No credit profile? Here is what you can do to build a robust score

 No credit profile? Here is what you can do to build a robust score

A good credit score is crucial for securing loans and credit cards. But what about those who have never borrowed and hold a clean slate? If your credit profile does not exist, here is what you can do to start building it.

Start with a secured credit card:

One of the easiest ways to start building credit history is by applying for a secured credit card. This type of credit card is issued against a fixed deposit (FD). By using this card for small expenses and repaying the bill on time, you can begin generating a credit history.

Apply for a small loan from a bank or NBFC:

Another effective way to build your credit score is through small loans. Some fintech lenders and NBFCs provide personal loans to first-time borrowers.

Use ‘buy now pay later’ (BNPL) services:

Many fintech platforms offer BNPL options that are reported to credit bureaus.

Check your credit report regularly:

Once you begin building a credit record, monitor the information accuracy.

Be patient and consistent:

Building credit takes time. Focus on making all payments on time and managing your finances responsibly.

 

For More Details: Pooja Manoj Gupta, visit www.giia26.com

Email: pmgiia26.com Mobile  9868944340

 

 

Home Insurance

HOME INSURANCE

Cover should suffice to rebuild structure, replace contents

Recent earthquakes in the Delhi-National capital region (February 17) and in West Bengal (February 25) underscore the importance of buying home insurance. A home is often an individual’s most significant asset.

Unforeseen events like earthquakes, fires, and floods can cause devastating damage, possibly wiping out your financial security. Without insurance, homeowners have to bear the full financial burden of repairs and reconstruction.

What this policy covers

A home insurance policy covers damage from earthquakes fires, explosions, floods, landslides, cyclones, storms, aircraft damage, and acts of terrorism. It protects both the structure of the house and its contents.

After a disaster, homeowners may need temporary accommodation. Home insurance can cover relocation expenses after disasters if the policy includes a ‘living expenses’ and-on. It covers the costs of boarding, lodging, storage, and moving.

Sum insured and payout

Buy a sum insured that can meet the cost of rebuilding the house (excluding land value).

Most policies settle claims on a reinstatement value basis, which means that insurers reimburse the actual cost of repair or rebuilding. If a policy has a sum insured of Rs 1 crore, but repairs cost Rs 60 lakh the claim payout will be the latter amount. The amount paid is calculated using the carpet area in square feet multiplied by the cost per square foot of reconstruction in that region.

Periodically increasing the sum insured to match rising construction costs. For contents, the sum insured is usually decided based on the declared value of items. In Griha Raksha, the standard home insurance policy, 10 per cent of the building’s sum insured is allocated for contents. Jeweler up to Rs 5 lakh is covered without a specific declaration. Higher values require a declaration.

Selecting right policy

Buyers should identify the likely natural calamities in their area and buy a suitable policy. For instance, those living in a high seismic activity zone like the NCR must have cover against earthquakes.

Very few people in India opt for home insurance of stay protected against natural and manmade perils. Many homeowners also underestimate he coverage required. The policy must cover the full cost of rebuilding the house and replacing its contents. Supplement the main policy with riders. Also, look that claim settlement ratios of insurers.

Home insurance falls under the broader category of fire insurance. Claim settlement ratios for fire insurance available on the Insurance Regulatory and development Authority of India (Irdai) website, should be a consideration while selecting an insurer.

Exclusions, waiting periods

Buyers must be aware of what is on covered by this policy. Damages caused by seepage, poor construction quality, malicious acts if the customer, and war are not covered. Theft and burglary require an additional cover. Premiums vary based on construction materials used, age of the building coverage limits, deductibles and safety features such as fire alarms and security systems in a house.

Lastly, jewellery kept in bank lockers is also usually not covered by a home insurance policy. For that, you need to buy a bank locker protector policy.

For More Details: Pooja Manoj Gupta, visit www.giia26.com

Email: pmgiia26.com Mobile  9868944340

Are virtual credit cards safer than physical cards?

 Are virtual credit cards safer than physical cards?

Virtual credit cards are digital versions of physical cards, designed specifically for online transactions. They generate temporary numbers for secure online transactions.

• Physical cards are vulnerable to skimming but can be protected with contactless payments and secure ATMs. Virtual cards eliminate skimming risks as they are entirely digital.
• Physical cards are more versatile, supporting POS, ATM, and online transactions. Virtual cards enhance security for online shopping.
• Physical cards remain essential for in-store purchases, travel, and emergency cash.

 

Points to keep in mind while using virtual credit cards:

ENHANCED SECURITY:

Virtual cards offer spending limits and deactivation options but aren’t entirely fraud-proof.

TRANSACTION MONITORING:

Users should regularly check for unauthorized activity.

ONLINE-ONLY USE:

Virtual cards aren’t accepted for in-store transactions.

CYBER THREATS:

Be cautious of phishing attacks and report suspicious activity immediately.

For More Details: Pooja Manoj Gupta, visit www.giia26.com

Email: pmgiia26.com Mobile  9868944340

Buying health insurance for senior citizens

 Buying health insurance for senior citizens: How to lower your premium

The cost of health care services, including hospitalizations, medicines and doctor’s fees, has been soaring since the Covid-19, pandemic, pushing up health insurance premiums too.

It is also posing a challenge before senior citizens who pay a higher premium to get the cover. However, the elderly can bring down their insurance premiums by employing smart strategies.

Higher deductibles option

To begin with, they can explore the higher deductibles option. This measure can help slash premiums by around 10-20 per cent.

Co-payment option

They can also consider the co-payment option, where they will pay 10-50 per cent of treatment costs. So, for instance, if you opt for a 10 per cent co-pay on an Rs 2 lakh hospital bill, you will pay Rs 20,000, while the insure will cover the remainder. Besides these strategies, seniors can combine their base plan with a top-up to avail themselves of extended coverage at relatively lower costs than purchasing a new policy.

For More Details: Pooja Manoj Gupta, visit www.giia26.com

Email: pmgiia26.com Mobile  9868944340

EQUITY SAVINGS FUNDS

 EQUITY SAVINGS FUNDS

Ideal for investors seeking FD-plus returns, low volatility

Market volatility has made equity allocation difficult, especially for conservative investors. Equity Savings Funds (ESFs) offer a solution. A recent new fund offer (NFO) of an ESF from WhiteOak Capital Asset Management Company (AMC) highlights their growing appeal.

ESFs offer a blend of equity, debt, and arbitrage with lower volatility than pure equity funds, which is appealing amid recent market swings. They also deliver tax-efficient returns. As of January 31, 2025, ESFs managed assets worth RS 42,161 crore (Association of Matual Funds in India data).

How ESFs work

ESFs allocate up to 65 per cent of assets across stocks and arbitrage. Typically, 15-35 per cent is invested in stocks, and the rest in spot-future arbitrage and bonds. Though fund managers have flexibility in stock and bond selection, portfolios usually comprise large cap stocks and high-quality bonds, besides government securities.

ESSFs are classified as equity-oriented for tax purposes, with gains above RS 1.25 lakh on units sold after a year taxed at 12.5 per cent.

Manage volatility well

ESFs are less volatile owing to their diversified mix. These funds are relatively less volatile compared to pure equity schemes as they invest only a portion of their portfolio in unhedged equity and the rest in stable asset classes like debt and arbitrage, which together form a large part of the portfolio. Diversification mitigates risk.

The diversification across these asset classes, which often exhibit low correlation with each other, aims to enhance the potential for superior risk-adjusted return over the medium to long term compared to investing solely in individual asset classes.

Alternative to debt

ESFs can outperform fixed deposits over three-and five-year horizons. ESFs with the ability to offer moderate and tax-efficient returns with tolerable level of volatility, serve as a good alternative to debt-oriented mutual funds or traditional fixed-income instruments. Long-term capital to be parked in fixed income can be put into ESFs.

They can be considered as a stable investment option during periods of market uncertainty while still capturing some upside from marginal equity exposure.

 Risks to consider

ESFs are not entirely risk-free. Market-related uncertainties and volatility can impact their near-term returns.

Short-term losses are possible due to equity exposure. Over the month ended March 5, ESFs have lost 2.04 per cent on average. All the asset classes carry their own risks.

Risks stem from equity market fluctuations impacting returns and arbitrage opportunities drying up during phases of low volatility. The debt portion faces interest rate sensitivity, a factor in today’s environment. Credit risk in debt instruments is also a factor to watch, so we only stick to government and high-quality corporate bonds. Investors must be prepared for long-term returns being lower than from pure equity funds.

For conservative investors

ESFs suit conservative investors looking for moderate equity exposure. Conservative investors seeking reasonable, tax-efficient returns with lower volatility may find these funds suitable for allocation a significant portion of their surplus capital.

Before investing, investors should assess asset allocation and check the portfolio construction. They must enter with a minimum three-year horizon.

 

For More Details: Pooja Manoj Gupta, visit www.giia26.com

Email: pmgiia26.com Mobile  9868944340

Five Mantras for women to take charge of their own finances

 

Five Mantras for women to take charge of their own finances

Lack of involvement

Despite rising literacy, professional exposure, and financial independence, many young people, including women, are reluctant to take full control of their finances.

This hesitation stems from social expectations, lack of exposure to financial matters growing up, and prioritizing family responsibilities over personal wealth building. Most women leave financial decisions to the male members of their family.

Learn about investing and equip yourself to handle your money.

Understand what is happening to your portfolio. Read, ask questions, and prepare as you would for a work meeting or an interview.

No budgeting, saving

Many young individuals fail to plan their budget. The are neither tracking their expenses, nor planning for long-term goals. Impulsive spending often leads to inadequate savings, leaving them vulnerable during emergencies, and at retirement.

Follow the 50-30-20 rule: Allocate 50 per cent for necessities, 30 per cent for discretionary spending, and 20 per cent for savings.

Lack of a contingency plan

It is critical to build a corpus for any unforeseen financial stress. Build an emergency fund covering 6-9 months of essential expenses.

It is crucial to allocate money into different buckets based on horizon: emergencies, intermediate goals (car purchase, house down payments), and long-term goals (children’s education, retirement).

Inadequate insurance

Working women have economic value and must buy term insurance if they have financial dependents or obligations. Experts recommend coverage of at least 10 times their annual income. Health insurance is equally vital. Without it, a medical emergency could wipe out savings. Buy comprehensive health insurance covering medical expenses, critical illnesses, and maternity. Also buy accident and disability cover.

Investing:  Avoid extremes

Investing in unfamiliar or excessively risky assets must be avoided. Investing in high risk options like direct stocks, futures and options, or crypto-currencies without proper knowledge can lead to losses. Instead, one should build a diversified portfolio with equity, debt, and gold, and maintain an asset allocation that matches one’s risk profile.

Focus on risk-adjusted returns. Women should not rely solely on safe but low-yield fixed-income products. Explore options such as mutual funds, index funds, or retirement plans rather than avoiding risk entirely.

GET SAVVY ABOUT DEBT

• Follow the 50-30-20 rule: Allocate 50 per cent for necessities, 30 per cent for discretionary spending, and 20 per cent for savings
• Distinguish between good loans (taken for asset building, business growth, or education) and bad loans (used for personal consumption)
• Focus on paying off high-interest debt first
• Maintain credit card usage at 30 per cent of the total credit limit to maintain a good credit score

 

For More Details: Pooja Manoj Gupta, visit www.giia26.com

Email: pmgiia26.com Mobile  9868944340

EPFO members to get higher pension

    22,000 EPFO members to get higher pension:             How to track your application

As many as 17,48,768 applications were submitted by Employees’ Provident Fund Organisation (EPFO) members and pensioners seeking higher pension benefits under the Employees’ Pension Scheme (EPS), 1995. As of January 28, EPFO has issued demand notices in 1,65,621 cases, informing members about the balance amounts required for higher pension eligibility. Meanwhile, 21,885 pension payment orders have been processed and issued.

How to track EPFO higher pension application status?

• Visit the EPFO unified member portal.
• Click on ‘track application status for pension on higher wages’.
• On the next page, select ‘click here’ under the same tab.
• Choose and enter either your application acknowledgement number, UAN number, or PPO number.
• Fill in the captcha code, tick the consent box, and click on ‘get OTP’.
• Enter the received OTP and click ‘get status’. Your application status will then be displayed on the screen.

For More Details: Pooja Manoj Gupta, visit www.giia26.com

Email: pmgiia26.com Mobile  9868944340