financial services companies in delhi

This way, companies can earn some extra money. However, if they keep this money in their current account in banks, they will not earn any income for these four days.

Large corporates have the financial muscle to have a dedicated treasury department that can take care of such opportunities. However financial services companies in delhi, SMEs, being much smaller in size and not having enough financial strength to have a dedicated team to look after such strategies, require to think smartly or depend on fund houses for solutions.

financial services companies in delhi

Alam points out that companies should always look for such opportunities for better returns on their cash without taking much risk financial services companies in delhi. One such opportunity will arise during the week beginning August 11.

Since August 15 is a holiday and August 16 and August 17 are Saturday and Sunday, a company with a free cash flow can deploy the same in liquid funds on August 14, which is a Thursday, and withdraw the same on August 18, which is a Monday.

Alam points out that companies should always look for such opportunities for better returns on their cash without taking much risk financial services companies in delhi. One such opportunity will arise during the week beginning August 11.

Since August 15 is a holiday and August 16 and August 17 are Saturday and Sunday, a company with a free cash flow can deploy the same in liquid funds on August 14, which is a Thursday, and withdraw the same on August 18, which is a Monday. 

financial services companies in delhi

During the last one year, liquid funds gave a return of about 8% per annum on a pre-tax basis. So on a cash deployment of Rs 2 crore in liquid funds for six months, on a 4% pre-tax basis, the company earned about Rs 8 lakh in total. "This extra income was then used for the company's employee benefit scheme," says Alam. Since the income was expended for an employee benefit scheme, this Rs 8 lakh was not taxable to the company either. According to Alam, this company financial services companies in delhi, without taking any extra financial burden, was able to give something to its employees just by using some smart cash management techniques. 

financial services companies in delhi

According to Alam, each year, the company had Rs 2 crore freely available for 52 weekends, which could be put into liquid funds on a Friday and withdrawn on the following Monday -that is, for three days.

"So the company deployed the cash in liquid funds for about 150 days a year. In addition to this, there were also holidays during the year when it could deploy the free cash in liquid funds," says Alam. So, in effect, financial services companies in delhi the company put its available cash in liquid funds for about half a year, that included the weekends and the days around the holidays. 

financial services companies in delhi

An SME client of Tanwir Alam, founder & MD, Fincart, wanted to start a new employee benefit scheme that was to cost the company Rs 6-8 lakh per annum. After going through the books of the company financial services companies in delhi , it was seen that it often had extra cash of about Rs 2 crore in its bank account.

And almost surely this cash was available to the SME during the weekends. So Alam suggested the company deploy this extra cash in liquid funds during weekends and holidays for some higher returns. 

The insurance company may also declare and pay 'loyalty bonus' on maturity. The sum assured along with declared bonus gets paid to the insurer either on death or maturity. Fincart is a Delhi based FinancialCompany provides the best financial risk protection services.

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The Endowment Maze

An endowment policy is a combination of insurance and investment, where a portion is allocated towards mortality cover and the rest gets invested. You pay a regular premium (frequency could vary—monthly, quarterly, half-yearly or annually) and in return get a life insurance cover (the sum assured, payable at death) along with other maturity benefits—regular annual bonuses called as 'reversionary bonuses' that accrues on this policy Insurance Planning Services in India. An important point to remember here is that the 'bonus', usually declared annually, does not compound, it only accumulates. Meaning, the return declared at the end of the year is not re-invested and therefore stagnant.

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This traditional life insurance product, Insurance Planning Services in India suitable for conservative investors, usually gives a return of around 6%. But is it the best bet for even the risk averse investors? Certainly not!

Here are two alternatives— one for the ultra-conservative and option two for a slightly aggressive investor—that can not only fetch better returns but gives a five-times higher insurance protection compared to an endowment plan Insurance Planning Services in India. Worried about the tax incentives? Our alternatives will get you better deductions as well. But first, for a fair comparison, you must know how much you stand to get from the endowment plan.

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Budget has enhanced the Section 80 C limit and insurance products are a hot favourite tax saving tool in that category. Since Unit-linked plans do not have a very good reputation, it is usually money-back and endowment policies that land in your portfolio Insurance Planning Services in India. But do you know what an endowment policy is? You would have heard about it and some of us would also have it in our insurance portfolios. But you wouldn't have even bothered to understand the policy benefits or the product structure, forget going through the details—clauses, policy wording, etc.