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(Serious) Words of Wisdom : "The stock market is a giant distraction from the business of investing." ~ John Bogle

Inflation Indexed National Saving Securities announced

Last week, RBI announced the details of the much-awaited Inflation Indexed National Saving Securities for the retail investors; to be launched in the 2nd half of this month. These would be cumulative in nature and hence are designated as Inflation Indexed National Saving Securities - Cumulative or IINSS-C. Non-cumulative securities would be introduced in due course of time.

While the issue dates would be announced shortly, here are the salient features of IINSS-C.

Face Value: Rs.5000
Min Investment: Rs.5000
Max Investment: Rs.5 lakhs per person per annum
Tenor: 10 years

PAN No.: Mandatory for investment of Rs.50,000 or more (excepting a few exceptions)
Availability: With the banks and Stock Holding Corporation of India Ltd (SHCIL)
Eligibility: Individuals, HUFs, Trusts and Charitable Institutions

Rate of interest: 1.5% + Inflation rate  [So if inflation is 10%, interest rate would be 11.5%]
Inflation rate: Final rural+urban combined CPI (applied with a lag of 3 months) [So interest for Jan 2014 would be based on inflation in Oct 2013]
Compounding: Half-yearly

Early redemption: Permitted after three years (one year for senior citizens above age 65)
Early redemption dates: Only on coupon dates
Early redemption penalty: 50% of the last coupon 

Nomination: Permitted (for individuals)
Transferability: No
Loans: Allowed to pledge as a collateral

In tomorrow's post we will evaluate whether we should invest in Inflation Indexed National Saving Securities - Cumulative or not.

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... THREE VALUABLE TIPS ...

1. 'Stock Markets At An All-time High' Is Absolute Nonsense
All-time high at the Stock Markets
Do you believe, at current market levels, you are standing at the edge of a cliff?

 


2. Family Floater Health Policy: Insure Your Parents Separately
Family Floater Health Insurance
Wider and cheaper health cover is possible if parents are insured separately.

 


3. Herd Mentality: Why Do We Follow The Crowd? And Is It OK?
Herd Mentality: Is it good?
(Blindly) follow the crowd and your investments could suffer deep losses.