Download Tax Saving Mutual Fund Application Forms
Invest In Tax Saving Mutual Funds Online
Leave a missed Call on
94 8300 8300
Home Loans that Save Time and Money
You can deposit surplus money in these special home loan schemes and reduce your loan tenure significantly in the process
IF YOU are thinking of taking a home loan and are confident of generating a surplus every month after paying the regular EMI, you can opt for loan schemes with an overdraft facility that not only cut interest payments significantly, but also reduce the loan tenure. State Bank of India, Standard Chartered Bank, HSBC and Central Bank of India offer such home loan products.
Under the scheme, as a home loan borrower, you can deposit any surplus that you have into the home loan account, though you retain the option of withdrawing the sum, if required.
By depositing an amount higher than your EMI, you save on interest outgo. The principal amount on which the loan interest is calculated is the outstanding principal minus the savings deposited in the Smart Home account every month, over and above the EMI.
THE ADVANTAGES
Essentially, such home loan schemes work like current accounts with an overdraft limit. They also let the borrower maintain liquidity of his or her savings because the surplus funds parked in the current account are available for daily banking transactions. HSBC's Smart Home loan and Central Bank of India's recently launched Cent Home Double Plus are two home loan schemes with the aforementioned advantages.
Keeping any surplus in loan accounts is of greater value than investing in fixed deposits. This is more tax-efficient as interest saved via such schemes is not taxable, whereas the income earned is. If the excess funds were to be invested in interest bearing instruments, the interest earned would attract income tax and the effective rate of earning would be much lower. In fact, even if you are already servicing a regular home loan, you could look at switching to banks that offer overdraft-linked home loan schemes. The effective rate of interest will certainly be lower compared to the conventional home loan products.
THE COSTS
The main drawback of such schemes is the higher interest rate--up to 25 basis points-compared to a regular home loan. Also, the product may not work favourably if you don't use the account for regular transactions. You should ensure that your routine banking transactions are carried out via this account. Maintaining a balance that is equal to 2-3 EMIs will also help deliver the results.
DOES IT SUIT YOU?
Such schemes may particularly appeal to double-income families who are in a relatively comfortable financial position. It's best to evaluate the terms and conditions of the schemes and, more importantly, assess your future income and savings. You need to ascertain whether your budget will allow you to make the most of the scheme's feature to offset higher interest rate of around 25 basis points that these schemes carry.
Borrowers who have surplus funds to park in the account, over and above the monthly EMI, should consider this product favourably since the savings on net monthly interest payments would justify the additional premium they pay for this feature.
If you are servicing a regular home loan and plan to switch to such schemes, you need to carry out a cost-benefit analysis to ascertain whether a simple prepayment would be cheaper .
For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call
Leave a missed Call on 94 8300 8300
Leave your comment with mail ID and we will answer them
OR
You can write back to us at
PrajnaCapital [at] Gmail [dot] Com
---------------------------------------------
Invest Mutual Funds Online
Download Mutual Fund Application Forms from all AMCs
Download Mutual Any Fund Application Forms
---------------------------------------------
Best Performing Mutual Funds
- Largecap Funds Invest Online
- DSP BlackRock Top 100 Fund
- ICICI Prudential Focused Blue Chip Fund
- Franklin India Bluechip
- ICICI Prudential Top 100 Fund
B. Large and Midcap Funds Invest Online
- ICICI Prudential Dynamic Plan
- HDFC Top 200 Fund
- UTI Dividend Yield Fund
- Birla Sun Life Front Line Equity Fund
- Franklin India Prima
C. Mid and SmallCap Funds Invest Online
- Reliance Equity Opportunities Fund
- DSP BlackRock Small & Midcap Fund
- Sundaram Select Midcap
- IDFC Premier Equity Fund
- Birla Sun Life Dividend Yield Plus
- SBI Emerging Businesses Fund
- HDFC Mid-Cap Opportunities Fund
- ICICI Prudential Discovery Fund
D. Small and MicroCap Funds Invest Online
- DSP BlackRock MicroCap Fund
- Franklin India Smaller Companies
E. Sector Funds Invest Online
- Reliance Banking Fund
- Reliance Banking Fund
- ICICI Prudential Banking and Financial Services Fund
F. Tax Saver Mutual Funds Invest Online
1. ICICI Prudential Tax Plan
2. HDFC Taxsaver
- DSP BlackRock Tax Saver Fund
- Reliance Tax Saver (ELSS) Fund
G. Gold Mutual Funds Invest Online
- Relaince Gold Savings Fund
- ICICI Prudential Regular Gold Savings Fund
- HDFC Gold Fund
- Birla Sun Life Gold
H. International funds Invest Online
1. Birla Sun Life International Equity Plan A
2. DSP BlackRock US Flexible Equity
3. FT India Feeder Franklin US Opportunities
4. ICICI Prudential US Bluechip Equity
5. Motilal Oswal MOSt Shares NASDAQ-100 ETF
