IDFC Bonds

The IDFC Infrastructure Bond is open from November 21, 2011 and closes December 16, 2011.  The IDFC Bonds are long term infrastructure bonds with a tenure of 10 years but with the option of buyback after 5 years.  You can earn up to 9% p.a. with these bonds as well as save tax on the invested amount as well.  There are 2 options available for investments under this IDFC infra bond option, namely Series 1 and Series 2.  The interest payment for series 1 is annual while for the Series 2 option is cumulative.  PAN is mandatory to invest in this tax saving infrastructure bond scheme.

Ratings

IDFC Infrastructure bond comes with the top credit rating of Fitch AAA (Ind) from Fitch and AAA by ICRA rating agencies which means they are of highest safety standard and hence investors can rely on them for paying back of interest and principal at the end of the tenure.

Features

• The face value for each bond is set as Rs. 5000.
• The minimum application is for 2 bonds and in multiples of 1 bond thereafter
• The interest rate for these bonds is 9% p.a. while for the cumulative option it is 9% cumulating annually
• The maturity of these bonds will be on 10 years from the date of allotment but comes with the buyback option after 5 years
• Buy back intimation period
• Rs. 5000 invested in cumulative option will give you an yield of Rs. 7695 per bond for 5 years and while for 10 years it would be Rs. 11,840.

Benefits

• No TDS for these bonds if you go for the demat option
• Will be listed in BSE and NSE and can be sold after 5 years lock in period
• You can also avail loans with these bonds after 5 years
• The interest will be credited to band via ECS
• Can buy with or without demat account

If you are looking to invest or exhaust your full Rs. 1 lakh 20 thousand limit on your tax saving schemes you can opt for this bond as it comes with rating and is an ideal choice to invest just for the tax saving purposes.

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The The Industrial Finance Corporation of India (IFCI) is the first Development Financial Institution in India and was later incorporated as a company after the liberalization of economy.  IFCI offers a whole variety of products like short term loans, mid and long term loans and business expansion loan for various corporate.  They are also involved in Lease Financing, Purchase of NPAs and Standard Assets, financing promoters contribution, etc.

IFCI Infrastructure Bonds Series III

• You can make investment of up to Rs. 20,00 to get tax exemption under section 80CCF
• Minimum application is Rs. 5000 for a single bond and above.  There is no limit buying the number of bonds and can buy as many as you wish
• Maturity will be either for 10 years or 15 years
• Interest Rate for 10 years – 8.5% p.a. and for 15 year – 8.75% p.a.
• Rated as BWR AA- with stable outlook by BWR and CARE A+ by Care
• Can be brought and owned in both physical and demat form

Buyback

These IFCI Infra Bonds comes with the buy back option after finishing up on the lock-in period of 5 years or 7 years for the 10 year bonds and while for the 15 years bonds the buy back option is available for 7th year, 10th year and 12th year.

You can find all the application form and the Series III bond details at their website ifciltd.com and download it and submit the same to them and the last date to do the same is November 14, 2011.

If you are yet to invest this Rs.20,000 criteria for tax saving purpose on any tax saving infrastructure bonds yet, then give this issue of IFCI a try as they are

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As we all know that term plans are pure protection plans which does not have any survival benefit attached to but can only be benefited by your family in case of unfortunate death of the insurer during the policy term.  This is the pure form insurance that one should definitely have unlike the endowment plans, money back plans or even the much hyped ULIP plans which are nothing but investment cum insurance plans where you get to enjoy the benefit upon your survival.

Why Term Plan

Unlike the other insurance policies, term plans should definitely feature in everyone’s portfolio allocated for the insurance.  These term plans are ideal for anyone who have dependents who are living out of your income and cannot survive without it in case of sudden demise.  If you have term plan, the amount insured will be given to your family who can use it.

How to Buy Met Protect

1. Just visit the Met Life Insurance website and choose the MetProtect plan and then choose the amount that you desire which you would feel would be ideal for your protection of your family in case of unfortunate death of the insurer.
2. Choose the duration for the cover of the term plan (ideal to choose the maximum years for better protection)
3. Just fill in the proposal form given with all your details truthfully and correctly
4. Pay the premium via credit card/debit card, cheque or even the IVRS.
5. Just get the documents required (will be told at the time of buying the plan online) ready so that the representative from MetLife will come and collect it.
6. After that you will need to undergo medical tests at your place without any additional charges in which a medical personnel or tem authorized by MetLife will come and visit you depending upon your availability.
7. Finally after everything is done successfully you will be sent the policy documents via the courier and you are now officially the insurer of the Met Protect Term Plan from MetLife.

Features of Met Protect

• Lowest premium since brought online
• Even lower premium for the non-smoker
• Different premiums for female insurers
• Tax benefits under section 80C on premium
• Minimum and maximum entry ages 18 and 60
• Maximum expiry of policy 70 years
• There is no limit for the sum assured amount
• Flexible premium payment option (Single/annual/half yearly)
• Death benefit for the beneficiary
• No maturity or surrender value benefits

Free Look in Period

After buying the Met Protect Term Plan online you find some of the terms not in line with what you had expected or didn’t want to continue with your policy you can just cancel the policy within 15 days by returning the same to Met Life within that time frame and you will get the premium refund minus the medical exam expenses and stamp duty charge, etc.

Exclusions with MetProtect

There are some exclusions applicable for this pure term insurance plan as well like suicide within 1 year of the policy start.  There are also exclusions on certain travel where travel advisory had been advised.

Verdict

If you have not brought any term plan for yourself yet and looking to buy one, then you can surely try out this pure term plan, Met Protect from MetLife which on the whole looks like a very promising term plan and the premium that you are going to pay for the happiness of your family during your absence too seems to be reasonable.  It is a must to have a regular term plan rather than buying those useless endowment, ULIP or money back insurance plans.

But try to be as truthful and frank when filling the insurance claim form as well as with your medical examination as you don’t want your family to be denied of the claim during your absence simply due to the fact that you have hidden or given wrong information regarding your health or other habits (read smoking or other bad habits) you may have!

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About PFC

Power Finance Corporation Limited (PFC) is one of the leading financial institutions in India which targets the infrastructure segment.  It is a Govt. of India undertaking company.  It is an infrastructure finance company with the NBFC-ND-IFC status.  As of September 30, 2010 they have the NPAs of 0.01% of the total loan portfolio.

Issue Open and Close

The current tranche of bond issue from PFC is open to public from February 24, 2011 and the issue closes on March 22, 2011.

Interest Rate
The rate of interest will be 8.3% for the 10 year tenure bonds while it will be 8.5% for the 15 year tenure.  Both the option comes with the cumulative of interest and hence the interest earned will be much higher in that case.  These PFC Bonds come up with a lock-in period of 5 years which means that the investor can sell it back to the Power Finance Corporation after 5 years.

Safety & Rating

Since being a Government of India Undertaking, Power Finance Corporation Infrastructure Bonds surely scores high on safety part and the investors can surely invest in it without fearing about the same.  And also these Power Finance Bonds come with the following credit rating namely, AAA/Stable from CRISIL and LAAA with stable outlook from ICRA.  And hence this means they are highly secure to invest.

Holding Option

The Power Finance Corporation Long Term Infrastructure Bonds can be held in physical or demat form.  While for the physical format you will need to furnish all the KYC document but those were not needed for those opting for the DEMAT option.

Tax Saving

As we all know that the infrastructure bond comes with the additional option of saving up to Rs. 20,000 over and above the 1 lakh cap that was available till last year and this current bond qualifies for the same.  You can save up to Rs. 6180 if you invest Rs. 20,000 in this PFC Infrastrucure Bond for tax saving purpose.

If you have still not invested in any of the previous infra bonds issued by L&T, IDFC, or IIFCL yet, then this is a great opportunity to invest in these bonds solely for the purpose of saving tax.  Otherwise for the investment purpose you don’t have to restrict to just Rs. 20,000 only, instead you can invest over and above that as well but those investments will not attract any tax benefit though.

Related Posts:

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• L&T Infra Tax Saving Bonds 2011 A Series
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Apart from the employees provident fund (EPF) where the deduction and investment part is done by the employers there are some saving options as mentioned below which you can consider for your tax saving purposes.

Public Provident Fund: This is one of the oldest and yet effective investment plan available under section 80C in which you can invest up to Rs. 70,000 per year for the tax savings purpose.  This has a lock-in period of 15 years.  The rate of interest is 8% p.a. cumulative annually.

National Savings Certificate (NSC): This instrument is one of the popular one till some years ago until other options like ELSS and others taken over it.  The minimum investment is Rs. 100 and there is no maximum limit.  There is a lock-in period of 6 years and you can withdraw before that and the interest rate is 8% p.a.

5 Year Bank Deposits: With this option one can just invest at the conventional fixed deposits offered by various banks, but the only difference being that there is a 5-year lock-in period for the same.  The interest rates various from bank to bank.  The least you can expect form these tax saving fixed deposits are at least 8% and above.

Equity-Linked Savings Scheme (ELSS): This is the much newer yet the most effective and best tax saving option available for you this year.  You can invest up to Rs. 1 lakh in this to claim the appropriate tax benefit in investing in it.  These are nothing but the equity based mutual funds but comes with a lock-in period of 3 years.  You can invest right from Rs. 500 and above in ELSS.  This option gives the best result due to the equities involvement but still there are risks involved equally and hence invest at your own discretion.

Unit Linked Insurance Plans (ULIP): These are the investment plans that comes along with the insurance add-on to it.  But this option is not widely recommended by the experts as the fact remains that we should not mix investment and insurance together and it is best advised to avoid these plans unless you know the implications and understand such schemes.

Life Insurance Plans: Your regular insurance that comes in the form of term insurance, endowment plans, whole life plans etc.

Tax Saving Infra Bonds: This option of tax saving under section 80CCF was introduced only in last budget.  You can save Rs. 20,000 under this scheme to save tax up to Rs. 6158.  The interest rate ranges from 8 to 8.3% with 5 years to 10 years lock-in period.

I have mentioned only some of the many options available like the health insurance plans (under section 80D) and home loan premiums, etc.  I have also given only the briefing of them just to get to know the above plans in concise format.  The more elaborate and explained version will follow soon on individual options mentioned above.

Come 2012, most of the above mentioned plans like ULIP, ELSS, NSC will lose their tax saving benefits and only the PPF and NPS among others will only be eligible for tax saving purposes though.

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This IIFCL or Indian Infrastructure Finance Company is wholly owned by the Indian government and hence the safety part is well taken care of on your investment.  Apart from these tax saving infrastructure bonds, IIFCL have come up with many other infrastructure bonds even before it was announced in the last budget and brought under the tax saving option.

Ratings:

This IIFCL Long term Infrastructure bond comes with the credit rating of AAA/Stable by CRISIL, the rating agency as well as CARE AAA by CARE rating agency which means they are very secure to invest in.

Investment Limit:

The face value for this bond issue is Rs. 1000.  You can invest up to Rs. 20,000 if your sole aim is to save tax otherwise you can invest any amount in it.

Interest Rate:

You can earn up to 8.3% of interest rate per annum for this infrastructure bond from IIFCL and just like its predecessors, the total duration to hold these bonds is 10 to 15 years but you have the option of selling it back to the company after 5 years or 7 years accordingly set forth by them.  The interest rate for the 10 years series is 8.15% while for the 15 years series is 8.30%!

If you are planning to go for any of the infrastructure bond issue to save tax, you can safely park it with IIFCL.  But the general consensus has been that it is not wise to go for these bonds considering the interest earned from these infra bonds are taxable and if you calculate them, the benefits of investing on these bonds are miniscule instead you can park that money elsewhere better!  If you are looking to invest in this IIFCL Bond, just contact your investment adviser for application form and submission as there it is not clearly or not at all mentioned at their website about the same.

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• L&T Infra Tax Saving Bonds 2011 A Series
• IFCI Long Term Infrastructure Bonds– SERIES II

Interest Rate:

This bond series comes with the buyback option at the end of 5 years and 7 years exactly.  The frequency of interest is either annual or cumulative and the interest rate effectively is 8.20% p.a. and 8.30% p.a. respectively.

How To Invest:

To invest visit the above mentioned website and download the application form, print it and fill all the details as well as attach the necessary documents required for KYC documents like the address proof, ID proof and your PAN Card Copy and finally submit the application at the nearest L&T Infra Bond collection centre listed on the website.  Or to avoid all the hard work call the above number and they will help by contacting you directly including giving the application form and collecting it from your place.

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• IIFCL Infra Bonds to Save Tax
• IFCI Long Term Infrastructure Bonds– SERIES II