component that trades at a cheaper price relative to fundamentals of corporate performance such as sales, earnings, book value, dividends, or cash flow.
The main supposition of investing in value stocks is that the market will gradually realize the true potential of value stocks, and the price will be back on the track gradually thereby resulting in enormous profits. The term ‘value investing‘ (investing in value stocks) is, therefore, a premise-based approach.
How does value stock work?
The basic concept of buying and selling is used in value investing. For instance, you know the actual price of a product and you buy it at a discounted rate. Later, you sell it at a higher price than its actual value and earn profits. That’s exactly how value stocks work.
An investor first identifies the best value stocks. Then, he/she buys it at a rate lower than market value and holds it until it’s value reaches its actual value. Then, he sells them to earn profits. In the whole transaction, value stocks were the same only their value fluctuated.
Let’s understand it with an example: Whether you buy a TV at a discounted price or full price, it won’t change its specification like screen size or its picture quality. But, you are benefited from buying a TV at a discount. Isn’t so? The same concept applies to value stocks. When you buy a stock at a lower price than its intrinsic value and sell it at a higher price, you will earn a profit. However, sale or discount offers are not advertised in case of stocks as in case of any appliance. Being an investor, you need to discover the best value stocks that are currently cheap, and that can amplify your future profits.
How to identify undervalued stocks?
Some indicators can assist you in finding stocks that are undervalued at a particular point in time. However, these metrics are not the all-end-all to determine the best-valued stocks, but they can provide you some signs that may benefit potential investments. They are as follows:
- Low P/E: Every company has a Price/Earnings (P/E) ratio. If the P/E is higher, it means the price of the stock is higher relative to the earnings. Lower P/E ratio may indicate the buying opportunity.
- Lower share price: If the company’s share price is lagging in comparison to those of its industry peers, this may indicate the under performance situations.
- Low PEG: Taking into account only the P/E ratio is not so accurate and you can consider the PEG (Price/Earnings Growth) If it is less than 1, then it can benefit investors.
- High dividend yield: If a company’s dividend yield exceeds that of its industry competitors, then it may indicate the gliding of share price into the undervalued zone.
Pros of Value Stocks
Value investing is a long-term investment approach; therefore, it’s crucial to know its pros and cons to make the best out of it.
It is not limited to wealthy people
One of the biggest advantages of value investing is that one can do it successfully irrespective of his/her financial income, educational status, or background. Anyone enthusiastic to work hard by investing a great deal of patience and time can fully access value investing.
Since this approach is all about waiting for the right time for the price in the market to achieve long-term benefits, patience is a very crucial factor to pin down your success. Being an analytical investor, you need to be prompt enough to learn and able to read, access, as well as understand the fundamental information of a company. These things are very important to make value investing successfully work for you.
Allows leveraging compounding power
By reinvesting the returns and dividends that you earned from your value stocks, you will witness an exponential growth in your profits gradually. You will eventually earn from your earnings without any need for extra work or efforts. Therefore, value investing allows you to leverage the benefits of compounding power.
If you think that your initial returns are not so momentous to provide you a long-term benefit, then you are wrong. Even the smallest of the amount can rise effectually with the investment of sufficient time and patience.
Possesses minimal risk
In comparison to the short-term investment strategies, the approach of value investing is subject to minimal risks. It is one of the greatest pros of value investing. You need not stick yourself in the whirlpool of frequent market fluctuations because you are neither purchasing stocks today, nor are you selling them tomorrow. Moreover, there is no need for expending time to monitor the performance of your stock holdings, as this performance is based on a long-range approach.
Do you know that short-term selling and buying of stocks are one of the major reasons for the investor’s loss? Owing to the fluctuations in market events, investors usually take decisions hurriedly and emotionally.
The probability of such losses is very low in long-term investments such as value investing. Being based on the strategy of buy and hold, value investing allows you to have sufficient time to make decisions soundly, thus reducing the potential risks.
The finest way to earn profits
By selecting a stock that is undervalued but backed up by the financially strong companies that possess future growth potential, you can leverage long-term profits. Therefore, value investing is one of the best ways to gain maximum benefits from the stock market.
As value investing is entirely based on choosing the undervalued stocks or stocks at discounted offers, it provides you with the opportunity to own the inexpensive shares of various enterprises that are subject to bounce back and bash the market. Moreover, this strategy of long-term investment is least affected by the market dips and it will not spend your earnings in several trading processes such as moving in and out of the short-term stock holdings.
Cons of Value Stocks
The downsides of value stocks are:
No room for emotions
Humans are more prone to make decisions on an emotional basis, but this usually results in the investor’s downfall. While you are value investing, there is no space for emotions. This requirement of value investing makes it challenging for the investor to adopt such a mindset for a longer period.
An investor’s mindset wipes out the emotions of fear and greed, and his decision-making process is purely based on factual data rather than gut feeling. Therefore, adopting an investor’s mindset is quite challenging. In addition to learning to analyze the business’s fundamental information, an investor should always follow two rules. The first one is: don’t lose money, and the second one is: to always remember the first one.
Requires a great deal of patience
Value investing is definitely a time-consuming strategy. It’s not a shortcut method and certainly not an easy-peasy one. It requires exhaustible efforts and enormous time. Therefore, if you are willing to do the hard work with a great investment of patience, then only you can be successful in implementing this approach.
Sometimes, it can take years to see your stocks rising in value. Value investors usually notice only some minute changes in the value of their stocks. This is certainly not an exciting process for those who yearn for big returns quickly. Waiting to see the results of your laborious efforts and work requires a great deal of patience.
It’s not easy to predict
One of the biggest disadvantages of value investing is difficulty in precise estimation of a company’s intrinsic value. Investors can use a plethora of different methods for this task, but they require a significant level of expertise. As every investor doesn’t possess a strong financial background, it may be challenging to accomplish this task.
While choosing the best value stock, an investor looks as well as analyzes the fundamental information of the enterprise such as earnings, cash flows, debts, projected revenues, etc. However, even this hard data can’t always elucidate the unpredictable or unexpected factors such as evolving market styles and competition.
Are Value Stocks Worthy?
This is the most debated question and its answer varies from investor to investor. When chosen meticulously, value stocks can prove worthy. Investors should always make their decisions based on their financial goals, personal researches, and risk appetite. He/she should be watchful of the “best stocks for the year” lists displayed by media platforms and should use wisdom to select the best one.
It is mandatory to visualize prospects as well as the inherent risks associated with the industry. Most importantly, the potential investors must keep in mind that value investing is a long-term approach; hence, ensure to be prudent while selecting the company’s stock to reap beneficial results.
When it comes to investing in the share market in India, it’s not just about finding the best shares to buy in India. Before you can invest money in the share market in India, you need to do the following:
How To Invest in the Share Market in India: Things To Know Before You Start Investing
Get a PAN or Aadhar card
In order to invest in the share market in India, investors have to have a PAN card or an Aadhaar card. Whenever an investor wants to open an account with the Securities and Exchange Board of India (SEBI), which is the market regulator, he/she needs to complete a Know Your Customer (KYC) procedure. Investors will also need to furnish a six month bank statement and submit a cancelled cheque along with it. These rules were added as a part of the Government of India’s new regulations on opening a demat account and investing in the stock market.
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Get a broker
Whenever you want to invest in the stock market, you can’t just directly go to the stock market and start buying and selling stocks. That process can only be done with the help of designated stock brokers. Brokers can be individuals, companies or agencies that have been authorised by the SEBI to trade in the stock exchanges of India. Every time a broker carries out a trade for you (buying or selling), they charge a percentage of the trade value as commission. That commission is known as “brokerage”.
Get a demat account
After you have got yourself a broker (individual, company or agency), your next step towards investing in the share market in India is to get yourself a demat and trading account. A demat account does the job of holding the stocks that you have purchased and it will reflect them in your name. The word “demat” means “dematerialized” as shares can’t be held on a physical form and they are stored in a demat account in their dematerialized form.
Are stocks the easiest way to build wealth?
The stock exchange has fascinated people for over a century now. Stocks are even seen by many as the quickest way to get rich. However, there are indeed only a few investors who see the stock exchange and stocks using the right perspective. To most, these are just tickers of prices going up and down. If your ticker goes up, you make money. If it goes down, you lose. That’s both the start and the end of the story. Just finding the best shares to buy in India is not enough. You need to do more than that.
The thoughtful investor is very discerning. He/she looks at stocks not even as quotes rising and down, but as real, live businesses in action. Go one step further and one realizes that stocks are often among the very best asset classes to take a position in. They are a vehicle and mechanism that provides ordinary individual investors with some amazing advantages and opportunities. Advantages that are unparalleled by just about any other asset class.
Are stocks the easiest way to build wealth?
If you want to know which are the best stocks to buy in India, you must be interested in investing in the stock market. Here are six reasons why you should start investing in stocks as soon as possible:
Opportunity to have an existing business
Once you buy a stock, you get to shop for a stake in an already existing business with the large advantage that business already has all its employees and infrastructure in place, and is already up and running. You straightaway get a claim on the business’ future profits (in your proportion of ownership) without any of the headache or effort involved in running it.
When you buy stocks, you can immediately sell them to generate cash flow. Doing so is as easy as making one call or clicking a few times with your mouse.
An astounding number of choices
You’ll buy as long as you actually like something. It would be a truism to say that you will try to find the most profitable business being sold at the cheapest price. But the point is that the stock market puts you in a position where it enables you to make such a choice.
Little money required
Think about this. Even if you feel like opening a tiny grocery store down the street, you’ll need to stake a considerable amount of cash on the success of only one venture that may or may not take off as planned. Compare this to purchasing a stake within a successful business within the stock exchange. You can get a piece of the action with even just a few hundred rupees, let alone lakhs and crores.
No hassles of negotiations and brokerage
With stocks, the price is right there for you to see. No hassles of negotiating with the opposite party. The brokerage is typically pretty low too (usually a maximum of 0.5%). This helps ensure that a substantial part of your investment is not eaten up by frictional costs.
The prospect of a higher return
One thing at the very core of choosing to run a business instead of investing your money in a bank fixed deposits the expectation of higher returns on your investment. Thus, businesses usually strive to earn returns much above your run-of-the-mill investments. The trick is to buy a stock that has shown that it can accomplish the above with reasonable certainty, and to buy it at a good price.
But is the stock exchange an honest Place to take a position These Days? The stock market is like a maze. You need a blueprint to navigate it successfully. Without a blueprint in hand, investors must rely on hearsay. Usually, from other uninformed investors. It’s a case of blind leading the blind! And none of them even recognize they’re lost.
When it comes to investing in the stock market, that is definitely one of the worst ways to do it. And you don’t have to do it this way, there are better ways.
You must first find a successful, tried-and-tested blueprint for stock investing. Spend some time understanding this blueprint. Then, and only then, take the plunge.
You need to know what to do. You need to know how to do it. You need to know when to do it. Only then can you expect to make money in the market, and keep it too.
What are some basic things to know before investing in the share market in India?
Investing: All is in the process
With the Indian stock exchanges at their volatile best (or worst), these are indeed difficult times for investors. At every rise, participants take the chance to book profits, with the prevailing sentiment being so far apprehensive. In such times, what might be the simplest strategy to use as a long-term investor?
The process of investing should have some hard and fast rules. If you follow a disciplined process of investing, you’ll accumulate significant wealth over the long-term.
Assess the time horizon – are you a trader or an investor?
If you’re an investor, do you possess the patience along with the ability to keep your emotions in check?
Have you done the required amount of research and studied the stocks that you are planning to invest money in?
The above is an indicative process to use while going about investing in equities. It’s necessary to take a position consistent with a disciplined process, and this is often the simplest method to make money in any market, bull or bear, across economic and market cycles.
What are the factors that longer-term investors must check out while taking an investment decision?
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Undoubtedly, the very very first thing that any investor must check out is that the business/sector that the corporate operates in.
The management is another extremely important factor to think about before investing in any company. At the top of the day, it is the management that will be the driving force behind the future direction and success (or failure) of the company.
Competition in the industry
The company’s competition is another major factor that you simply as an investor should check out before deciding to shop for (or to not buy) that company’s stock.
This, of course, is one of the major factors that most investors already look at. It includes doing an in depth study about the company’s financial position and performance over a fairly long period of your time. Such a study is usually referred to as ‘fundamental analysis’.
Dividends are a sort of income from shares and regular dividend-paying companies do provide some comfort as long as their profits and cash flows are stable enough for them to stay paying dividends each year.
And finally, the last step in deciding whether or not to buy a stock – the valuation phase. While the business model, management, fundamentals, and market positioning of the company may be the best, if the stock is trading at valuations that are unwarranted, then it is not worth buying the stock.
At the end of the day, most seasoned share market investors will agree that investing in shares is all about conviction – if you’re not convinced about the corporate, then don’t stake your hard-earned money.
Where to get info on Share Markets in India?
You have probably received stock tips and proposals from your brokers, friends, and family. When asked about the reason behind the decision, the person usually cites some “reliable” source. Investors make decisions based on certain factual information. Subsequently, they make future assumptions based on, and in support of, those facts. As such, knowing how an industry and a corporation functions is extremely important. In addition, it’s equally important to acquire such information from proper and reliable sources.
Here’s a basic idea of where you’ll set about trying to find information on companies you would like to take a position in:
One of the simplest sources for understanding a specific sector or industry is the offer document furnished by the company. As all the disclaimers in the ads say, please read the offer documents carefully before investing.
Just in case you can’t get a hold of the company’s offer document, as long as the company has been listed on the stock exchanges for long, the annual report can come in really handy.
BSE/NSE announcements and company press releases
Aside from annual reports, it’s the official company documents like press releases, announcements, and presentations which are released in regular intervals. The source for such information are the BSE or NSE websites along with the company’s website.
Business dailies and other media
Newspapers and news channels are an excellent medium for gaining updates on companies. Interviews with management provide good information on the company’s views, plans and strategies.
How can you keep your wealth intact?
There are a lot of asset classes that can help people protect and build on their wealth. Of course, it should be as per the investor’s risk appetite. Here are the types of stocks you should use:
It’s always good to keep some cash in hand so that you can buy good bargain stock in the event of a market collapse. Investors should keep anywhere between 10-40% of their investment portfolio in cash.
Gold is a great insurance policy for those times when the market goes bust. Have at least 5% of your assets invested in gold.
Clearly, there’s no bigger relief than watching the roof over our heads become debt free. So try to invest a little bit in property as well.
Bonds are a great financial tool to protect your wealth against inflation to earn a fixed rate of return. You can get assured returns with almost negligible risk.
Safe stocks are stocks that have strong fundamentals and capable management. Hence they usually perform well.
So as you might have seen by now, investing in the Indian share market is not as simple as typing “best stocks to buy in India” on the Google search bar and starting investing immediately. Follow the tips shared in this post and do the required research. Happy investing!
When it comes to the Indian economy and the stock market, most people would assume that the highest priced stocks would belong to companies like Tata, Reliance India Limited, Maruti Suzuki, etc. However, once you go through our list of the costliest shares in India (based on the prices on July 24th, 2020), you will find that the highest share price in India doesn’t belong to those companies. Our list is based on the price of the shares but these are also some of the best shares to buy in India if you are looking to invest. Without further ado, let’s get started.
Here are the 11 Costliest Shares in India
1. MRF Limited – Stock price: Rs. 62,900.00 (24 Jul, 3:30 PM)
BSE: 500290 | NSE: MRF | SERIES: EQ | ISIN: INE883A01011 | SECTOR: TYRES
Founder: K. M. Mammen Mappillai
Founded: 1946, Chennai
Revenue: 22,683.87 crores INR (US$3.3 billion, 2017)
Famous Indian tyre manufacturer MRF holds the distinction of being the most expensive stock in India. The costliest share in India trades at almost Rs. 63,000 per share (the highest share price in India by far).
Madras Rubber Factory(MRF) Limited is the largest tyre manufacturer in India and it has global operation as well, making it the fourteenth largest tyre manufacturer in the world.
MRF started as a rubber balloon factory with a funding of Rs. 14,000 by KM Mammen Mappillai in 1946. MRF holds the distinction of being the most expensive share in India. MRF specializes in Car & bike tyres, trucks/buses tyres, LCV & SCV (light & small commercial vehicle) tyres, farm services & OTR tires.
2. Honeywell Automation India Ltd: Stock price: Rs. 27,768.00 INR (24 Jul, 3:30 PM)
BSE: 517174 | NSE: HONAUT | SERIES: EQ | ISIN: INE671A01010 | SECTOR: TELECOMMUNICATIONS – EQUIPMENT
Headquarters: Burbank, California, United States
Subsidiaries: Honeywell & Co. Oman LLC, MORE
Parent Company: Honeywell International Inc., Charlotte, North Carolina, USA
As far as the costliest shares in India are concerned, Honeywell comes second in the list. Honeywell is the second most expensive stock of Indian share market. The second most expensive share in India trades at a price of around Rs 28,000 for every Share
Honeywell Automation India Limited is a company which deals with the manufacture of electronic systems and components; repair and maintenance, and trading of machinery, equipment and supplies. Honeywell is a popular consumer electronics company that makes products such as air purifiers, air filters, surge protectors, and bar code scanners. The company has one of the highest share prices in India consistently.
3. 3M India Ltd.: Stock price: Rs. 21,499.00 (24 Jul, 3:30 PM)
BSE: 523395 | NSE: 3MINDIA | SERIES: EQ | ISIN: INE470A01017 | SECTOR: DIVERSIFIED
Headquarters: Bangalore, India
Subsidiaries: 3M Innovation (Thailand) Co. Ltd, 3M Saudi Arabia
Parent Company: The 3M Company, Saint Paul, Minnesota, USA
The third costliest share in India, 3M India Ltd trades at a market price of around Rs. 21,500 for each stock.
The third most expensive stock of the Indian market is the Indian arm of the world famous adhesive product manufacturing company, 3M (founded as the Minnesota Mining and Manufacturing Company in the USA). The company behind the third most expensive share in India is fundamentally a science-based company. It has a vast array of imaginative products and is the market leader in multiple categories, ranging from health care and highway safety to office products and abrasives and adhesives. It consistently has one of the highest share prices in India.
4. Shree Cements Ltd.: Stock price: Rs. 21,280.00 (24 Jul, 3:30 PM)
BSE: 500387 | NSE: SHREECEM | SERIES: EQ | ISIN: INE070A01015 | SECTOR: CEMENT – MAJOR
Revenue 58.58 billion INR (US$820 million) 2013-2014
The fourth costliest share in India, Shree Cements Ltd trades at Rs. 21,280 per share.
The company behind the fourth most expensive stock of the Indian market, Shree Cements Ltd. is a leading cement and power producer in India. Shree Cement is primarily an Indian cement manufacturer. Before becoming the fourth most expensive share in India, Shree Cements had humble beginnings in Beawar in the Ajmer district of Rajasthan in the year 1979. The company has its current headquarters in Kolkata and is one of the biggest cement makers of North India. The company produces and sells power under the brand name Shree Power and Shree Mega Power.
5. Eicher Motors Ltd. : Stock price: Rs. 20,830.00 (24 Jul, 3:30 PM)
BSE: 505200 | NSE: EICHERMOT | SERIES: EQ | ISIN: INE066A01013 | SECTOR: AUTO – LCVS & HCVS
Founder Vikram Lal
Headquarters: New Delhi
The fifth costliest share in India, Eicher Motors Limited trades at a market price of around Rs. 20,800for each stock.
The fifth most expensive stock in the Indian market, Eicher Motors Limited is a famous motorcycle and commercial vehicles manufacturer. The company behind the fifth most expensive share in India, Eicher is the maker of iconic Royal Enfield, a name which is loved by most motorcycle enthusiasts of the country. The world’s oldest motorcycle brand in continuous production, Royal Enfield has made its distinctive motorcycles since 1901. Eicher has a joint venture with Sweden’s AB Volvo – Volvo Eicher Commercial Vehicles Limited (VECV)
6. Page Industries Ltd.: Stock price: Rs. 19,386.00 (24 Jul, 3:30 PM)
BSE: 532827 | NSE: PAGEIND | SERIES: EQ | ISIN: INE761H01022 | SECTOR: TEXTILES – READYMADE APPARELS
The sixth costliest share in India, Page Industries Ltd. trades around the price of Rs. 19,400 per stock. Featuring the sixth most expensive share in India, Page Industries, also known as Jockey, is the licensee of Jockey International and Speedo in India and Sri Lanka. The company behind the sixth most expensive stock of the Indian market was established in 1994 by the Genomal family. It started trading publicly on July 29th 2007, with an IPO of Rs 600.
Page Industries handles all of the manufacture and distribution operations of the JOCKEY brand Innerwear/Leisurewear for Men and Women in India, Sri Lanka, Bangladesh, Nepal and UAE. Page Industries also holds the license to manufacture, market and distribute the Speedo brand across India.
7. Nestle India Ltd.: Stock price: Rs. 17,250.00 (24 Jul, 3:30 PM)
BSE: 500790 | NSE: NESTLEIND | SERIES: EQ | ISIN: INE239A01016 | SECTOR: FOOD PROCESSING
Parent Company: Nestle S.A., Vevey, Vaud, Switzerland
The seventh costliest share in India, Nestle India trades at a market price around Rs. 17,250 for each stock.
The seventh most expensive stock in the Indian market, Nestle also happens to be the world’s leading Nutrition, Health and Wellness Company. Some of the famous products offered by the company with the sixth most expensive share in India are: Nescafe, Maggi, Milkybar, Kit Kat, Bar-One, Milkmaid, Nestea, Nestle Milk, Nestle Dahi and Nestle Jeera Raita. The company has one of the highest share prices in India.
8. Abbott India Limited: Stock price: Rs. 15,157.00 (24 Jul, 3:30 PM)
BSE: 500488 | NSE: ABBOTINDIA | SERIES: EQ | ISIN: INE358A01014 | SECTOR: PHARMACEUTICALS
Parent Company: Abbott Laboratories, Abbott Park, Illinois, USA.
The eighth costliest share in India, Abbott India trades at a market price of around Rs 15,157 per stock.
The eighth most expensive stock in the Indian market, Abbott is one of India’s largest pharmaceutical companies with a diverse range of science-based nutritional products, diagnostic tools, branded generic pharmaceuticals, and diabetes and vascular devices. The company behind the eighth most expensive share in India, Abbott India Limited is an integral part of Abbott’s global pharmaceutical business operations.
9. Bosch Ltd: Stock price: Rs. 13,187 (24 Jul, 3:30 PM)
BSE: 500530 | NSE: BOSCHLTD | SERIES: EQ | ISIN: INE323A01026 | SECTOR: AUTO ANCILLARIES
Headquarters: Bangalore, Karnataka
Parent organization: Robert Bosch GmbH, Gerlingen, Germany
The ninth costliest share in India (by a very small margin) is Bosch Ltd., one of India’s most famous Auto, Industrial Technology and Consumer Goods manufacturing firms. The ninth most expensive share India is traded at a market price of around Rs. 13, 187 per stock.
Bosch Ltd is India’s largest automobile component manufacturer. The firm’s activities fall under the following subcategories: Automotive Technology i.e. Diesel and Gasoline Fuel Injection Systems, Blaupunkt Car Multimedia Systems, Auto Electricals and Accessories, Starters and Motors, Energy and Body Systems. The company behind the ninth most expensive shares in India is also a leading supplier of technological services in areas such as Mobility Solutions, Industrial Technology, Consumer Goods, and Energy and Building Technology.
10. Procter and Gamble Hygiene and Health Care Ltd.: Stock price: Rs. 10,861.00 (24 Jul, 3:30 PM)
BSE: 500459 | NSE: PGHH | SERIES: EQ | ISIN: INE179A01014 | SECTOR: PERSONAL CARE
Parent organization: The Procter & Gamble Company, Cincinnati, Ohio, USA
The tenth costliest share in India, Procter and Gamble Hygiene and Health Care Ltd trades for a market rate of around Rs. 10,861 of each stock.
Procter & Gamble Hygiene and Health Care Limited is one of the largest and most revered consumer goods companies in India. Established in 1964, the company behind the tenth most expensive stock in India is engaged in the manufacturing and selling of branded packaged fast-moving consumer goods in the femcare and healthcare businesses. The company with the tenth most expensive shares in India also offers ayurvedic products and sanitary napkins.
11. Bombay Oxygen Investments Ltd.: Stock price: Rs. 10,720.00 (24 Jul, 3:30 PM)
BSE: 509470 | ISIN: INE01TL01014 | SECTOR: CHEMICALS
The eleventh costliest share in India, Bombay Oxygen Investments Ltd. might be the least familiar sounding name on this list. The eleventh most expensive stock in India trades at a market price of around Rs. 10,720 per stock.
Bombay Oxygen Investments Ltd. was established on 3rd October 1960. Bombay Oxygen is also into the business of manufacturing and supplying of Industrial gases like oxygen, nitrogen and carbon dioxide.
So that was our list of the 11 costliest shares in India. Hopefully, that gave you a better insight into the most expensive shares in the Indian stock market. As you would’ve seen by now, the highest share price in India is not enjoyed by the companies you might have expected. And even though the stocks in this list are a bit expensive, they are definitely among some of the best stocks to buy in India. Keep them in mind while investing.
When it comes to investing money in India, there are a lot of good options available. People can invest their hard money in the stock market and the best stocks to buy in India are always good options. However, it’s always a wise move to diversify your assets and invest some money in safer, more assured, if less lucrative avenues. Fixed deposit accounts are some of the best options for that. And State Bank of India (SBI) offers a wide array of FD account options along with good interest rates. State Bank of India, popularly known as SBI, is the largest bank in India. It has a 23% market share in assets and over 25% share of the complete loan and deposits market. State Bank of India is also the oldest commercial bank of the Indian Subcontinent. It descended from the Bank of Calcutta (founded in 1806, via the Imperial Bank of India). The Bank of Madras merged with the Bank of Calcutta and Bank of Bombay to form the Imperial Bank of India. After independence, the Government of India took control of the State Bank of India and the Reserve Bank of India claimed a 60% stake. The bank’s name was also changed to the State Bank of India in 1955. SBI has an extensive network of branches and services. You can find a branch of SBI in literally every part of the country. The services and account options provided by SBI is also extensive. Customers can choose to keep their money in one of the multiple fixed deposit account options offered by SBI. The bank also offers attractive interest rates for its customers over a certain period. All depositors just need to deposit the amount at the time of account opening and choose the tenure that suits their needs. During the term of a fixed deposit, customers are not allowed to deposit or withdraw any money. As far as SBI interest rates are concerned, SBI FD rates are some of the most competitive in the Indian market. SBI interest rates on FD are usually higher than SBI’s interest rates on their savings accounts. Let’s find out more about SBI interest rates.
SBI FD Interest Rates: Different Features, Rates and FAQs
SBI FD Interest Rates: Special Features
- The SBI FD tenure ranges between seven days to 10 years.
- In order to open a fixed deposit with SBI, you will need to deposit at least Rs. 1000, There is no limit to the maximum deposit for SBI fixed deposits.
- Senior citizens can also avail an extra 0.25% interest rate for FD accounts that exceed Rs. 10,000.
- State Bank of India also provides a nomination facility for all depositors. This allows depositors to nominate family members to collect the maturity amount in case of their demise.
- State Bank of India’s interest rates on FD can be paid monthly/quarterly/calendar as per your requirement.
- SBI also offers an auto-renewal facility on its fixed deposits.
- Customers can also avail loans against their SBI fixed deposits.
- If Form 15G/15H is not submitted, the TDS is deducted at the prevalent rate.
SBI Term wise Fixed Deposit Interest Rates
Even if you are investing a good amount of your hard earned money on the best shares to buy in India, you should still try to invest some of your money into fixed deposits (especially your surplus cash and profits earned from the stock market). Depending on the tenures, these FDs are further categorized as short-term, medium-term, and long-term deposits. Let’s find out more about the different types of deposits:
- Short-term Deposits: For an SBI FD with tenure ranging from 7 days to 365 days, the interest rate offered is from 4.50% p.a. to 5.80% p.a. These deposits are known as short term deposits as they have a tenure less than 1 year. For senior citizens, short term SBI FD rates range from 5.00% p.a. to 6.30% p.a.
- Medium-term Deposits: Medium-term fixed deposits have their tenures ranging from more than 1 year to less than 5 years. The interest rates offered by the bank on these deposits range from 5.80% p.a.-6.25% p.a.
- Long-term Deposits: These deposits’ tenure ranges from 5 years to 10 years and offers an interest rate of 6.10%. Senior citizens can avail interest of 6.60% p.a.a for such FDs.
Types of SBI Fixed Deposit Scheme
SBI Tax Saving Scheme:
- As the name suggests, this scheme is specially designed for resident individuals and HUF (Hindu Undivided Family) to save on the tax and can make substantial returns on their fixed deposit.
- The depositor can avail tax benefits on their deposit under Section 80C of the Income Tax Act, 1961.
- Customers can also utilize the nomination facility.
- Depositors have the option to take loans up to 90% against the FD.
- Senior citizens enjoy an extra 0.5% interest over the regular rates.
- Resident Indians and HUF members can open this account as long as they have a valid PAN card.
- Under this scheme, the interest is paid only upon maturity.
- Nomination and loan facility is available.
- Auto-renewal facility is available on the deposit.
- Senior citizens enjoy an extra 0.5% interest over the regular rates.
- Resident Indians aged 18 years and above are allowed.
SBI Multi Option Deposit Scheme (MOD)
- This account is linked to the savings or current account from which one can withdraw in multiples of Rs. 1000.
- Interest is paid only upon maturity.
- Nomination and loan facility of up to 90% on the deposit is available.
- Unlike normal fixed deposits, you can withdraw money as required.
- The withdrawals can only be in multiples of Rs. 1000.
- Resident and Non-Resident Indians, HUFs and organizations are eligible for availing the MOD scheme.
Money Multiplier Plan
- This plan enables the depositor to link a fixed deposit account to their savings account, hence giving a higher rate of interest.
- Loan and nomination facility available.
- Interest is paid only at the time of maturity.
- Senior citizens enjoy an extra 0.5% interest over the regular rates.
- Resident Indians, organizations, HUFS, trust and partnership firms are eligible for the Money Multiplier Plan.
Regular Fixed Deposit
- Under this scheme, the depositor can make an investment into the deposit to earn higher returns
- Interest is paid only upon maturity
- Nomination facility is available
- Senior citizens enjoy an extra 0.5% interest over the regular rates.
- Auto-renewal facilities are also available in this scheme.
Flexi Deposit Scheme
- This scheme is more like recurring deposits in which the depositor can make deposits anytime during a month instead of a single fixed deposit.
- One can make deposits anytime during a month and multiple deposits facilities are also available.
- Loan against FD and nomination facility is also available for depositors.
- Senior citizens enjoy an extra 0.5% interest over the regular rates.
How to Calculate SBI Fixed Deposit Rates?
The interest earned on your State Bank of India fixed deposit depends on factors such as the invested amount, tenure, rate of interest, compounding frequency and taxation. The SBI FD Calculator on the bank’s website is a great tool for you to calculate your SBI FD’s interest earned. It is the easiest and most convenient way for you to calculate the interest on your SBI account. All you need to do is enter your SBI FD account details such as the investment amount, interest rate and the tenure.
For your easy reference, here is a table with SBI’s FD interest rates:
|Tenure||FD Rates||Senior Citizen FD Rates|
|7 days – 45 days||4.50%||5.00%|
|46 days – 179 days||5.50%||6.00%|
|180 days – 210 days||5.80%||6.30%|
|211 days – 364 days||5.80%||6.30%|
|1 year – 1 year 364 days||6.10%||6.60%|
|2 years – 2 years 364 days||6.10%||6.60%|
|3 years – 4 years 364 days||6.10%||6.60%|
|5 years – 10 years||6.10%||6.60%|
State Bank of India Fixed Deposit Interest Rates – FAQs
What is the Tenure Range for SBI FD Account?
SBI FDs usually range from seven days to 10 years.
Is there any minimum amount required to open an FD account?
In order to open an SBI FD, you will need to deposit at least Rs. 1000.
How to open an FD account in SBI?
If you are an existing SBI customer with active online banking, you can just log in to your account and open an FD account. If you are a new customer, you can visit your nearest SBI branch or get an FD account by applying on SBI’s website.
Can I deposit an additional amount into my already existing FD?
No. SBI provides no such facility for customers. This facility is not provided by the bank.
So that was a brief summary of the different interest rates offered by SBI across its different FD accounts. We also went through the different types of FD accounts available and what facilities are offered by them. Hopefully, this will give you a clearer idea of the interest rates offered by SBI for your deposits. Happy Investing!
India has 23 stock exchanges in total. Out of those 23, two stock exchanges, namely the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) are the major stock exchanges. While most people are familiar with their existence and what they do, they might not be familiar with what their differences are. However, before we can start talking about the differences between the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), let’s spend a few moments understanding what a stock exchange actually is. A stock exchange, also known as the securities exchange or bourse is a place where traders and stockbrokers can buy/sell securities such as shares, stocks and bonds. Securities traded on a stock exchange include stock issued by listed companies, unit trusts, derivatives, pooled investment products and bonds. Whether you are a seasoned trader who knows what are the best stocks to buy in India or a beginner who is looking to start investing in securities, the stock market is where all the trading happens. Now that we have covered what a stock exchange is, let’s find out how BSE and NSE are different.
BSE vs NSE: Difference Between BSE and NSE
What is BSE?
The Bombay Stock Exchange (BSE) is the oldest stock exchange in India. The BSE began its operations as “The Native Share & Stock Brokers Association” in the year 1875. This makes the BSE the oldest stock exchange across the continent of Asia as well. Unlike the NSE, the BSE shifted from the open outcry system to completely electronic BSE On Line Trading (BOLT) system only in 1995.
Bombay Stock Exchange has its own benchmark index known as SENSEX (Sensitive Index). This index was first introduced in the year 1986 and is essentially a weighted average value of the top 30 companies listed in the stock exchange.
What is NSE?
The National Stock Exchange (NSE), which also happens to be India’s largest stock exchange in terms of market capitalization, was founded in 1992. The NSE was the first ever stock market to embrace and introduce the system of electronic and fully automated trading in India. NSE’s revolutionary impact brought a sea change into the way share trading was done in India. In just a few years, this electronic system of trading had completely replaced the paper-based share trading system involving physical share certificates.
The stock market also features a benchmark index referred to as NIFTY (National Fifty). The NIFTY index derives its value from 50 of the biggest (in terms of market capitalization) and most frequently traded companies listed in the NSE. Furthermore, NSE has been very recently adjudged as the world’s largest exchange in the derivatives segment in terms of the number of contracts traded.
Difference between NSE and BSE
Now that you have a basic idea of the NSE and BSE, it’s time to discuss the differences between the two. Yes, they are both exchanges, but there are some distinct differences between the two. Let’s find out what they are:
BSE is the oldest stock market in Asia and has been operational since the 19th century. In contrast, NSE came into the picture very recently, less than 30 years ago as a matter of fact. In the global stock market rankings, BSE stands at the 10th position, while the NSE occupies the 11th position.
When it comes to electronic trading, the National Stock Exchange has a distinct upper hand over the Bombay Stock Exchange. Right from the time of its inception, the NSE has always been a totally electronic stock market that promoted a paperless trading system. BSE, on the other hand, had been following the paper-based system for a long time and made the switch to electronic trading only in the year 1995 with the introduction of BSE On-Line Trading (BOLT).
In the derivatives contracts segment, NSE has a huge head start and has virtually monopolized the entire segment. The NIFTY 50 and Bank NIFTY, two of the main indices of the National Stock Exchange are very liquid and are the most highly traded contracts of India’s derivative segment. By way of comparison, the BSE has far lower volumes among investors and traders alike.
Number of listed companies
When it comes to the number of listed companies, the Bombay Stock Exchange is miles ahead of the National Stock Exchange. A lot of that has to do with the fact that the Bombay Stock Exchange has been around for a lot longer than the National Stock Exchange. While the NSE has a strong roster of around 1600 listed companies, the BSE has more than three times the number with around 5000 companies.
Listing of the stock exchange
With respect to the listing of NSE vs BSE, the Bombay Stock Exchange is the only listed exchange in India. The BSE is listed on its rival stock market platform, the National Stock Exchange. While NSE also had plans of getting listed on a stock exchange, it unfortunately never came to pass due to several legal hurdles.
Should you invest in the BSE or the NSE?
Both the exchanges are very good as far as their services offered to investors are concerned. Instead of worrying about which exchange you should invest your money in, you should focus on selecting the right stock for your investment. It doesn’t really matter which exchange you use for investing. Both the NSE and BSE are very good stock exchanges which offer a very solid technology platform for buying and selling stocks.
However, you must remember that the stock prices in both the exchanges can be slightly different from one another. The difference won’t be extreme but a stock trading for Rs. 100 in the NSE might be trading at Rs. 99 in the BSE.
Despite the price difference, the brokerage levied by your broker and the Securities Transaction Tax are the same on both the NSE and BSE. The NSE trade volume of shares is generally high. This makes it a good place to sell if you are planning to sell a large quality of stocks. There are some shares which are not listed on the NSE and you can only trade them on the BSE. Some popular stocks which are exclusively available for trading on the BSE are SpiceJet and Claris Lifesciences.
Almost all share brokers tend to be members of both the NSE and BSE. It’s very easy for you to invest in either of the exchanges. As long as you are not trading at an extremely high volume, it shouldn’t matter which exchange you trade in. When you invest in stocks, be more concerned about the quality of stocks rather than the exchange, BSE or NSE.
Differences between NSE and BSE: Conclusion
The National Stock Exchange (NSE) and the Bombay Stock Exchange (NSE) are two of the biggest stock exchanges in the world. All of the best shares to buy in India are available in those two stock exchanges. The Bombay Stock Exchange, with its 5000+ portfolio of listed companies, is the ideal platform for beginners. The sheer volume of options provides a lot of flexibility. Alternatively, the National Stock Exchange, with its excellent repertoire of derivative contracts, is the perfect platform for seasoned investors and traders. Now that you are aware of most of the differences between NSE and BSE, you can go ahead and start investing.
Canara Bank is one of the largest public sector banks in India. The bank was established in the city of Mangalore (part of the Canara/Kanara region of Karnataka) in 1906. Currently, the bank’s headquarters are located in the city of Bengaluru. Canara Bank was nationalized in 1969. As of today, Canara Bank has more than 6300 branches all over India and it operates more than 8800 ATMs all over the country. Canara Bank also has its branches abroad. Some of the countries that the Canara Bank has branches in, are Russia, the USA and China among others. Canara Bank is all set for a merger with Syndicate Bank in 2020. Apart from the popular savings accounts offered, Canara Bank also offers some of the best fixed deposit accounts in the country. Its rates and features can keep up with SBI Interest rates, the largest bank in the country. Customers enjoy multiple options when it comes to picking Canara Bank fixed deposit schemes. Let’s find out more.
Canara Bank FD Rates: Different Schemes, Benefits, Eligibility, and FAQs
What are the Different Types of Canara Bank FD Schemes?
Canara Bank has a variety of FD schemes that are tailored to the specific needs of its target customers. Here are the different fixed deposit options available for Canara Bank customers:
- Canara Bank Fixed Deposit – Individuals, HUF members, joint account holders, companies and other organizations are eligible for this scheme. The maturity period ranges between 15 days and 10 years. Investors can start with deposits as low as Rs. 1,000.
- Canara Bank Kamadhenu Deposit – This scheme is also available to companies, joint account holders, HUF members, minors and individuals. The minimum maturity period for the scheme is 5 months, while the maximum is set at 10 years. Individuals can start small, with just an initial investment of Rs. 1,000. There is no upper limit for deposits.
- Canara Bank Tax Saver Deposit – This non-callable Canara Bank FD is apt for investors looking to save income tax liability on their interest earnings. Here, the deposit amount can vary between Rs. 1,000 and Rs. 1.5 Lakh. It comes with a lock-in period of 5 years. The facilities of loans against FD and premature withdrawals are not applicable under this scheme.
- Canara Bank Ashraya Deposit – This FD scheme is exclusive to senior citizens only. The maturity period can vary between 15 days and 10 years. The minimum deposit is Rs. 1,000, with no upper limit for investments into the plan. In case it’s a joint account, the second account holder doesn’t need to be a senior citizen (over 60 years of age).
Premature Withdrawal – Terms and Conditions
Premature withdrawal refers to the removal of the sum linked to an FD account before its maturity. You can avail this facility on the majority of Canara Bank’s fixed deposit schemes. However, the bank charges a 1% penalty fee in such early withdrawals.
People who have invested in the Canara Bank Tax Saver Deposit are not eligible for withdrawal of the sum before the mandatory 5-year term runs out.
Special Forms to Fill
Ensure to fill up Form 15G and Form 15H correctly before submitting the same at the bank. Failure to do so results in TDS on your FD interest earnings at the rate of 10%.
Loan against Canara Bank FD
Canara Bank allows investors to avail a loan of up to 90% against their fixed deposit investments, for most schemes. The interest rates charged by Canara Bank on these loans are quite competitive. If you have invested in the Canara Bank Tax Saver Deposit schemes, the loan facility won’t be available to you.
Benefits of Choosing Canara Bank FD
Although several financial institutions offer fixed deposit investment facilities to consumers in India, the following factors make Canara Bank FD scheme a good decision:
- Canara Bank offers a part withdrawal facility. The bank allows customers to withdraw a portion of their earnings even before the sum matures.
- Customers can also nominate family members when it comes to their FDs.
- Customers can enjoy the facility of automatic renewal on the maturity date for shorter-termed FDs unless it has been specified otherwise.
- A loan or overdraft facility is also available for customers, amounting up to 90% of the total deposit.
Eligibility Criteria for Canara Bank FD
In order to open a Canara Bank FD, customers need to fulfill the following eligibility criteria:
- Resident individuals or NRIs.
- Minors are eligible but need a guardian to operate their account.
- Individuals belonging to Hindu undivided families or HUF.
- Companies, organizations and other institutions are also eligible for a Canara Bank FD scheme.
Documents Required for Opening a Canara Bank Fixed Deposit Online
- Proof of Address
- Bank statement including cheque
- Electricity bill
- Telephone bill
- An ID or certificate issued by Post Office
- Proof of Identity
- Driving license
- PAN Card
- Voter ID
- Photo ration card
Note: In case you need a non-PAN Card document as your proof of identity, you will still need to submit the PAN Card compulsorily.
Canara Bank FD Rates
While depositing in FDs, investors tend to look for great interest rates and Canara Bank provides very competitive ones. Canara Bank FD rates range between 4.50% and 5.95% for short term FDs (maturity period between 7 days and 365 days). Senior citizens investing in these schemes are eligible to receive an additional 0.50% interest per year, ranging between 5.00% and 6.75% p.a.
Long term FDs (maturities ranging between 5 years and 10 years) offer better returns. For investors below 60 years of age, the maximum interest rate applicable is 6.40%. Senior citizens, on the other hand, can enjoy a maximum interest of up to 6.90% rates per annum. Here is a list of the different FD tenures and interest rates offered by Canara Bank:
|Tenure||Non-senior citizen and NRO FD (%)||Senior Citizen FD (%)|
Canara Bank FD Rates: FAQs
- What is the highest interest rate for Canara Bank FDs?
For regular investors, the maximum interest rate offered is 6.50% per annum, while for senior citizen investors, the highest rate is 7.00% per year.
2. Do Canara Bank Tax Saver Deposits have flexible tenures?
No. This particular scheme offers a fixed lock-in period of 5 years.
3. How to resolve queries regarding Canara Bank FDs?
Investors can reach out to the bank’s Customer Care division by calling on 1800 425 0018.
4. What are the minimum and maximum maturity tenures for Canara Bank’s fixed deposits?
The minimum tenure is 7 days, while the maximum period can range up to 10 years based on the scheme you pick.
5. Can investors deposit an additional sum into an ongoing FD?
No. Adding an additional amount of money to an already existing FD account is not possible. Those looking to increase investment quantum must open a new account altogether.
6. What is the eligibility criterion for Canara Bank FDs?
Everyone, including NRIs, HUF, minors, joint account holders, firms and corporations are eligible for Canara bank fixed deposits online.
7. Can the duration of an on-going FD be changed midway?
No. You cannot change the tenure of a fixed deposit after an investment has started. Those looking for a different maturity period must begin a separate FD with the preferred tenure.
8. What is the minimum deposit for opening the Canara Bank fixed deposit scheme?
Investors need to deposit at least Rs. 1,000 in their FDs with Canara Bank.
9. What is the current interest rate range for Canara Bank FDs?
The regular FD rates range between 5.75% and 7.00% annually. It is higher for senior citizens.
10. How much loan can investors avail against fixed deposits?
Investors can avail up to 90% of their FD value as loans.
So that was a brief summary of the different interest rates offered by Canara Bank across its different FD accounts. We also went through the different types of FD accounts available and what facilities are offered by them. Hopefully, this will give you a clearer idea of the interest rates offered by Canara Bank for your fixed deposits. Happy Investing!
Even if you are a seasoned investor who knows all about the best stocks to buy in India, you should invest some money in bank FDs and that’s why we are discussing Indian Bank FD rates in this article. The interest rates offered by Indian Bank are quite competitive and compare favourably with SBI FD Interest Rates and Canara Bank FD Interest Rates.
Indian Bank is an Indian state-owned financial services company which opened its doors to customers in 1907. It is headquartered in Chennai, India. It serves more than 100 million customers with 20,924 employees, 6,089 branches with 5,022 ATMs and 1,494 cash deposit machines and is one of the top performing public sector banks in India. The aggregate business of the bank has touched ₹430,000 crores (US$60 billion) according to reports from 31 March 2019. The bank’s Information Systems and Security processes are certified with ISO27001:2013 standard and are among very few global banks certified in this way.
Indian Bank has overseas branches in countries such as Colombo and Singapore including a Foreign Currency Banking Unit at Colombo and Jaffna. Since 1978, the Government of India has had ownership of the bank.
Most banks offer multiple FD options to its customers where they can secure their savings and earn interest on it. Indian Bank FD rates tend to be comparatively higher than the interest provided on the savings account. Therefore, you as a customer will have to deposit at least the minimum required amount at the time of opening the account. And, there’s one main caveat: once the account is opened, you cannot deposit any additional amount.
Indian Bank FD Rates: A Quick Look
Indian Bank FD Interest Rates Features
- Additional interest rates for senior citizens
- Nomination facility is offered
- Indian Bank FD tenure ranges from 7 days to 5 years
- Loan facility is offered
- The bank provides auto-renewal facility
- The highest rate of interest offered by the bank is 6.25%
- Earned interest is taxable
Indian Bank FD Interest Rates
|Tenure||General Citizen FD Rates||Senior Citizen FD Rates|
|7 days to 14 days||4.50%||5.00%|
|15 days to 29 days||4.50%||5.00%|
|30 days to 45 days||4.50%||5.00%|
|46 days to 90 days||5.00%||5.50%|
|91 days to 120 days||5.50%||6.00%|
|121 days to 180 days||5.55%||6.05%|
|181 days to 269 days||5.75%||6.25%|
|9 months to 364 days||5.75%||6.25%|
|1 year 1 day to 1 year 364 days||6.30%||6.80%|
|2 years to 4 years 364 days||6.25%||6.75%|
Indian Bank FD Schemes
- Regular Fixed Deposit
As the name suggests, a regular fixed deposit scheme is provided by Indian Bank in which the customers can store their money to earn higher interest rates along with flexibility and liquidity.
- Loan facility is available under this scheme
- Auto-renewal facility is available
- Resident Indians, public or private company, HUFs, trust, and partnership firms are eligible
- Reinvestment Plan
This is the term deposit scheme provided by the Indian Bank which reinvests all the earned dividends, capital gains, and interest back to buy units or shares rather than paying back in the form of physical cash.
- Loan facility is available
- Interest on deposit is compounded quarterly
- Auto-renewal facility is available under this scheme
- Interest on deposit is subject to TDS
- Resident Indians, public or private company, HUFs, trust, and partnership firms are eligible
Indian Bank FD Term Wise Interest Rates
An amazing way to both secure your cash and earn a profit by investing your surplus earnings in Indian Bank FDs. The Indian Bank FDs are further categorized as short-term, medium-term, and long-term deposits according to the tenures.
- Short-term Deposits: For an Indian Bank FD with tenure ranging from 7 days to 12 months, the interest rate offered is around 5.75% p.a. These deposits are known as short term deposits as they have a tenure less than 1 year.
- Medium-term Deposits: Medium-term fixed deposits have their tenures ranging from more than 1 year to less than 5 years. The interest offered by the bank on these deposits is around 6.30%
- Long-term Deposits: These deposits have their tenure ranging from 5 years to 10 years and offer an interest rate of 6.25%.
Indian Bank FD Interest Rates 2020 – FAQs
What is the minimum amount needed to open an FD with Indian Bank?
A minimum amount of Rs. 100 needs to be deposited to open an FD with Indian Bank.
What documents are needed to open an FD account in Indian Bank?
To open an FD account you’ll need to provide your PAN card, two photographs, identity proof, and address proof. Please ensure that all documents are up to date.
What is the Indian Bank FD Calculator?
The Indian Bank FD calculator can be used to calculate the maturity amount on the deposit. The Indian Bank FD Calculator is available online and just requires the basic understanding with regards to the FD account details like the amount, tenure, and the rate of interest.
Can we open an FD account with Indian Bank online?
Yes, you can submit the application on the official website of Indian Bank and a representative will call for further details.
Can a customer deposit an additional amount after opening the FD account?
This is the most commonly talked about warning as no additional amount cannot be deposited once the account is opened with a certain deposit amount.
What happens if you want to prematurely withdraw Indian Bank Fixed Deposits?
Indian Bank levies a 1% interest rate from the contracted rate for deposits above 5 lakh. However, the penalty for premature withdrawal is subject to change periodically and may also vary with the deposit schemes.
So that was a brief summary of the different Indian Bank FD rates across different schemes and interest rates. We also went through the different types of FD features available and some important questions. Hopefully, this will give you a clearer idea of the interest rates offered by Indian Bank for your fixed deposits. Happy investing!
An NFO (New Fund Offering) is similar to an initial public offering (IPO) in which investors can purchase shares before getting listed on the exchange. Both represent attempts to raise money to put into further operations. New fund offers can be accompanied by aggressive marketing campaigns that are designed to entice investors to purchase units in the fund. These funds often have the potential for significant gains after beginning to trade publicly. The most common type of new fund offering is mutual funds. The initial purchasing offer for a new fund depends on the fund’s structuring.
In this article we have listed:
- What is New Fund Offering?
- Common types of New Fund Offerings
- What should you consider before investing in a New Fund Offering?
- How to Invest in an NFO?
NFO (New Fund Offering): What You Need To Know Before You Invest
What is New Fund Offering?
A new fund offer (NFO) is the first subscription offering, offered to the public by an investment company. The fund houses make use of a newly launched NFO to raise money from the public to purchase securities such as equity shares, bonds, etc in the market.
New Fund Offering is usually cheaper compared to existing funds as it is new to the market. Also, NFOs are marketed quite well which definitely tempts you into thinking that this is a one-in-a-lifetime purchase. However, when it comes to matters of your hard-earned money, you, the investor must do thorough research and come up with a well-established judgement before proceeding with the investment. As we mentioned in the intro, mutual funds are one of the most common new fund offerings marketed by an investment company.
Common types of New Fund Offerings:
Closed-end new fund offers are often some of the most highly marketed new funds since they only issue a specified number of shares during their new fund offer. Such funds trade on an exchange with daily price quotes throughout the day. If you want to buy closed-end funds on their launch date, you can do so through a brokerage firm.
Closed-end funds are also associated with a fixed corpus, raised through new fund offers. After the subscription period is over, no further addition to the portfolio is allowed, and the NAV (Net Asset Value) of the fund is determined based on the number of units in circulation with respect to the total value of underlying assets.
Any purchase or sale of mutual fund units has to be done through market exchange, similar to stock market trading. The price at which the NAV units are traded is subject to the overall demand and supply in the market, determining whether a unit is traded at a premium or discount.
An open-end fund will announce new shares to the public for purchase on a specified launch day. Most mutual funds can be categorized as open-ended funds, wherein the number of units of the respective fund keeps fluctuating with a corresponding demand. Unlike close ended funds, open-end funds do not limit their number of shares. These funds can be bought and sold from a brokerage firm on their initial launch date and afterwards too. The shares do not trade on an exchange and are managed by the fund company. They may also be managed by the fund company affiliates.
Fund companies can premier new fund offers for new strategies or they can add additional shares classes to existing strategies. Open-end mutual funds report net asset values per day after the market’s close.
New fund offerings under open-ended funds allow individuals to procure units of a mutual fund before its NAV (Net Asset Value) has been determined, thereby allowing them to gain profits in the long run. After a mutual fund starts operating, investors have to pay the respective net asset value for obtaining each unit of the fund.
Any purchase or sale of units of an open-ended fund reduces its NAV, contrary to close-ended funds wherein no effect is levied on the net asset value upon purchase or sale of securities.
Both open-ended and closed-end funds can be chosen as a tool for investment, as both are likely to generate capital gains as well as dividend returns (depending upon the type of investment scheme). While open-ended funds tend to be actively managed by portfolio managers, close-ended funds are likely to be passively managed to replicate the returns of a benchmark index.
Exchange-traded funds (ETFs) are also premiered through a new fund offer.
For example, on November 9, 2017, Vanguard launched the Vanguard Total Corporate Bond ETF (VTC). This offer increased the firm’s U.S. fixed income fund offerings to 17 ETFs.
What should you consider before investing in a New Fund Offering?
Most investors look for mutual fund investment opportunities when the markets are at a peak. Whether it is for real estate or gold, they desire to enter the market, assuming that an increase is imminent. But it’s also human nature to bargain and snatch any lucrative deals available at a cheaper rate. This thinking often makes them victims of asset management companies (AMCs) who try to capitalise on this mentality of investors.
When people tend to go after the clearly less expensive NFOs, they assume that the NFOs are a value for money proposition and subscribe to them. But this is when the fund houses can achieve their goal of increasing their Asset Under Management (AUM).
The following are the most important things to consider before investing:
The reputation of an AMC
If an investor wants to invest in an NFO, it is of utmost importance to do a background check on the fund house or AMC. As an investor you should make sure that the fund house has a strong history of operating in the mutual fund industry of say at least 5 years and above. More experience will show how they will help to analyse the kind of performance and how they will deliver during market ups and downs.
In simple words, if you see a good track record, then the NFO might perform as promised.
Cost of investment
The overall cost of investment is one of many factors that decide your potential returns. Though there are no entry fees, some NFOs charge exit loads if you happen to redeem units before the completion of the tenure. If the lock-in period is longer than your investment horizon, then your returns can be affected on account of the exit loads.
The expense ratio or the annual fee charged by the fund house for managing your money, is another crucial parameter.
An NFO mutual fund comes with a minimum subscription offer, wherein a stipulated number of units have to be bought to participate in the new fund offering. Thus, a significant investment burden is often imposed on individuals willing to partake in the scheme.
The fund objectives lets you know the asset allocation, riskiness, expected returns, and liquidity, among other things. It helps you to develop a deeper perception about the viability of the NFO.
An NFO needs to clearly explain about the investment process, which it’s going to carry out for the given investment horizon. Basically, it means that reading the offer document should help potential investors understand what the fund manager is going to do with their money.
If investors are unable to make out objectives of the NFO, then the investment process isn’t up to the mark.
Theme of New Fund Offer
There are endless amounts of mutual fund schemes. So it is advised to read the fine print carefully to understand the fund theme when you come across an NFO. The investment theme must be sustainable, long term and something not provided by the existing schemes. Keep in mind that if you find that the new fund offer is a mere repetition of a current strategy, then it is probably not a viable option.
If you are interested in an NFO, then it is advised to analyse the past returns. The offer document may or may not touch upon this information.
An NFO announcement comes with a mandate listing, which incorporates details regarding the types of stock market instruments to be obtained with the raised capital. Going through such documentation is of utmost importance as it indicates the nature of risk associated with the capital invested, as well as expected return on investment (ROI).
You can set an expected rate of return against which you can analyse the fund accordingly. If there comes a time where you have already invested your money in the fund, you can consider reviewing it quarterly, say for the first three years. You can compare the mutual fund’s performance with the index and peer funds to understand the returns trend.
Launches and alerts
Many times new fund offers are not widely publicized making them challenging to identify. Companies must register a new fund offering with the Securities and Exchange Commission (SEC) offering one method of tracking.
Investors seeking information on new fund offers before the launch date may also receive alerts from their brokerage firm. News outlets and news aggregators are also a good source for information on new fund offers.
Investing in new fund offerings could be risky. Aside from existing funds, where you can readily check the asset allocation and risks involved, NFOs doesn’t allow you to see the performance history nor will you see how the fund manager intends to utilise your money. Whether the fund reaches flying colours or goes down the drain can remain a mystery. Without any such metrics, investing will be difficult for you to predict the fund’s performance.
Risk-averse individuals should steer clear of equity mutual funds as well as small and mid-cap companies, and hence, opt for NFO funds primarily investing in debt funds or blue-chip companies. Individuals with a high aptitude for risk, on the other hand, should consider investing in aggressively managed equity funds operated by trained portfolio managers.
A new fund offer effectively reduces the cost of investing in mutual funds. Proper assessment of all corresponding factors can help in realizing substantial profits in the long run, through capital gains or dividend pay-outs. However, many individuals often miss out on such investment options as they fail to receive information regarding the same. Most asset management companies release information regarding the same through marketing campaigns in financial journals and press releases, which can be tracked accordingly through their official website.
Minimum Subscription Amount
New fund offerings always specify a minimum subscription amount for the investors that may range from as low as Rs 500 ($6) to Rs 5,000 ($66).
As an investor, the minimum subscription amount can be your primary criteria for shortlisting your possible ventures. If the minimum subscription amount is higher than what you can spare, re-evaluate your options so that you can consider opting for a systematic investment plan (SIP), in an existing high-performing scheme, which is an affordable and easier choice.
NFOs can also have lock-in periods ranging from three to five years in which case you will be required to stay fixed and invested for the entire tenure.
Once you have subscribed to a mutual fund scheme, you may have the chance to redeem your units before maturity. If that does happen, you could also be charged a pre-exit fee (exit load) for the same.
Therefore it’s important to make your investments be in line with your investment horizon and goals. It is also advisable to re-evaluate your options in case the preferred NFO happens to be longer than your investment goals.
How to Invest in an NFO?
Investing in NFO is overall a seamless process and one can choose any one of the below-mentioned methods for investment in NFO. All the methods have their own perks.
There are two main ways through which one can invest their money in NFO. Let’s examine what these methods are:
Through a Broker
This is perhaps the basic method of investing in an NFO. You can always reach out to a broker and they can help you invest in a new fund offer. Always make sure that the broker you are consulting is an authorized one. Your broker can help you out with completing all the formalities regarding the application for NFO. You of the most important benefits of investing through a broker is you get doorstep services and also information regarding the future performance of the fund that you are investing in.
Through Online-trading account
This is another method of investing and is convenient too. If you are already into investing in shares and mutual funds, you must have an online trading account. The same account can be used to invest in NFOs as well. The purchasing and selling of the NFO units can be done online. The online trading account can also be used to track the Net Asset Value (NAV) of the investments made.
Equity shares of a company with the ability to generate returns that are way higher than the money spent buying them, are known as Multibagger stocks. Peter Lynch, the famous author of One Up on Wall Street is credited as being the inventor of multibagger stocks. These stocks are generally issued by firms with a great potential for growth, sound management team and production techniques. Multibagger stocks are also representative of a firm’s great research and development skills. This helps them generate high demand in the market. Multibagger stocks in the current situation are also representative of a country’s economic bubble. In the long run, this might actually have a detrimental effect on a country’s financial market.
Let’s find out more about Multibagger stocks
What are the characteristics of a company that has Multibagger stocks?
Multibagger stocks are generally associated with amazing returns on investment. Such amazing returns can only be generated by companies that have the following characteristics:
- Advanced research and development skills
The robust growth of a company is associated with a massive volume of sales of its product in the market. To achieve this, quality products have to be delivered by such companies, providing immense customer satisfaction. In order to achieve that, companies must invest a large amount of money in research and development of a product. That will help a company enlist its securities in the stock exchange as Multibagger stocks.
Start-up companies launching products having tremendous customer usage scope and no close substitutes tend to generate a lot of demand in the market. Multibagger stocks help enhance the paid-up capital of these companies. Aggressive pricing strategies along with entry restrictions can help companies increase their total revenue generation.
- High growth
The performance of the issuing company is a great way to identify multibagger stocks. Businesses demonstrating high-profit generation and limited debt liability are top contenders. Multibagger shares also tend to have high earnings per share, increasing your dividend income on the investment amount. These companies tend to have a low debt to equity ratio, which indicates strong financial management. Price to earnings growth ratio (PEG) is also high, as the returns on one unit value of a share is several times more than the initial investment made towards it.
- Excellent Management Skills
Multibagger stocks are usually issued by companies having trained and experienced managers. Inefficient management leads to a lack of proper flow in the production chain, as coordination between production and sales chain starts becoming faulty. Several analysts are also usually employed by such companies to identify optimal pricing level. This ensures proper revenue maximization.
Why Should You Invest In Multibagger Stocks?
- Multibagger stocks are great for increasing your wealth by a great amount. That’s mainly because the returns on such investments are tremendous. For example, you can invest in such shares for Rs. 100, and realize profits amounting to Rs. 1000 (ten times the original amount – tenbagger stock). However, money should be invested in multibagger shares for a small amount of time, to ensure extensive capital gains through the turnover of funds to final products sold in the market.
- Funds obtained from listing shares in stock exchange are used for both research and development and production of a product. This also results in high profits with the help of massive sales volume.
What Is The Risk Associated With Multibagger Stocks?
- In order to create wealth using multibagger stocks, they need to be purchased in bulk. While that maximizes profit, it can also cause massive losses in the case of a market downturn.
- Many multibagger stock investors can get caught up in an economic bubble or value trap. Companies trading at high prices might reflect the creation of an asset bubble in the country, wherein the product being manufactured is in high demand due to underlying market conditions. In case the bubble pops and the asset value starts declining, it can cause investors to incur absolutely massive losses.
- Similarly, value traps are a rising possibility when it comes to Multibagger stocks. Products manufactured by a company might seem like a profitable investment option in the present but would lead to losses in the long term. While investors can expect prices of such shares to exponentially rise in the future, the lack of any intrinsic value prevents such a situation from happening.
Thus, investors need to carefully analyse the financial statements of a company and the prevailing situation in stock markets needs to be studied before they can go ahead and put their money in multibagger stocks.
What are the Alternative Investment Options Available To An Individual?
As multibagger stocks are slightly risky, they are not ideal for the risk averse investor. They can use any of the following investment tools to bolster their stock market portfolio:
- Debt funds
The corpus of these Mutual Funds primarily comprises of debt securities issued by a company. Debt financing poses a liability for businesses, and thus are repaid at first on revenue generation. This does a great job reducing the risk associated with them.
Individuals having a low aptitude for risk can choose to invest in the various debt Mutual Funds registered with SEBI over Multibagger stock list in India. Different government securities and liquid money market instruments are included by portfolio managers, to ensure maximum return realization at minimum associated risks.
- Hybrid Funds
These funds are also known by the name, balanced advantage funds. They help investors achieve the optimal balance between risk and return. Both equity and debt securities are present in the portfolio of such funds. The equity stocks present in the corpus provide great returns, while the volatility of such funds due to market influences is minimized with the help of the debt-oriented securities.
- Large-cap funds
Multibagger shares are generally issued by companies which have launched themselves in the market. This increases the risk associated with investing in them. Large-cap funds, on the other hand, choose to invest in equity securities of companies having a market capitalization of higher than Rs. 20,000 Crore.
These companies come with a strong reputation and tested financial strength. That reduces the chances of low return generation. Large-cap companies have adequate financial resources to withstand any stock market downturn as well. This ensures that the capital of the investors is preserved.
Multibagger stocks: Conclusion
Multibagger stocks in India are great for investors who are seeking to bring about a monumental increase in their wealth through capital appreciation of respective securities. The incremental value of these stocks is many times higher than the acquisition cost, the capital gain profits are massive. However, it’s not all rosy and pink, the risk associated with multibagger stocks is very high. So choose carefully before investing.
NSC (National Savings Certificate) Interest Rates: Eligibility, Application Process, Tax Benefits, Rates, FAQs
National Savings Certificate, more popularly known as NSC is offered by the Government of India as a secured investment scheme. The NSC is essentially a savings bond which is distributed among individuals through post offices. People can invest as much as they want in the NSC as there is no cap in the number of certificates that individuals can purchase. One of the biggest plus points of the NSC as an investment tool is the fact that its interest rates are fixed and not dependent on market volatility. The NSC is a great savings option for everyone, but especially great for average to low income earners. Since NSC can be purchased from post offices, it is easily available for people all across the country. This has made it extremely popular. However, the NSC isn’t available for purchase for people belonging to these categories: Non-Resident Indians (NRI), Person of Indian Origin (PIO), and Overseas Citizens of India (OCI) and members of the Hindu Undivided Families (HUF). Let’s find out more about the NSC and the interest rates offered by this safe investment tool.
NSC Interest Rates: Eligibility, Application Process, Tax Benefits, Rates, FAQs
NSC: Eligibility Criteria and Document Requirements
The NSC’s eligibility criteria are quite simple. The investor has to be a resident of India. And that’s it. There is no age limit, however, the essential documents need to be submitted prior to the purchase. The lack of an age restriction allows individuals from all age groups to benefit from the plan. Along with checking the NSC interest rate chart a little further down the post, investors should also remember to check out the list of documents that are essential for investing in the NSC. Here are those documents:
- Fully filled-in NSC application form.
- Any Government-issued identification proof like a voter ID card, Aadhaar card, passport, driving license, etc.
- Address proof of the applicant like electricity bill, landline bill, etc.
- Passport-sized photograph of the applicant.
NSC: Application Procedure
The application procedure for NSC is quite simple. Interested applicants can simply apply for the certificate at their nearest post office along with the documents mentioned above. The payment can be made via cash or cheque and that’s about it, you will have your NSC in your hands.
NSC Interest Rates: Benefits
While NSC interest rates are quite lucrative, they also have a host of other benefits. These are some of them:
- Fixed return: Return on any investment in NSC is fixed since the rates of interest offered on them are not subject to market fluctuations. However, it is essential to note that the government has the right to revise this rate every 6 months.
- Tenure choice: The two different issues by the Government of India offer two different rates of interest to choose from. Investors can opt to go for a tenure of 5 or 10 years, with NSC rate being decided by their choice of tenure.
- Choice of investment amount: The minimum investment amount for NSC stands at Rs.100. This makes it a popular choice of investment for low-income earners. Furthermore, individuals can choose to invest in multiples of Rs.100. There is no upper limit to investment in NSC, thereby allowing individuals to invest as per their income, savings and long-term financial goals.
- Tax benefits: Quite a few tax benefits are offered on investments made in NSC. This includes both on the principal invested as well as the interest earned as per the NSC rates. Investments in NSC qualify for different deductions under section 80C of the Income Tax Act and other sections, which are discussed later.
- Easy access: Investment via post offices across India has made NSC readily available to the Indian population and ultimately led to its popularity.
- Loan options: While high NSC interest rate makes it an attractive investment option, a significant feature which makes it even more lucrative is the availability of loans against these investments. NSC certificates can be provided as collaterals at different financial institutions to avail secured loans. One can thus, conveniently fulfil various financial requirements by availing such loans. Also, as secured loans carry a lower risk for lenders, interest rates offered on them are convenient, which makes repayment affordable too.
- Easy nomination: Along with attractive NSC interest rates, the investment plan also allows an investor to nominate another to receive benefits in case of his/her demise. The nominee can thus receive the entire corpus after scheme maturity.
- Easy transfer: This policy can be easily transferred from one post office to another in case an investor is relocating. It does not impact the interest since returns are generated at the current NSC interest rate decided by the Government of India. Additionally, this scheme also allows investors to transfer ownership (can only be used once).
What are the Tax Benefits on NSC Interest Rates?
While NSC interest rates offer a substantial return on investment, they are also a great tool for getting some tax benefits. Most people who studied how to calculate income tax in school, must be somewhat familiar with the tax deductions provided by NSCs. Under Section 80C of Income Tax Act 1961, investments in NSC are eligible for deduction from the taxable income up to a sum of Rs. 1.5 Lakh. Additionally, the interest earned every year is added back to the principal amount and deemed invested until maturity, thus becoming eligible for tax deductions u/s 80C. However, the interest earned upon maturity is taxable.
Let us consider an individual invest a sum of Rs. 50,000 for a tenure of 5 years. With the relevant NSC interest rate being 8.5%, the interest accrued at the end of the first year is Rs. 4250. In the second year, the interest is compounded, thereby making the investment sum for the second year to be Rs.54,250. The interest earned in the final year of maturity is only subject to tax applicability. However, it is taxable only if added with other earnings of the individual and crosses the minimum tax slab.
Who should consider investing in NSC?
This investment scheme, with its stable return on NSC interest rates, is ideally suited for low and average income earners. People who don’t want their investments to be affected by market fluctuations but generate good returns should definitely invest in the NSC. With a low investment amount for savings, any disposable amount over Rs. 100 that an earner has can be invested in these certificates.
The NSC interest rates offered by the Government of India are attractive and is one of the best options for individuals who do not intend to bear any risk on their expected returns. However, even though NSC interest rates are high, they tend to fall short on beating inflation (especially the current rate).
NSC Interest Rates
NSC interest rates can vary from person to person, depending on the maturity period of the NSC. depending on their NSC’s maturity. These schemes introduced by the Government of India are available with two tenure variants for maturity. Check out the rate of interest as per the maturity periods along with their tenure and issue numbers:
|Name||Tenure||Rate of Interest||Compounding Frequency|
|NSC 8 Issue||5 years||8.50%||Half-yearly|
|NSC9 Issue||10 years||8.80%||Half-yearly|
Interest Applicability on Premature Withdrawal of NSC
The different interest applicabilities are mentioned in the table below.
|Time of Withdrawal||Interest Applicability|
|Withdrawal before the completion of 1 year||No interest|
|Withdrawal after the completion of 1 year||Interest offered at the rate applicable then.|
NSC can also be withdrawn under the following specific scenarios. During premature withdrawal, the return is calculated as per the National Saving Certificate interest rate though the tenure is shorter.
- The death of the owner.
- Forfeiture of the certificate.
- In case a court of law orders the withdrawal of the invested amount.
Every applicant needs to note that while NSC interest rate remains unchanged, you will need to furnish the following documents in case you want to withdraw your NSC prematurely:
- Original NSC documents.
- Filled in NSC encashment form.
- Identity proof similar to application requirements.
- For minors, the attestation of the guardian must also be presented.
- For nominees applying for withdrawal, Annexure 1 and 2 forms must also be submitted.
Usually, the post office releases the corpus via cheque.
NSC Interest Rates: FAQs
Can an individual invest in NSC along with another investor?
Yes, there are 3 types of NSC, depending on the number of owners of these certificates. While single-holder certificates have individual owners, Joint types A and B are issued to 2 individuals. In the case of A, interest is paid to both, while in the case of Joint investment type B, it is paid to one individual.
How can one pay for the purchase of NSC?
You can purchase an NSC via payment made either through cash or cheque.
Can I immediately transfer my certificate to another person?
It officially takes 1 year to complete the transfer of the National Savings Certificate.
Can I buy NSC from anywhere other than the post office?
No. NSC can only be bought from the post office.