Month: April 2021

Government-Backed Investment Options For Regular Monthly Income

Personal Finance

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Post Office MIS

India Post’s Post Office Monthly Income Scheme (POMIS) is a type of investment. This is a fantastic option for risk-averse investors looking for a steady stream of income. At the moment, the POMIS is offering a 7.6% interest rate. A single account can carry investments worth up to Rs 4.5 lakh, while a joint account can hold investments worth up to Rs 9 lakh. Furthermore, with a 5-year investment period, it is a very low-risk investment. You will receive not only your principal but also a 5% bonus when the bond matures. Once the POMIS investments have matured, they can be re-invested for another five years for a total of ten years.

Government Bond

Government Bond

A government bond is a debt instrument issued by the Indian government, including both the central and state governments. When the issuing body faces a liquidity crisis and needs funds for infrastructure development, these bonds are issued. Depending on the bond’s terms, the authorised issuer may be required to pay interest and/or repay the principal at a later date when the bond matures. A bond, in simple terms, is a formal agreement to repay borrowed funds with interest at predetermined intervals. Investment bonds are a less risky investment option, so your money is safe. Bonds that can be used to raise funds are known as investment bonds. Investment bonds provide guaranteed returns, although at a lower rate than equity.If you are in a higher tax bracket, tax-free investment bonds are one of your best options.

Post Office Senior Citizen Savings Scheme (SCSS)

Post Office Senior Citizen Savings Scheme (SCSS)

Senior Citizen Savings Scheme (SCSS) is a post office savings scheme for senior citizens that provides investors with security and a stable income. It’s also a tax-saving approach. It’s ideal for retirees looking for a low-risk investment. Section 80C of the Income Tax Act allows for a tax deduction for investments in SCSS. Interest, on the other hand, is taxed according to the individual’s tax bracket. The Senior Citizens Savings Scheme requires a minimum deposit of Rs 1,000. A maximum of Rs 15,00,000 is also available. As a result, eligible investors can only invest in the specified range. The amount put into the account cannot be more than the amount received upon retirement. The current interest rate is 7.4% for the quarter of April to June (2020-2021). Every quarter, the interest rate is reviewed. It is also subject to change on a regular basis by the Ministry of Finance.

Pradhan Mantri Vaya Vandana Yojana (PMVVY)

Pradhan Mantri Vaya Vandana Yojana (PMVVY)

The Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a Government of India-sponsored pension scheme for senior citizens aged 60 and up, which was available from May 4, 2017, to March 31, 2020. The program has been extended until March 31, 2023, for a total of three years beyond March 31, 2020. The scheme’s goal is to provide seniors with a regular pension. Because Life Insurance Corporation of India has been given exclusive rights to operate the scheme, it can be purchased both offline and online. The scheme offers an initial guaranteed rate of return of 7.40% per year for the years 2020-21, with the rate reset every year after that. If the pensioner lives to the end of the ten-year policy term, the purchase price and final pension instalment will be paid. A lump sum Purchase Price can be paid to purchase the scheme. The pensioner has the option of selecting either the pension amount or the Purchase Price.

Fixed Deposits MIS

Fixed Deposits MIS

Monthly income fixed-deposits are term deposits in which the interest received is credited to the investor’s account each month. Individuals who want a monthly fixed income should consider this form of investment vehicle. These accounts have interest rates that are similar to those for regular term deposits. They also tend to charge senior citizens a higher interest rate, ranging from 0.25%to 0.5% higher than the current rates. IT is backed by the government to a certain amount

Non-Government Backed Monthly Income Scheme- Corporate Deposits

Non-Government Backed Monthly Income Scheme- Corporate Deposits

A corporate fixed deposit (corporate FD) is a term deposit held for a set period of time at a set rate of interest. Financial and non-banking financial institutions offer company fixed deposits (NBFCs). Fixed deposits issued by companies can have maturities ranging from a few months to a few years. Choose higher-rated corporate FDs based on the credit rating, which indicates the company’s underlying risk. Corporate FDs offer more liquidity and have a shorter lock-in period than Bank FDs. They offer higher interest rates when compared to bank fixed deposits Corporate FDs offer more liquidity and have a shorter lock-in period than Bank FDs. The returns on CFDs are dependent on market fluctuations. If your interest income exceeds Rs.5,000, you’ll be subject to Tax Deducted at Source (TDS).

Non-Government Backed Monthly Income Scheme- Monthly Income Plan

Non-Government Backed Monthly Income Scheme- Monthly Income Plan

The Monthly Income Plan is an investment option that primarily invests in lower-risk securities and is typically designed for conservative risk-averse investors and retirees.

It provides a consistent source of income for those looking to supplement their monthly income. Monthly Income Plans primarily to generate income in the form of interest and dividends. MIP earnings are higher than those from traditional fixed deposits and the Post Office Monthly Income Scheme. MIPs have been linked to a lower risk component. Because money is invested in low-risk securities such as preferred shares, fixed-income instruments, and dividend stocks, the risk is reduced.



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5 Best Public & Private Sector Banks Providing Higher Returns On Tax Saving FDs

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Investment

oi-Vipul Das

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The Reserve Bank of India (RBI) decided to keep the repo rate steady at its recent bi-monthly monetary meeting on April 7, 2021. The central bank has kept the key rates unchanged for the sixth time in a row. Fixed deposits are one of the most common investment products in our country, particularly among risk-averse investors such as senior citizens, due to their guaranteed returns, high liquidity, and tax benefits. Following the pandemic outbreak last year, FD interest rates have begun to drop, which has been upsetting investors, and the central bank’s latest declaration that the key policy rate will remain at 4% may not put them at ease. Considering the current low-interest-rate environment, risk-averse investors can benefit from investing in five-year tax-saving fixed deposits (FDs). Despite the fact that bank FD rates have sunk to historically low levels, some banks still deliver competitive 5-year FD rates.

5 Best Public & Private Sector Banks Providing Higher Returns On Tax Saving FDs

5-Year Tax Saving FD Rates

On tax-saving FDs, small private banks bid interest rates as high as 6.75 percent. These tax-saving FD interest rates are higher than those offered by large public sector banks. With 6.75 percent interest, DCB Bank and Yes Bank are at the top of the list, followed by RBL Bank, which offers 6.6 percent interest on five-year tax-saving FDs. Union Bank of India provides the highest interest rate on a 5-year tax-saving FD at 5.55 percent, followed by Canara Bank and State Bank of India (SBI) at 5.50 percent and 5.40 percent, respectively across public sector banks of India. Below are the 5 best private and public sector banks that are currently fetching higher returns on tax-saving FDs.

Private Sector Banks Regular FD Rates In % Senior Citizen FD Rates
Yes Bank 6.75 7.5
DCB Bank 6.75 7.25
RBL Bank 6.6 7.1
IndusInd Bank 6.5 7
City Union Bank 6 6
Public Sector Banks Regular FD Rates In % Senior Citizen FD Rates
Union Bank 5.55 6.05
Canara Bank 5.5 6
State Bank of India 5.4 6.2
Bank of India 5.3 5.8
Punjab National Bank 5.3 5.8
Source: Bank Websites

TDS on tax-saving FDs

The interest earned on a fixed deposit is tax-deductible. Individual investors’ tax on FD interest is deducted according to their tax slab rate category. If the earned interest is more than Rs 40,000 for regular investors and Rs 50,000 for senior citizens, banks and non-banking financial firms deduct TDS (Tax Deducted at Source). TDS is usually deducted at a rate of 10%; but, if the investor does not submit a PAN card, the rate increases to 20%.

Tax benefits and capital security on tax-saving FDs

For investments made in tax-saving fixed deposits, a person can claim a deduction of up to Rs 1,50,000 in a fiscal year under Section 80C of the Income-Tax Act, 1961). To settle at net taxable income, the amount thus invested is withheld from gross taxable income. Premature withdrawals are not permitted on these deposits, which have a 5-year lock-in period. When a bank collapses, the Deposit Insurance and Credit Guarantee Corporation (DICGC) only provide insurance coverage to the depositors. Savings accounts, fixed deposits (FD), current accounts, recurring deposits (RD), and other types of deposits are covered by DICGC’s insurance cover. Each depositor in a bank is covered up to a limit of Rs 5 lakh for both principal and interest amounts maintained by her or him, according to the DICGC rules.



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Gold ETF Saw Record Net Inflows In March; Should You Invest in Gold ETF?

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Planning

oi-Sneha Kulkarni

|

Gold ETFs are represented by physical gold bars with a purity of 99.5%. Gold ETF prices are available on the BSE/NSE website, and they can be bought or sold at any time through a stockbroker. According to the latest AMFI data, investors appear to have turned their attention to Gold ETFs, as monthly flows in Gold ETFs increased by 35% (MoM) in March 2021. In March 2021, net investments in gold ETF schemes totalled Rs 662 crore, up from Rs 491 crore the previous month.

Gold is regarded as an inflation hedge, and experts recommend allocating 10-15% of one’s portfolio to gold.

Gold prices, which had soared to record highs of Rs 56,200 in August 2020, have fallen by about Rs 10,000 – Rs 12,000 since then.

Gold ETF Saw Record Net Inflows In March; Should You Invest in Gold ETF?

Gold ETFs have benefited from the recent drop in gold prices. Gold prices have come under pressure as a result of a stronger-than-expected economic recovery and a hardening of US bond yields, with prices down around 21% from their peak.

From 5.26 lakh in March 2020 to 12.99 lakh in March 2021, the number of new folios added to the Gold ETF category more than doubled to 12.99 lakh. In March 2021, it increased by 16% over the previous month. Gold ETF had Rs 14,122 crore in net assets under management as of March 31, 2021.

Should You Invest in Gold ETF?

Gold exchange-traded funds (ETFs) are passive investment vehicles based on gold prices. They are less expensive than physical gold investments. Furthermore, this purchase will be made in electronic form, removing the hassles of storage and security, as well as the concern about gold purity.

Gold ETFs, according to industry experts, are ideal for investors who want high liquidity from their gold investments. Gold ETFs can be purchased through a Demat account, which also allows investors to invest in them as SIPs.

When it comes to purchasing gold, especially for investment purposes, gold coins and bars are the most popular choices. However, when all factors are considered, gold ETFs emerge as the best gold investment vehicle. Unlike gold jewellery, gold ETFs can be bought and sold at the same price all over India.

GoodReturns.in



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Reserve Bank of India – Press Releases

Press Releases

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Reserve Bank of India, in public interest, had issued Directions under Sub-Section (1) of Section 35A read with section 56 of the Banking Regulation Act, 1949 (AACS) to Kolikata Mahila Co-operative Bank Limited, Kolkata, West Bengal vide Directive DCBS.CO.BSD-III/D-17/12.29.054/2018-19 dated June 27, 2019. Directions imposed were extended and modified from time to time, last being up to April 09, 2021 vide Directive DOR.CO.AID.No.D-50/12.29.054/2020-21 dated January 07, 2021.

Reserve Bank, on being satisfied that in the public interest it is necessary to do so, in exercise of the powers vested in it under sub-section (2) of section 35A read with section 56 of the Banking Regulation Act, 1949 (AACS), hereby withdraws with effect from April 10, 2021, the said Directions so issued to Kolikata Mahila Co-operative Bank Limited, Kolkata, West Bengal.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2021-2022/38

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The future of Neobanks in India, BFSI News, ET BFSI

Banking & Finance

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The Indian Financial landscape being vastly different from the developed economies, has resulted in a modest pace of newer technologies absorption. The hurdles were multi-fold i.e. sheer size & scale of market, unique risk and compliance, distinctive consumer behaviour and regulatory challenges, to name a few. Pandemic disruptions came with a silver lining – fast tracking the way forward for tech absorption and digital banking. Covid-19 served as a veritable catalyst, and customers as well as banks began to rapidly embrace digitization, there was no option. Consequently, digital transactions in India surged 30% last year.

According to a KPMG report, Fintech investments in India were $3.5 billion in 2019. Despite the recent ravages, we attracted a whopping $2.7 billion in 2020. More so, RBI governor has already referred to the ready emergence of digital banks in India.

Since there is an unrelenting tailwind for a ‘digital future’ of the banking ecosystem, it is appropriate to peek into the world of Neo Banks.

What are Neobanks?

Neobanks are new age digital banking entities that operate 100% digitally without the traditional brick and mortar branch network. Currently in the nascent stages, Neobanks are growing consistently and have already started to carve a definitive path of their own. The RBI Governor says, a segment of banking entities in future would comprise digital players acting as service providers directly to customers or through banks as their agents or associates.

Neobanks are not licensed RBI banks but they rely on their bank partners for offering bank licensed services. In India, Neobanks will broadly work in two distinct categories: One, working directly as service providers. Example – RazorpayX, Instant Pay & Open. Two, working as online entities of already established banks, for instance SBI YONO & KOTAK’s 811.

Unlike traditional banks which offer a full range of financial products, and leverage their branch network to engage with and to build the trust of customers, Neobanks use new age technologies such as Cloud, Data Analytics to target select customer segments. The focus is on cost reduction and on crunching timelines of customer acquisition: offering seamless and paperless operations, customised products & services, solving for the challenges associated with traditional banking, thus ensuring a unique customer experience. They are more agile and target niche segments such as millennials, SMEs, low salaried, which may not be the main focus of traditional banks.

What do Neobanks offer

Employing new age digital technology i.e. Cloud based storage, Artificial intelligence, Machine Learning and open APIs, Banks, NBFCs & Fintech players are able to offer:

Banking as a Service (BAAS)
Data driven approach for decisioning
Customised products
Bespoke customer experience
Open APIs
Cyber Security as well as protection against Cyber Crime
Swifter turnaround

Banking as a Service (BaaS):

BaaS is an end-to-end encryption model that allows digital banks and third parties to connect via open Application Programming Interfaces (APIs) with banking systems and offer secure open banking solutions for customers. API is an intermediary (software) that allows communication between two applications.

With the help of these APIs, banking services of mainline banks can be used by diverse stakeholders such as Fintech companies, web developers and even non financial businesses. These third parties put up a layer on the top of existing banking services and offer innovative solutions. In other words:

  • Fintech company (neobank) pays to mainline banks to use BaaS
  • Bank which is a BaaS platform opens up its APIs to this third party
  • Fintech company integrates APIs and offer innovative financial services

Thus, a Neobank can bring on board unlimited on-the-click innovations and offers for quicker & smarter decisioning.

Holistic Customer Experience: New age digital banks employ AI and ML to provide more personalized recommendations, offers and products, thereby ensuring a pleasurable & unique customer experience. The decisioning is data-driven. The platform creates cohorts of customers based on their behaviour on the platform and offer unique solutions. They do not rely on one or two data points only.

Practical insights: Customers can access online dashboards to get insights on account & services. For example, your bank’s app could offer a Spend Analyser, a customised app that shares Saving & Investment tips basis your monthly inflows & outflows from the account. The recommendations are customised and personalised uniquely for your profile.

24X7, mobile experience: The services can be accessed round the clock as per customer preferences.

BaaS can strengthen the core of legacy banks

In the normal course of business, large Indian banks (like any gigantic organisation) are too large to bring about a swift change in their operations and procedures. Besides the years of experience in customer segmentation and nurturing long-term relationships with clients, traditional banks own huge data of merchants as well as end-customers. By offering open APIs and BaaS banks can partner with several stakeholders (Fintech as well as non financial partners) and drastically expand their basket of products & services beyond banking & lending and that too, across locations. Besides deposit accounts and lending products, neobanking will also be powered to offer innovative services for payroll management, payment gateway, invoicing, taxation, budgeting, cash management & much more.

Support to Financial Inclusion in India

It may not be profitable for a bank to set up brick & mortar branches in remote villages. However neobanking can offer a complete range of services in far-flung locations. As neobanks employ open APIs and Baas, they have 100% digital solutions. They can offer customised and affordable Saving, Investing and Credit solutions to the unbanked customers in the smallest of villages. A huge boost for financial inclusion.

Flash in the pan or next big thing?

Globally, neobanking is fast disrupting the Fintech landscape, and is expected to raise an estimated $400 bn by 2026. India too is getting its fair share of investments in this sector.

Also, India has currently the highest Fintech adoption rate and annual return on investment in the Fintech start-ups. In the long run, however, the success will largely depend on the level of customer awareness, cyber security, protection from cyber crime, API integration and customer ease & seamless experience.

Looking ahead, a hybrid approach involving both digital and traditional banking is the sweet spot for India, and that indeed is in the best interests of consumer services and financial inclusion.

The blog has been authored by Raj Khaosla, Founder and MD, MyMoneyMantra.com

DISCLAIMER: The views expressed are solely of the author and ETBFSI.com does not necessarily subscribe to it. ETBFSI.com shall not be responsible for any damage caused to any person/organisation directly or indirectly.



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What are biometric payments?, BFSI News, ET BFSI

Banking & Finance

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The most popular biometric payment form is fingerprint payment, which is based on finger scanning. The device commonly employs two-factor authentication, in which a finger scan replaces a card swipe, and the user enters a PIN (personal identification number). It works on Biometric authentication which is a security measure which uses biometric features of a user to verify the identity of a person trying to access an authorized device.

Types of Biometric authentication-
Fingerprint
Facial recognition
Voice identification
Eye scanners

How does a biometric payment card works:

The fingerprint is enrolled by the cardholder and safely stored on the card. During a transaction, he or she places his or her finger on the card’s sensor, which detects if the scanned print matches the print stored in the card. A successful or unsuccessful match is marked by a green or red light on the card. PIN code can be used as a fallback solution whenever the cardholder’s fingerprint cannot be used – like ATM cash withdrawals, for example.

How safe are the biometric payments:
Due to the uniqueness of individual’s biometric features, using biometric payment methods provides better safety and security to both consumers and banks. The card compares the user’s finger on the scanner to the reference data safely stored within the card, before authorizing a payment. If the card is lost or stolen, it cannot be used even for low value contactless payments. However, there are some concerns that the fingerprints could be made available to law and enforcement agencies or government agencies. There is a risk that customer privacy and confidential information can be compromised as it is easy to set a new password but impossible to give someone a new look. In response to this, Biometric payment service providers point out that they do not keep the customer’s actual fingerprint in their databases — they keep an encrypted number derived from the finger’s point-to-point measurements.

Benefits of Biometric Payment System:

Convenience
No PIN number require
No limit on contactless spend
More secure
Preferred by customers
Compatibility

Future of Payments

As we look into the future, biometric technology is improving and developing constantly in terms of speed and accuracy, authenticating using a biometric identifier is quicker and easier than entering a pin or password. This benefit both the consumer as well as businesses, with the path to conversion made much more straightforward by the adoption of biometric payment authentication.

Who are offering Biometric Payments

Banks like BNP Paribas, The Royal Bank of Scotland and NatWestare offering Biometric payments card to their users. Chase, Bank of America, Citi, and Wells Fargo have introduced various biometric ID options, including voice, fingerprint, eye, or facial recognition.

In India, it is currently used with AePS settlement systems only based on Aadhar identification.



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3 Stocks That May Do Well From Consumer Goods And Retail Space

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Investment

oi-Sunil Fernandes

|

Low comparables due to the Covid-19-related lockdown in Mar’ 20 are likely to drive higher revenue growth of 20-40% across companies in Emkay Global Financial Services coverage universe the brokerage has said.

According to the brokerage firm, recovery and growth in discretionary should remain impressive.

“While staples may record similar sequential trends, alcobev is expected to come back to growth. Fashion retailers are yet to see a full recovery. We expect companies under our coverage to record sales/EBITDA growth of 24%/32% in Q4 vs. 9.6%/9.9% in Q3. In terms of a 2-year CAGR, TTAN, APNT, BRGR, PIDI, VBL and PAG are likely to record high growth of 12-23%. We remain positive on recovery plays and expect the Maharashtra lockdown to be a short-term blip. TTAN, Alcobev stocks (UBBL, UNSP and RDCK), QSRs (JUBI and WLDL), ABFRL and VBL are preferred picks, given likely upgrades to earnings,” the brokerage firm has stated.

3 Stocks That May Do Well From Consumer Goods And Retail Space

Within staples Emkay Global likes Britannia, Colgate and ITC. On Britannia, the brokerage believes that growth trends in biscuits may remain muted, with the company likely to record sales growth of 9% (2-year CAGR of 5.8%).

All the three stocks, particularly Britannia Industries has seen considerable traction over the last few months.



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Can’t reveal info of customers, recall RTI order, banks tell SC, BFSI News, ET BFSI

Banking & Finance

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NEW DELHI: Nearly six years after the Supreme Court ruled that RBI had to reveal information about functioning of banks under the RTI Act, major banks, including SBI and HDFC, on Friday urged the court to recall its order as they cannot reveal confidential information of account holders who may sue them for putting such details in public domain.

The SC had in 2015 directed that RBI can’t refuse to reveal information under the transparency law on financial health of banks under the pretext of ‘fiduciary relations’ with financial institutions and had held that the regulator was supposed to “uphold public interest and not the interest of banks”. Another round of litigation was initiated after RBI didn’t comply with the SC order and the court issued contempt notice. The proceedings were wound up in 2019 with RBI being given the last opportunity to comply to disclose its Annual Financial Inspection report of banks.

With RBI asking the banks to provide information to be disclosed under the RTI Act, third round of litigations has started with all major banks filing fresh applications and petitions seeking quashing or recall of earlier direction. Banks such as SBI, PNB, HDFC, Bank of India, Bank of Baroda made a pitch for re-examining the issue. Solicitor General Tushar Mehta with advocates Harish Salve and Mukul Rohatgi contended before a bench of Justices L Nageswara Rao and Vineet Saran the banking industry could be affected and the SC order might be misused for corporate rivalry. They said only RBI was heard by the SC and the banks were not parties in the litigation.



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Fractional Ownership Providing Boost To Commercial Real Estate

Personal Finance

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Personal Finance

oi-Sunil Fernandes

|

If this pandemic has accomplished something, it has forced us to reconsider how we make financial decisions, especially how we save and invest. As if wage cuts and layoffs weren’t bad enough, many people lost their stock market savings in 2020, and some had to split their fixed deposits or sell property to get their money. The question is how to make a pandemic-proof and reliable investment that offers daily and liquid returns that go straight to our pockets, as well as long-term capital appreciation. In the past year, one form of investment stood out on all three counts: fractional ownership of commercial real estate. Fractional real estate is a unicorn investment because it offers a rare combination of high returns and low risk. It makes the attractive returns of commercial real estate available to the average citizen.

“Investment in Commercial Real Estate is gaining traction because of increased volatility in stock market and reduced returns in bonds and fixed deposits. Fractional ownership in commercial properties have given an opportunity to retail investors to invest smaller sums in India’s booming commercial real estate market thereby helping them open an alternate source of income flow. The future of fractional investment looks bright and sustainable and therefore retail investors have jumped on this bandwagon to ride the wave of safe and healthy returns and also as a means to diversify their investment portfolio,” says Mohit Goel, CEO, Omaxe Ltd.

Fractional Ownership Providing Boost To Commercial Real Estate

Although the market in India is still in its infancy, it is estimated to be worth $5 billion and increasing. Fractional ownership is predicted to be the real estate market’s future because it addresses one of the most significant issues with commercial property: the high entry barrier or necessary capital investment. “Consider a luxury office space worth Rs 90 crore. Normally, such a large investment will only be accessible to those with a high net worth (HNI). However, with fractional ownership, an individual can now invest as little as Rs 10 lakh to become a part-owner and earn rental returns. TDI is coming with a concept of part ownership for its commercial properties in third quarter of 2021, where buyers will be able to hold a property for a long period of time which is leased to world renowned brand for long term durations” says Akshay Taneja of TDI Infratech.

Unlike the rest of the financial market, commercial real estate only endured a modest recession in the early months of last year’s lockdown and rapidly recovered in Q3. As compared to the previous quarter, net absorption of CRE has increased by 63 per cent, while new completions have increased by 59 per cent. “Though real estate in other countries suffered due to Covid-19 outbreak, office leasing in India grew during the same time due to the country’s strong outsourcing industry. This should serve as a good reminder to Indian investors, both residents and non-residents, that it’s time for them to get a piece of the real estate pie, too. In reality, now is the best time to invest, as CRE prices are expected to skyrocket in the future,” says Achal Raina, COO, Raheja Developers.

Tenants of residential properties tend to vacate the property regularly, resulting in a loss of rental income before a new occupant can be found. The rental lease on commercial property is usually three years long, although it can be longer in some cases. The tenants of Grade A properties are usually multinational corporations, banks, or information technology firms with deep pockets; such tenants do not default on rent but pay on time. They often like to decorate the space themselves, according to their tastes. Furthermore, because of the time, resources, and effort they put into converting the property into their offices, such tenants are more likely to extend their rental lease. For better returns, it’s best to invest in a property that has already been rented.

The rental returns will be credited to your bank account every month. Unlike bank deposits or bonds, where you must wait for the investment to mature and the lock-in period to end before you can access your earnings, you can access your earnings immediately. “Fractional ownership guarantees a rising rate of return — rental yield and capital appreciation. In India, commercial property has grown at a 16 per cent compound annual growth rate (CAGR) over the last five years. Apart from the increase in capital appreciation, you can also expect a rise in rental returns if you invest in a reputable real estate firm. This increase is built into the rental agreement to protect your investment from potential inflation and keep it steady over time,” says Sagar Saxena, Project Head, Spectrum Metro. Investors must perform due diligence on the property in terms of venue, rental yield, capital appreciation potential, and the types of tenants it would attract.



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