Steps To Follow For Opening A Demat Account

Many banks are taking out there IPOs and most of you must be interested in investing money in the IPOs that are coming up. For this you first have to have a "demat account".

A demat or 'dematerialised' account holds shares in electronic form, thus saving you the bother of holding shares in paper form. Possessing a demat account is now a prerequisite for stock market investments.

You can open demat account in banks, financial institutions and stock broking houses. The broking houses in such cases also act as DPs (depository participants) intermediating between the depositories -- CDSL or NSDL and the investor. To open a demat account, first of all you have to submit an application to a DP and along with it submit required documents. Once you have a demat account to your name, you can open a trading account with a broker of your choice.

The shares bought and sold by you are reflected in your demat account. Any previously held physical share can also be dematerialized and transferred to the account.

The DP, at regular intervals, provides you with an account statement showing the balance of shares in your demat account and transactions during a period.

Following steps can help you open a demat account:

First of all you have to look for the institutions offering DP services. You have two options. Either you choose a bank/financial institution or a stock broker who could provide you the DP services as well. The factors that help you in the selection should be the charges and location convenience. The fees charged for DP services differ across the industry. Though the rates change, the charges normally categorized under the following heads:

Account openingfee

Annual maintenancefee

Transaction fee

Besides the above, depository participants also charge service tax as applicable. A bank or other DP might sometimes waive the initial account opening fees. It is better to choose a bank where you have been holding your savings account for long, then much of the paper work would get simpler and documentation will not take much time, as you are already known to the banker.

The Documents required opening a demat account:

A set of documents needed to be provided to the agent at the time of opening account are:

1. Duly completed account opening form and passport size photos;

2. A copy of PAN card as proof of identity;

3. Personalized cheque/Copy of the bank passbook

4. A copyof passport/voter ID/ ration card as a proof of address

Signing of the DP-investor agreement.

On submitting of the complete set of documents, the agent will complete the other formalities with the depository and facilitate opening of the account. You will be given a unique account number (BO ID- Beneficiary Owner Identity), which will serve as a reference number for all further transactions. After that you, must also collect delivery instruction (DI) slips from the DP. A DI slip has to be filled and sent to the DP on every delivery (sale of shares) you make. DI slip is an instruction to the DP to debit your account and credit the broker's account with the specific stock.

It is very important that the DI instruction should reach the DP the very next day after the sale, failing which the securities won't reach the broker and hence the exchange. This could result in auction of the security. For instance the exchange is able to procure those shares only at a higher price, and then the resultant loss has to be borne by you, as investor. If you have demat account as well with your stockbroker you can escape this irksome process of sending DIs, and give him a standing instruction (POA-Power of Attorney) for delivery of stocks that you sell.

Once you constrict down on a DP and get the documents ready, opening a demat account is very simple process.

How to Get Discount Car Insurance

Car insurance isn't cheap, but it's something that you absolutely have to have, as per state requirements. How, then, can you save money on insurance for your car? Well, one great way is to get discount car insurance. There are lots of companies that offer good deals on insurance that will cover you in the event of an accident, but before you go looking, you should know that there are different types of discounted insurance for your car.

One of the main ways that you can get a discounted rate on your insurance is to buy the bare minimum that you need. Check into your state's auto insurance requirements to see what kind of PLPD - or personal liability and property damage - insurance you need. This is basically the type of insurance that protects other people in the event that you are the one to actually cause an accident or to, say, run into the fence in someone's front yard. This insurance is discounted mainly because the insurance company isn't taking a huge risk on you because they won't be paying if someone hits your car or if your car gets damaged by hail or whatnot.

You can also get discount car insurance by asking about all the potential discounts you can receive from a particular company. Some companies, for instance, give their customers discounts for having good driving records, and other companies give discounts for students who have good grades. Still other companies have discounts for insuring more than one car with them or for insuring your car and your home or apartment with them. Talking to agents is a good place to figure out where you can save money by getting discounts on insurance for your car.

Another thing to think about is that it's important that you shop around for the best deals on car insurance. You'll probably be amazed at how different the prices of one company are compared with the next. The commercials are right; you literally can save hundreds of dollars a year by transferring your insurance sometimes. This is why it's really important that you check on your insurance costs every few months to make sure that you're getting the best possible deal. Luckily, you can easily check out discount car insurance prices online through a variety of websites and specialized search engines that make the process much simpler.

Banking on Universal Life Insurance

The development of the Universal Life (UL) plan has somewhat redefined the view of life insurance. Whole Life plans operated with cash values that significantly lagged behind the accumulated premiums. The Universal Life plan is unique in that it embodies an interest-bearing accumulated fund. This ensures that the cash value would exceed the accumulated premiums in a few years. It is certainly a decisive advantage that makes life insurance less of an expense. However, there is a certain degree of scepticism about the value of combining insurance and savings. A few advisors believe it would be better to take term insurance and invest the difference. Advocates of cash value insurance plan point to the benefit of forced savings. Some things are only effective in specific contexts and situations. The Universal Life plan is not an exception.

Insurance agents sometimes tell clients that after a few years the Universal Life plan pays for itself. The idea of the plan paying for itself is based on the interest from the accumulated fund being used to cover the premium. It is certainly a novel way to advertise the plan. By no means can this approach be said to be fraudulent. It can actually work. The issue arises when two benefits of the plan are highlighted simultaneously. A representative should not state that the plan would both pay for itself and provide cash on demand. This would be the equivalent of having your proverbial cake and eating it too.

One insurance agent stated that he told his clients that after 12 years, they can withdraw the maximum amount from the accumulated fund and invest it in a fixed deposit. The interest from the fixed deposit would then cover the premium for life. The problem with that is that the interest rate on a fixed deposit the agent referred to was lower by two percent, compared to the declared interest on the UL plan. If a client left the fund on the savings portfolio of the UL plan, it would have been able to generate the premium without intervention. The assumption here is that the person is not likely to have the fund liquidated for any reason. In order to for the plan to pay for itself after a few years it must not be liquidated. This would not necessarily fall into the category of unethical advice. To frame this as an added benefit of the plan would be intellectual dishonesty. Once the plan operates on a level-premium basis, the premium would be more affordable in the future anyway.

What is dangerous about the notion of the plan paying for itself is that it is used to spend more than they need to on a cash value plan. If someone needs one million dollars worth of coverage, the self-serving advisor would place all of this on a cash-value plan. Some life insurance needs have a greater time span than others. A mortgage balance, for example, could account for a significant portion of life of life insurance needs. This could be covered by term insurance. If a client has children and wants future education expenses to be included in life insurance needs. That could be covered by term life insurance as well. One should not buy into the sharp tricks by sales representatives trying to inflate their commissions.

Establishing the extent of life insurance needs is only the first part of sound financial advice. Typically, the next step should be to analyse the needs so that you use the appropriate combination of life insurance plans. The Universal life plan can work for you only if it suits your goals and needs. Only permanent or long-term needs should be covered on cash value plans instead of term insurance. Anything else would cause you to spend more on life insurance than you need to. Life insurance is a beneficial product when used properly, as is the Universal Life insurance plan when applied contextually.