04 KALEIDOSCOPE ERGO Monday, March 9, 2009

Ask your query

I am Vaijanthi working for an advertising agency with
an income bracket of Rs. 4 lakhs. I make an investment
of Rs. 80,000 in “section 80C”, should I use my full
quota?
An investment of Rs.1 lakh is definitely beneficial in
the long run and this can be looked for a long-term
Dream home at 8%
saving and investment for different purposes. In a nor- SBI’s reduced
mal course of life with out this section we may not make
those savings or investments. interest rate on
However, utilisation of full amount depends on a
number of factors, including current life style, last year’s home loans should
expenses and expenses for the next year.
By utilising the maximum limit in ATC, the maximum reopen your plans
tax savings that we can get in your income slab would be
Rs. 21,000. As you have already invested Rs. 80,000, your to get a home
tax burden would be Rs. 21,000 and a further investment
would reduce this to Rs.12,000, which would be a reduc-
tion of Rs.9,000. SNEHA BAJAJ
The decision is in your hands, but do not borrow for sneha@finerva.com
investment in tax savings.

T
he State Bank of India now
offers its customers a
chance to avail a home loan

Mutual Funds offer by charging an interest of 8

Fortis Fixed Term Plan
Series 14 - Plan C is a close-ended income scheme.
The investment objective of the scheme would be to
achieve growth of capital through investments made in a
basket of fixed income securities maturing on or before
the maturity of the scheme.
DBS Chola Tax Advantage Fund
Series 1 is a 10-year close-ended Equity Linked Saving
Scheme (ELSS). The objective of the scheme is to gener-
ate long-term capital growth from a diversified portfolio
of predominantly equity and equity-related securities
and also to enable investors to get income tax rebate as
per the prevailing Tax Laws, which are subject to appli-
cable conditions.
Taurus Ethical Fund
Is an Open Ended Equity Oriented Scheme. Its ob-
jective is to seek growth of capital in accordance with
“Islamic” principles. The investment strategy aims to
diversify the portfolio by investing in various companies
across sectors and themes to maximise returns and con-
trol risk.
HDFC Fixed Maturity Plan
14M February 2009 Sr-10 (1) is a close-ended income
scheme. The investment objective of the plans under the
scheme is to generate regular income through invest-
ments in debt/ money market instruments and govern-
ment securities.
per cent. Many of us were seeing
this service to have some hidden
pitfalls. SBI, in fact, does provide
this facility, which functions as
shown in the box:
How others function
Compare this with a few other
banks. Bank of Maharashtra, for
example, offers a five-year fixed
rate of interest at 9.25 per cent,
for loans up to Rs. 20 lakhs. So is
the case even with Andhra Bank.
So a customer who takes a
home loan from either of the two
banks mentioned will have to pay
comparatively more when com-
pared to what one has to pay if
one avails the same facility from
SBI. As initially he/she will have
to pay just 8 per cent for the first
year and then 9.25 per cent for
the next 25 years, if he/she plans
to repay the loan of Rs. 20 lakhs in
25 years.
More recently Canara Bank
had entered this new selling
game by giving a housing loan at
8.25 per cent for the first year and
then froze it to 9.25% for the next
four years and a different rate for
the remaining years.
This facility provided by SBI or
Canara Bank looks similar to the
much hyped “Balloon loans” in
the United States.
An added advantage being that

News you can use premature termination is possi-

ble at any point of time during
the term with no additional
charges. Amidst all the gloom
ICICI cuts home loan rates surrounding the recession and
ICICI Bank has announced a rate cut of up to 50 basis the economic downturn, this
points on its housing loans. The rate of interest for loans seems to be a silver lining in the
up to Rs. 20 lakh will be 9.75 per cent and 10 per cent for dark clouds for people who had
loan amount of Rs. 20 - 30 lakhs and above that it will be postponed their plans about buy-
11.5 per cent. ing their dream home. ■