Author: avdesh

Heard of P2P lending? Your gateway to earn 2X FD, PPF returns

You have a lumpsum amount to invest for the short-term, but you are not really sure which instrument to choose. The returns on FDs are too low. PPF is giving slightly higher returns but the lock-in period dissuades you. Need not worry!

There is an investment product that may fetch you double the FD and PPF returns in the short-term. This is P2P lending. All you have to do is sign up on a P2P lending platform which will connect you with a spate of borrowers. You may lend your money to a set of borrowers and earn interest on the same.

This article will cover the returns aspect of P2P pending. Read the following article to get a detailed understanding of what P2P lending is:

Attention millenials! Learn all about peer-to-peer lending

When you register with a P2P lending platform, you will find lakhs of individual or MSME borrowers. Some will have higher credit score while others on the lower side. High-credit-score borrowers get loan at a lower interest rate compared to those with lower credit score. The interest rate may range between 12-36 per cent on an average.

You may lend all your money to a single high-credit-score borrower or among a set of such borrowers. You may mix and match different categories of borrowers. Divide the lending amount among various risk profiles. This will give you better returns.

P2P lending platforms give you two options to build your lending portfolio. Either you can select the borrowers on your own or you allow the system to generate a customised portfolio for you. While the platform does provide you detailed profiles of borrowers, analysing them all could be cumbersome. So far as system is concerned, it allows you to put up return expectations and accordingly build a diversified portfolio for you.

For example, if you wish to earn 13-14 per cent, it will pick up moderate risk profiles. However, if return expectations are more than 20 per cent, the borrowers’ profile will turn riskier. One may choose the return expectations as per one’s risk appetite.

Difference between RoI and net returns

You do not earn the full interest rate on which the borrower is lent the money. The P2P platforms charge nearly 2 per cent commission on the same. RoI is overall return that your investment generates, while net returns are calculated after subtracting the platform charges. You may need to check with respective platforms if the portfolio return visible in your account is RoI or net return. What you should focus on is net returns – not RoI.


Wondering what if the borrowers do not return money? Default risk indeed exists. This is why a well-diversified portfolio among various risk profiles is advisable. If you have Rs 1 lakh to lend, instead of lending 20,000 to five borrowers, you should lend Rs 2000 to 50 borrowers. Even if 4-5 borrowers do not return your money, you may still earn nearly 9-10 per cent net returns. The more money you will have, the wider could be your diversification. The crux lies in customising your portfolio. This is where our role comes. On no extra charge, we help you with creating a diversified portfolio. Give us a call to know more about the product @ 8178271045

Attention millenials! Learn all about peer-to-peer lending.

Hunting for newer investment avenues?

Any luck beyond equities, debt and low-yield small savings schemes?

Bitcoins, you say! But don’t you fear volatility? Can you digest 20-30 per cent freefall just every other day?

Most of you cannot. Let us introduce you to a product that has become a rage among millenials!

Peer-to-peer lending, or P2P lending, is a short-term investment avenue that may give you double digit returns in a year or two. Unlike Bitcoins (another popular millennial investment), P2P lending is regulated by the Reserve Bank of India (RBI). The central bank gives licences to P2P platforms that facilitate P2P lending.

Let’s get going.

What is P2P lending?

There are salaried professionals who may need extra cash for emergencies, a gadget purchase or just to survive the last few days of the month before the next month’s salary gets credited. There are small businesses which may need some working capital to get their cashflow intact. Their borrowing needs will  not be so much that they approach a bank. Why don’t you be the bank? You can be a lender to borrowers.

Here comes the role of P2P platforms. Such platforms connect the borrowers with lenders. Borrowers easily get the required funding and lenders get to earn decent returns on their lending amount. These platforms are licensed by the RBI, and are called NBFC-P2P.

When did it start in India?

P2P players have been in existence since 2012, when the first platform – i-Lend – was launched. Initially, there was hardly any regulatory oversight. Seeing the potential of the evolving technology and growth of lending to the underserved, the RBI came out with guidelines in September 2017, to convert P2P players into NBFCs by issuing NBFC-P2P licences. It issued fresh guidelines in 2019.

There are around 30 P2P players in the country of which 21 have got the NBFC-P2P licences as of January 2021.

What are the regulations?

Going by the RBI guidelines, one can invest up to Rs 50 lakh across P2P platforms. The minimum amount is Rs 25,000. The central bank has specified that the tenure of a single loan cannot be more than three years and exposure to a single borrower cannot go above Rs 50,000. Besides, different P2P players may fix their lending limits and loan tenures within the RBI prescribed limits.

How to start investment?

You may sign up on one of the P2P platforms and start your journey. Or, you can connect with us. On no extra charge we will take care of your investments and queries. Call us on 8178271045.

Why choose us?

P2P lending is a road less travelled by! Not many people understand the risks involved. With any lending comes the default risk. But if you diversify well across borrowers and platforms, you may control your default risk to a great extent. We help you do that. Not only do we take care of the operational aspect of it, but also the expertise side of it. We emphasise again – no servicing charge! Better to come with us than walk alone.

Why April, not March, is the right month to plan your taxes.!!

Do you wait until March to take stock of taxes? You are making the commonest but gravest financial mistake.

New Year we celebrate with full gusto, but it is the beginning of the financial year that deserves celebrations. The new financial year brings with it hope and motivation for better financial discipline as we move ahead in our investment journey. Do you know the beginning of the financial year, not February or March, is the most appropriate time to get your finances and taxes in order? We see people scrambling for tax-saving certificates at the end of the financial year, but the beginning of the financial year is when you should give full attention to it and plan all of it to avoid last-minute hassles and earn more profits. We tell you why April plays a big role in your tax planning:

1) Earn more profits

Putting lumpsum money in ELSS or PPF in February or March will hardly earn any interest or returns compared to doing the same in April. The longer you stay invested, the better returns you tend to earn in ELSS. So far as PPF is concerned, if you invest the amount before 5th of any month, you earn interest for that month also. For example, if you put money in PPF before April 5, you will earn interest for the month of April. However, if you invest in it after April 5, you’ll lose out on interest for April. This money will earn interest from May onwards.

When you do have to make these 80-C-linked tax investments eventually, why not do it in the beginning itself!

2) Stagger your investments 

Often we find ourselves unable to collect a lumpsum amount for investments. This is when SIPs come to our rescue. If you plan your taxes right in the beginning and accordingly start your investments, you can stagger it on a monthly basis. You don’t have to put a lumpsum amount in ELSS or PPF. Invest a smaller amount periodically the whole year. You will get tax deduction on the cumulative amount when you file your income tax return (ITR).

3) Enough time to research about products

The goal of any investments is to serve your life objective. Taxes are secondary. When you do it in February, a tax-saving approach takes precedence over the core of investments, that is, serving a life goal. Choose an investment product after knowing all about it in detail. For example, if you buy a life or a health insurance product, usually you pay the yearly premium in one go. However, you do have an option to make monthly, quarterly or half-yearly premium payments. The aggregate amount does inch up compared to the one-time payment, but it gets affordable.

(Contact us at 8178271045 if you are willing to buy a life or a health insurance)

4) Avoid last-minute hassle

End of financial years is always taxing. You do get a lot of work to take care of. During the same time, your employer hounds you for tax documents. If you keep your taxes and investments in order from the beginning of the financial year itself, you wouldn’t face unnecessary burden at the year-end.

5) Smart investing

April is when you should sit with your financial planner to take a look at your life goals and what all means you have to reach end goals. For example, if retirement corpus is key to you, investing in National Pension Systems (NPS) makes better sense than taking the ELSS route so far as 80-C tax-linked investments are concerned. If you want to optimise your employee provident fund, then there are ways to do that too. All you need is a fee-based financial planner who can help you figure out your investments and offer you personalised advice that suits your financial condition and life goals.

(Contact us at 8178271045 to create your own financial plan)

You don’t want your money lying in a savings account or the worst, channelising it in inefficient investment avenues. Make your money work for you – and that too throughout the year for better return on investments. Optimise your investments as per your life goals. Tax-savings is a corollary. Be responsible for your money. Take action NOW. We at Caterpillar will join you and assist you to your financial freedom.

Mid-life financial crisis!!

Mid-life financial crisis and how to avert it

We all remember how Indian won the World Cup in 2011. Everybody took care of their roles in the matches and finally, India lifted the cup after 28 years. But we hated it when legends like Tendulkar and Sehwag got out early. It seemed India would lose the match if the middle order did not perform and than came Dhoni and he finished it off in style however if Dhoni didn’t perform then the result could have been different.

Just like the failure of middle-order can change the result of the match, a financial crunch in your 40s, i,e. your mid-life, can ruin a lot of things. Despite having a great run your early career, in your 40s, that decide how you will spend the most of your life ahead. Just like the collapse of middle-order exposes the tail-ender to the merciless bowling of the opposition, a wrong financial move can put your entire life in a precarious situation.

To deal with all this, there is something you can do. Long-term income plan from insurers is a product that can help you secure your mid-life and plan for the future.

In a nutshell, this is what it is: You pay a certain amount per annum for 12 years. In the thirteenth year, there is no payment and no payout. From the fourteenth year, you get a certain amount every year for the next 25 years. Setting it straighter, if you pay Rs 2 lakh as a premium per annum for 12 years, then from the 14th year you will get Rs 2.53 lakh as a payout for the next 25 years. Check out the graphic below:

Now, let’s answer all the whats and the whys in your mind.

Guarantee: A guaranteed, fixed payout for 25 years is not something you want to ditch. 25 years is a quarter of a century and a very big span of your life. Rs 2.53 lakh per annum will be a good sum of money to have regardless of the inflation. A guarantee is something we all crave for. No offence intended, but even great cricketers could not provide the guarantee of performance in each match. This plan does that for you.

Lock interest rate: Many of you may have invested in mutual funds. Let’s compare it with mutual funds. Since markets are volatile, you cannot predict your income out of it. What if the stock market is in a bear phase or faces a sudden crash just when you need money? A guaranteed income plan irrespective of how the economy and the stock market behave keeps you stress free.

Leisure: When you already have your 40-50s financially secured, you will have more time with the family. You will not have to bother about retirement, your children’s higher education or marriages all at once. This plan gives you an income that will keep things running and more importantly give you the freedom of really being there for your loved ones.

Taking a risk: There comes a time when people get bored of their work and wish to venture into something else. If you too feel the same at some point in your life, this plan will come to your aid in two ways. You can either infuse the payout amount into your new venture and give it a boost or you can simply use it as guaranteed money to run things the way they were. The money will help you do what you want without losing your night’s sleep over some financial crunch.

Unprecedented times: Life throws up challenges you never see coming. Someone can fall severely ill, your house may need immediate repairing, your kids’ education may require a huge amount of money, a wedding can end up costing way more than what you expect, and so on. This payout will give you the financial cushion to rest on. No matter what life hits you with, this money will absorb the blow.

Retirement: You may have your investments running for your retirement goal. This guaranteed plan will give it a boost. By the time you are done and dusted with your professional life, you will have this payout ready to pay its dividends. When you hit the age when you would want to relax, you will have enough money each year to really feel relaxed.

Vacation: Well, who doesn’t like an exotic vacation? If your key financial goals are already secured, you may want to use this guaranteed income to travel the world and explore different cultures.

Again, in a nutshell, be it education, a risk in career, setback, or retirement, this plan will not fail you, if you don’t fail to take it. We at Caterpillar want you to have a stress-free mid-life and retirement if your plans are that. Financial doubts and hiccups can take down the strongest of us. This plan and our service to you will not let that happen. All you need to do is come to us with an idea of your future.

Is your insurance cover enough ?

Don’t dodge it any further. Take the action now.

Price hike alert: Buy term plan NOW or pay extra from April

If you have plans to buy a term policy, you better do it NOW. A lot of insurers are set to hike the term premium from April. The hike could anywhere be in the range of 10-20 per cent.
Why pay extra? Be a proactive customer and secure your family now. It will help you claim tax deduction too under section 80-C of the Income Tax for the financial year 2020-21.

A few companies had already hiked the prices last year. Many other insurers are set to do it no sooner than April 2021. Why the hike, you wonder? It’s a business call! The way you take insurance from insurance companies, they also secure themselves by taking insurance from reinsurance companies such as GIC. Reinsurers are the ones which have hiked the premium for insurers, which in turn, will be passed on to you.

A term insurance plan is a must for the earning member of the family. It is the cheapest insurance policy that gives a large sum assured to your family if an unfortunate event happens.
Call Us +91 81782 71045

Build your own shield for any emergency !!

Liquid funds: Your financial shield when emergency strikes

There are two kinds of people in the world – one, who have faced an emergency and others who haven’t. If you are among the former, you would have surely built a contingency fund by now. However, the latter may not have seriously thought about it. The COVID-19 pandemic came as a rude shock to those who lost their jobs or faced pay cuts. A contingency fund in such a scenario comes to the rescue. If for some reason you have not yet given a thought to contingency funding, you need to pull up your socks.

The first check post on your way to financial freedom is having enough corpus, to which you can turn to in emergencies. We at Caterpillar suggest setting aside at least six to nine months of your income that you can fall back on, in case of health, loss of income, or other emergencies. The higher your salary and monthly expenses, the more emergency corpus you will need. So, anyone earning more than Rs 25 lakh has to have a nine-month emergency safety net. The people earning below that may set aside up to four-six months of monthly income.

You cannot rely on your equity investment or PPF or EPF money for emergencies. Emergency funds must be liquid enough that you can access them in a couple of hours. Most importantly, it should be parked somewhere safe that you can be assured of its safety. We suggest our clients keep at least two-three months of emergency funding in cash in bank accounts or fixed deposits. Let’s face it, when an emergency strikes, nothing but cash at home or the nearest ATM will be the most accessible. Redeeming other investments will take time. However, it doesn’t mean that all your emergency funds lay idle in your bank account.

As suggested above, keep at least two-three months of your emergency funding in the savings bank account or fixed deposits. The rest can be parked in safer investment avenues, preferably liquid funds. These funds invest in money market instruments of typically less than 90 days of maturity. Unlike other mutual funds, liquid funds do not have an exit load. So, your money keeps earning some return while you have the liberty to exit any time you want without penalty. The money gets credited to your bank account in a couple of days or in a day’s time depending on the asset management firm you have chosen.

Why invest in liquid funds

— To earn slightly higher returns than FDs on a portion of your emergency funds
— To be disciplined about your contingency money — Human psychology is such that you tend to spend extra cash in your bank account for other purposes. The moment you set it aside in a different fund, your mind will have a natural wall against spending it on anything but an emergency.

Tax on capital gains in liquid funds

The returns on FDs are taxed as per your slab rate. However, if you stay invested in liquid funds for more than three years, the capital gains will be taxed at 20 per cent with indexation. So, people in the 30 per cent slab rate can reduce their tax outgo significantly by investing in liquid funds.

If you hold it for less than three years, the taxation is similar to that of FDs, that is, as per your slab rate.

Setting aside substantial corpus sounds daunting to you? Don’t panic. You may build your contingency fund over a period of time. Taking that first step towards financial freedom is all that you need. Call us on 8178271045 to know more about liquid funds. We will help you compute your emergency corpus requirement.

Start Your Career as a Financial Advisor !!

Financial Advisors are the need of the hour!

Picture this: You are strolling in a busy cloth market of your city. You can see people being choosy about what they want to buy, rejecting so many of them. And then you hear someone saying, “Bhaiyya yeh kitna chalega? Iska rang toh nahi jaega?” The implication being, they want a guarantee that the clothing article they are about to buy will last.

Likewise, people need to care about their own lives. And they need to have a guarantee against any mishappening. That is insurance. Simply put, people should have life and health insurance no matter what they do for a living. But buying an insurance policy and getting a verbal guarantee from a cloth vendor isn’t the same thing. Life can take an unexpected turn at any moment. Health is something we can’t predict and so is the longevity of life. Either way, assurance for both life and health counts. Therefore, in matters of life and death, people need a guarantee that whatever product they are buying will hold true in the future.

But who convinces them? Who understands their needs and situation and keeps their interest in mind? It is you, the financial advisors.

You as a financial advisor can understand the needs of the people and deliver them the best life or health insurance policy available in the market. A financial advisor is as important a professional as anyone. People can read as much as they want about an insurance policy on the internet or in brochures but only an agent can tell them the nuances of it.

People are now more concerned about their lives and well-being. But lack of knowledge and correct information leads them to buy the wrong insurance policies. There is a lot of information available. And that confuses the people to a great extent. You as an advisor can take over the part of informing and help them make a good decision.

Not just life insurance, the advent of coronavirus has made people more conscious about their health and having health insurance. Then again, there is such nitty-gritty to health insurance policies that only an advisor like you can suggest the best one to the people. More importantly, telling people that health and life insurance are vital and can’t be bought interchangeably is very important. Just like a goldsmith who can tell the difference between copper and pure gold, only an advisor like you can pick the best health and life insurance policy from the bulk.

Being an independent financial advisor liberates you from the stress of a 9-hour job. You are your own boss. You set your targets, you fix your schedule, you work as hard as you want, and you take the reward and the blessings of the people you serve well. financial advisors are entrepreneurs who help people secure their future.

As for you, having a career in insurance is both a short- and long-term decision. In the short-term, you get your fees and make a living out of it. You also build your network and generate more business. In a couple of years, you will have enough customers and good word of mouth to run your business comfortably. If you are good at what you do, then people will spread your word for you. In the long-term, the renewals will keep filling your coffers, while the new customers will generate more revenue. The more contacts you have, the more money you will make.

We at Caterpillar will train you to be better financial advisors. We will arm you with all the knowledge and information you will need to deal with your clients and guide you through every step. Our goal is to make you a self-reliant professional who has no boss and deadlines to worry about. The hope is to make our society well insured. The way to do it is you. And Caterpillar stands with you to make this happen.

Why Corporate Insurance Is Not Enough.!!

What nobody tells you about corporate health insurance

Do you have a health insurance policy? “No, I don’t need it; my office has given me one.” If this is what your response is then beware — especially if you have no idea about what all your office insurance covers. Corporate insurance cannot be a solution to your health insurance needs. You must have an individual health insurance policy or a family floater policy covering all your members. There are multiple reasons why. We explain you some:

What if you lose your job?

The corporate world could be mean. A lot of people – who lost their jobs during COVID-19 pandemic — learned it hard way. Losing a job, and that too during a health crisis. Had you gotten hospitalised when out of the job, you would have borne all health expenses on your own. So, remember that the day your employment with your employer terminates, you will be out of insurance. This holds true even when you resign from the job. You will be uninsured for the period between joining a new place and the last day in the old office.

Post-retirement coverage

You have been loyal to your employer. You worked there till you retired. Now what? Your employer will not give you lifetime health insurance coverage. Only an individual or a family floater policy may insure you for the lifetime. If you think you will buy a health policy when you turn 60, think again! At the age 60, it is not a matter of choice but availability. Health insurance companies are not bound to accept your policy proposal. If their underwriting process finds you ineligible for the coverage, they will decline your request. Moreover, the policy premium will be quite steep even if they do accept the proposal and will have waiting period for pre-existing disease. If you buy a health policy when you are already young, you may continue it at a cheaper premium for the lifetime while waiting period for pre-existing diseases will have gotten over.

Insurance coverage not enough

The corporate does not give you a choice to hike your insurance cover. It comes with a standard cover, typically Rs 2-5 lakh per employee, which you have to accept. What if you incur more than what your employer provides? It will come to pinch your pockets. How much health insurance do you need? It depends on in which city you reside. You need to figure out the average medical cost in key hospitals nearby.

You lose out on No-Claim Bonus

Do we have to tell you that medical inflation is much more than the average inflation in the economy? The insurance cover that you choose today may not be sufficient after 10 years. Your employer is not going to hike the health cover. An individual health policy, however, comes with a no-claim bonus clause. At no extra cost, if you have not made any claim in a year, your policy cover will increase. This is called no-claim bonus. For example, if you have bought a policy with Rs 5 lakh cover and you don’t make any claims in initial years, your policy cover may rise up to 100-200 per cent going by the health insurer and the policy you have chosen.

One size fits all

As explained above, the corporate insurance is a standard cover. You cannot customise it. Such covers often have many limitations. For example, there could be a limit on room rent. So, if you have taken a private room of say Rs 8000 per day, the corporate insurance may only cover Rs 3000-5000 per day. Similarly, there could be a co-payment clause that says some percentage of the medical bill the insured has to bear herself before the medical policy comes into picture. This could be 20-30 per cent of the medical bill. Moreover, your employer may or may not cover your family members in the health policy.

Corporate insurance a perquisite, not a right

Your employer is not bound to give you a health cover. It can anytime change office policies and withdraw the health cover. In case your company stops paying the premium, you will be out of cover, although your employer will not face any legal ramifications.

Corporate insurance is an attractive prerequisite. It has its benefits. You don’t have to go for medical tests and all diseases are covered from the day one. But, it can still not be your primary cover. Every individual needs to have a comprehensive health insurance policy while corporate insurance may act as a cushion to your health insurance needs. 

 Tax advantage

While tax should not be the primary reason for you to buy a health insurance policy, it indeed is a great secondary benefit. On corporate health insurance since your employer is paying the premium on your behalf, you are not eligible to claim tax deduction against the same. Even if it charges some extra amount for you to enhance your health cover or include your parents and children in the same, you still can’t claim tax deductions. That said, why not take a regular health policy! You can claim a deduction up to Rs 25,000 for the insurance of self, spouse, and dependent children under section 80-D of the Income-Tax Act. An additional deduction of Rs 25,000 is available for the insurance of parents if they are less than 60 years of age, and Rs 50,000 if they are aged above 60.