Need help?? Your guide for PF Withdrawal

I’m writing this article to help people with right information to get the PF Withdrawal status, amount and many more things. I know it’s not related to investment or stock market, but it is worth to put this important information on this forum as it’s about getting our own money.

Background:

I know many people who have opted to withdraw their PF amount during their job change. They did so may be because of need for some liquid money. But this withdrawal amount takes years to get credited into their bank account and there’s no clue where to get the status of the claim. This article may help all such individuals.

I would suggest Individuals to be proactive and taking steps forward to get this amount, rather than just wait for employer and PF department to work for you.

Tips and Tricks:

o   Don’t forget to check with employer’s account department about your willingness for the PF withdrawal for PF transfer during your exit formalities from the organization. For now we’ll concentrate on the PF withdrawal.

o   You’ll get PF withdrawal form – Form -19 and Pension withdrawal form – Form 10C from the employer.  Please fill the latest and accurate information about your email id and phone number. Just be aware that PF department has come up with SMS facility where they’ll send you status of your claim through SMS. You need to mention your mobile number at the top of the withdrawal forms). For more information please visit http://www.epfindia.com/docs/SMSAdNew.pdf.

o   Mention clear bank account details in the PF withdrawal form. Please provide a clear photocopy of your bank passbook or cancelled cheque of the account where you want your money to be credited.

o   Make sure that the mobile number and the account which you’ve provided in the Form-19 are active till you get your claim.

o   Employer would submit your claim/Form 19 to the PF department after 60 days from your last working day. Generally they do this in bulk when there’s some good amount of PF withdrawal form to be submitted to the PF department. So it would take 90-120 days for your claim to be submitted with PF department. It may vary if employer is using third party to manage all this activity. In that case it would take much longer time. Now here’s the time where you need to be proactive and follow-up with Finance/HR department of your previous employer and asking for submission at the earliest. Don’t forget to ask them to provide duly signed copy of the withdrawal form from PF department. Even scanned copy should be fine. This would vouch the exact date on which you claim has been submitted to the PF department.

o   PF department has started online facility to know the claim status of your PF withdrawal. You need to select the office and mention the PF account number to know the status.  http://www.epfindia.com/ClaimStatus_New.html.  I would request you to wait for at least 15 days from the date your claim is submitted to the PF department and then check the status of your claim.

o   In case you don’t find your claim status on the central portal then you can check your claim at the regional site. You can get sites about different regional PF offices from http://www.epfindia.com/RegSites.html

o   Generally it takes 30-60 days for the PF department to process your claim. If you don’t find status of your claim on any of the portal then do submit your grievance at the portal. http://epfigms.gov.in/. This is really effective and I’ve personally resolved my claim using the portal. You’ll definitely get reply using this forum. Now with the awareness of this system many people are using this forum so you may need to send reminder for your grievance and you’ll definitely get the response.

o   One you submit your grievance you’ll get the contact person details for your grievance along with email id and contact number. You may need to call and drop email to check the status of your grievance. Resolution to your grievance in turn will resolve your PF claim as well. You can check the status of your grievance on the same portal http://epfigms.gov.in/. You can get the additional contact numbers of PF department from your previous employer as well.

Things to Remember:

o   You’ll be receiving two different amounts in your account. One is for your PF withdrawal and one is for Pension contribution. Make sure that you’ve received both of these.

o   Now you need to compare these amounts with the contribution which you’ve made for your PF with previous employer. Ask for Form 3-A from your previous employer. It should have all the information about the contribution made towards the PF.  You need to compare PF amount which you’ve received to the combined contribution which you and employer made toward PF. You need to compare pension amount with the 8.33% contribution which your previous employer made towards pension scheme. This should be clearly mentioned in form 3-A.

o   You will get Form 23 (Annual PF Statement) from the RPFC which you can verify against the claim credited in your account. You would receive to the address which you’ve mentioned in your withdrawal form. In case you need scanned copy then you can use the same forum of grievance.

I believe this article would help lot of people and guide them through PF withdrawal.

Happy Investing and Wealth creation!!

Want to be Millionaire? Invest Today

I've got larger response for my article on Systematic Investment Plan - where people seems to be really curious and interested in creating wealth using SIP.

Many people asked about right time of starting Investment through SIP and ideal amount for such SIP investments. This article may prove to be helpful for all those readers who are aspiring to create good amount of wealth using SIP.

Ideal Amount for SIP:

Ideally the amount could vary based on the risk appetite of individual and the portion of his monthly income he/she wants to invest in SIP. I guess investors should follow 80-20 rule, for such allocation. Let's understand this through an example. My friend Rahul is 23 years old. He's earning 30k per month. He doesn’t have many liabilities from the family and he's having HIGH risk appetite. He can save 15k from his monthly salary and want to invest maximum in the stock market related instruments.

I would advise him to invest 80% of his monthly saving (12k) into equity and equity oriented instruments. The rest 20% (3k) should get invested into less risky investment options like, PPF. Does this rule apply all the time? No. He should keep reviewing his responsibilities and liabilities and risk taking ability every 3 to 6 months and based on that he should modify his investment profile with 80-20, 75-25 or 70-30 investment rule.

Timing the SIP – Start Early:

I strongly believe that investment in SIP should start at the earliest because there’s definite reason behind this and let’s understand this with example.

Let's compare two friends: Mit and Jigar. Mit has started investment at pretty early stage. He started saving Rs750 per year from the time he was 15. After 15 years he has stopped this investment. So his total investment till date is Rs. 11250 over the tenure of 15 years.

On the other hand, Jigar starts investing Rs. 5,000 per year when he is 30 and will continue investing this amount every year till he is 60. So his total investment would be Rs. 300000 over the tenure of 30 years.

If both earn 15% return per annum then, who will create more wealth when they retire at the age of 60?

Answer is Mit. His annual saving of Rs. 750 between the age of 15 to 30 would aggregate to Rs 27.7 lacs when he’ll be 60, whereas Jigar’s Rs. 5000 annual savings between age of 30 to 60 would accumulate to Rs 25 Lacs when he’ll be 60.
Here, it’s essential to understand the power of compounding and it’s the single most reason for you to start investing immediately. Even small chunk of investment makes big difference over the period of time. You can see Mit and Jigar both would create enormous wealth, compared to their investment. But for Mit it took really less money and the time duration to build the wealth as he started at the early investment. This highlights the importance of starting early and right at your investment.
In a nutshell, “Your money never sleeps. It’s working for you 365*24*7, so start early at your investment.”

Happy Investing!!

Systematic Investment Plan - Tax saving, money making and more...

This article is devoted to all the investors who want to take advantage of India growth story but refrain from doing this due to less knowledge about stock market or economy fundamentals.

I recommend them to go with Systematic Investment in ELSS or Equity focused Mutual Funds. Let me explain this in detail and why I’m so bullish on this kind of investment.

Systematic Investment Plan:

                In a simple terminology, it’s about investing specific amount of money at regular intervals for continuous period of time. I hope most of the people know about RD – Recurring Deposit, where we deposit specific amount of money to the bank/post regularly for specific time duration. Here method of investment remains same, but only investment instrument changes. In SIP, investment goes to the equity via MF scheme. Here investor can choose MF scheme based on his own risk appetite.

Benefits:

• SIP gives relief to the investors from the task of timing the stock markets. Believe me, it’s the most difficult task which even Investment Gurus are not able to do very well.
•  It makes investment as habit and not the gambling. SIP allows the investor to buy units on a given date every month/every week. The investor decides the amount and also the mutual fund scheme.
• Investment amount remains same, but investor can definitely buy more units in declining market and less number of units when market is trading at high valuation.
• Investor automatically participates in the market swings, so there’s no need to time the market.
• SIP averages the risk through consistent investment at every level of market. We don’t need to bother, if market is down or up and still we get handsome returns. This is because now we have made investment as habit.
• SIP can start with minimum investment of Rs. 500, so even small investor can participate in this investment instrument.
• Fix amount of money automatically gets deducted through ECS, every month/week. This is best way of investment when you don’t have to control when to invest or not to invest. This would make a habit of keeping some corpus aside for the SIP, every Month.
• SIP in Tax Saver MF Schemes:  I believe this is the best way to invest through SIP. Investor gets many advantages.

1). Tax Saving: Investor gets immediate tax benefit in the respective tax bracket.

2). Investment Lock in – 3 Years:  I believe investment horizon of more than 3 year enhances

3). Tax free income: All this ELSS scheme gives you tax free return.

4). Invest for 3 Year – “Forget your tax worries”: We all know when it comes to Feb, March then we’re always worried about the next pay check, which may be cut heavily due to tax liability. With the help of SIP investor just needs to invest for 3 years consistently and that’s it. At the end of third year, the same SIP amount which was invested at the beginning of SIP could be withdrawn (without any tax liability) and reinvested in the SIP again. This will manage and save your tax using the same SIP year after year once you invest for 3 consecutive years.

5). Minimum lock in Period: Tax Saver MF has the minimum lock in period, compared to other tax saving instruments. This means if you’re in 30% tax bracket, then ideally you’re making/saving 30% on the investment every 3 years. Just compare it to NSC where the lock in period is very high and at the same time you’re liable to pay tax on the gain from NSC.

I hope this article would encourage and help investors in creating wealth over the period of time using SIP.

Happy Investing !!

Stock Market Outlook & Investment Idea - 2011

It's been really long time since I've given recommendation to the investors and readers of this blog.

There have been tones of ups and downs in the markets during last one year, but finally Nifty and Sensex are managing to hold and give good returns to the investors.

I have got many queries asking for the stock recommendation which could prove to be good investment idea at this point of time.

Indian stock market Outlook - 2011

First of all let me reiterate the fact that there’s immense potential in the Indian stock market to do well over the next 3-5 years. I believe Indian economy would be triple in the size over the course of next 10 years. You can imagine the amount of wealth could be created if you invest in right company, right business at right time.

In particular outlook for 2011 looks good to me from the Indian stock market point of view. I expect earnings to grow around 15-18% next year, which would provide further upside to the stock market and justify valuation for the market. I believe sectors which are underperforming over the last 1 year or so would start catching up with rest of the market. It could be infrastructure, metals and oil & gas. I’m not so bullish on Real Estate even after recent crash in many of the stocks. I believe IT stocks should also do well and grow earnings by 18-20%. It’s worth to put money in some of the beaten down midcaps which has high growth potential. Let me recommend some of this which could make money for readers of this blog.

-       UCO BANK – CMP RS. 115: UCO BANK is one of my favorite stocks. I recommended this stock at Rs. 59 in January’2010 - http://indianstockmarketexpert.blogspot.com/2010/01/investment-idea-uco-bank-by-stock.html . It has proven to be good investment for the readers as it has touched high of Rs. 150. It was one of the best performing stock over the last one year. Now stock has retraced a bit due to recent scam news in PSU BANK.  It’s been consolidating for a while and formed a base around current levels. I believe it has potential upside of RS. 140 over next few months. I recommend buy for the stock with target price of RS. 162 and RS. 180 for the medium and long term view respectively.

-        IDBI BANK – CMP RS. 165: This is also one of the very good stock to remain invested for longer period. I recommended this stock at RS. 129 on 29^th Dec – 2009 http://indianstockmarketexpert.blogspot.com/2009/12/stock-recommendation.html. It has touched high of RS. 200 and now again available at reasonable valuation to get into the stock again. I believe this bank has got huge potential to become one of the larger PSU BANKS in India. It has got huge customer base, strong financial performance and investment in lot of companies in the stock market. There’s potential chance of listing of subsidiaries in the company which would again unlock value of this stock. I recommend buy on this stock with potential target of RS. 216 and RS. 234 over the medium and long term view.

Happy Investing!!