Month: April 2009

Tata Motors Fixed Deposit Plan

tata-nano2

Tata Motors recently announced its Fixed Deposit plan, which is open for subscription to Resident Indians, NRIs, HUFs and Registered Societies, among others.

The fixed deposit plan has generated quite a bit of excitement, as it gives a yield of 12.83% on its 3 year — Cumulative Deposit Plan. Remember, this is the yield and not the interest rate. The interest rate remains 11%, which is still pretty high for a fixed deposit.

I think the frenzy generated by the launch of Tata Nano — the cheapest car in the world has easily over-shadowed the credit downgrade of Tata Motors to B+ by S&P (second one since last December).

From FT:

“S&P cited deteriorating cashflow stemming from Tata’s $2.3bn acquisition last year of Ford’s Jaguar and Land Rover marques as among the reasons for the downgrade – the second by S&P since December.”

Tata Sons is the parent company of Tata Motors and is one of the oldest, biggest and most reputed Indian conglomerates. So it is difficult for most Indians to even consider the idea that Tata Motors will default on its debt — S&P or no S&P, and of course the recent crisis where large banks and insurers are stuck holding toxic / legacy — AAA paper — has raised a lot of questions on the credit rating agencies themselves.

Tata Motors Fixed Deposit Plan Schemes

Here are the two schemes that an investor can choose from:

Scheme A

Quarterly Income Plan

tata-motors-fixed-deposit-scheme-a

Scheme B

Cumulative Deposit Plan

tata-motors-fixed-deposit-scheme-b

Tata Motors Fixed Deposit Plan – For NRIs

NRIs can invest in the Fixed Deposit Plan if they deposit the amount from their NRO Account and this amount doesn’t represent an inward transfer from a NRE / FCNR (B) account. Interest will be deposited in this NRO Account and NRIs need to submit their Indian address while making the application.

Tax Deduction at Source

Tax will be deducted on source from the interest of this Fixed Deposit Plan according to the provisions of the Income Tax Act 1961 for residents and NRIs.

For NRIs — the tax will be deducted at source, as the current provisions of Income Tax Act 1961 doesn not allow interest exemption on interest earned from deposits with companies.

Subscription to Tata Motors Fixed Deposit Plan

You can subscribe to this plan through your broker.  ICICI Direct has a link to it where you can subscribe to it online. If your broker doesn’t have the facility to subscribe to this plan — then you can also submit the application form at select bank branches.

Tata Motors Contact Page

This site is not related to the Tata Motors FD in any way, and if you applied for the FD and haven’t received any acknowledgment, please go to the Tata Motors page for investors.

Link for Tata Motors Investors Page

On this page, there is a phone number that you can call, and an email address that you can use to write to them about your concerns. Please use those resources to get an answer to your question.

Image Source: Tata Nano Gallery

Disclosure: I have not applied to this fixed deposit plan at the time of writing.

This site has regular features about IPOs, FDs and other investment ideas, if you would like to get that content by email, please click here.

Update: Tata Motors Investor Relations link included at the end of the page.

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OneMint – Economy and Your Finances – April 5, 2009

Welcome to this edition of the carnival, as usual, there are some great entries here and I want to thank everyone for participating.

Mirza presents Mortgage Refinance: 4 Ways To Know Its Time to Refinance Your House. posted at Explanation Mortgage Types

Cody Butler presents What Is A Traditional IRA posted at Investment-For-Beginners Blog, saying, “What is a traditional IRA and who is it for?”

Diego Cervantes presents The Mutual Fund Toolbox: Top 50 Blogs, Portfolio Tools, and More posted at Bankling.

Ifvat presents How To Pick Stocks And Mutual Funds posted at ifvat, saying, “Anytime you buy stocks what you want to consider first is whether the underlying value is worth the price. Ignoring this one important piece, may very well cause your portfolio to spiral downward.”

Verna Morris presents How to Build a Simple and Effective All-ETF Portfolio | ETF Database posted at ETFdb.

Debt

Silicon Valley Blogger presents Discover Credit Card Rewards, Sign Up Bonuses and Holiday Promotions posted at The Digerati Life

Insurance Toolbox presents How to Get Pre-Approved for a Mortgage Loan posted at Fine-Tuned Finances.

PFCreditCards presents Credit Cards are Evil Just as Knives are Sharp posted at PF Credit Cards, saying, “If you are going to complain that credit cards are sharp, you might as well complain that knives are sharp as well”

Economics

Gavin R. Putland presents Employment tax credits: the ‘marginal’ approach to full employment posted at On Line Opinion.

Dana presents The Sky is Falling, But Whom to Blame? posted at Investoralist, saying, “Instead of focusing solely on the executives, the government, its regulators, the media, and education institutions all shoulder faults in the current financial crisis.”

Investments

etrades presents Why Buy Silver Bullion? posted at eTrades, saying, “Buying Silver Bullion is becoming hugely popular. At present, silver is relatively cheap if you compare it to the cost of gold. With it’s lower price, the vast majority of people can afford to buy greater quantities of it. If you compare it to gold, your average person may be able to afford 1 ounce whereas the same person purchasing silver could buy many more times that amount.”

Pinyo presents My Company Cut My 401K Matching Contribution, What’s Next? posted at Moolanomy.

Investing School presents Beginning with Options Trading posted at Investing School, saying, “Options can be an amazingly easy way to protect yourself and reduce risk. However, it can also be very dangerous if misused.”

Aussie Investor presents Asset Allocation – Investing By The Numbers posted at Australian Investing, saying, “What is Asset Allocation and how could it make you a better investor? The purpose of this post is to look at an investment strategy which may be useful for longer term investors. It provides a framework within which to make your investment decisions. And once you have your asset allocation strategy in place, it can help you to remove some of the emotion of buying and selling which takes place in your portfolio.”

Darwin presents How to Profit from Employee Stock Options Regardless of Share Performance posted at Darwin’s Finance, saying, “This article highlights how employees can capture income on their employee stock options regardless of how the shares perform in a down market.

Personal Finance

Nickel presents Lending Money to Family and Friends posted at fivecentnickel.com.

Money Tipper presents Monitor Bank Safety Online posted at Money Tipper.

Kelsey presents Legitimate Paid Surveys posted at Cash To Spend – Online Paid Surveys.

Credit Shout presents Best Gas Credit Cards posted at CreditShout.

John Howshall presents What To Do With Your 2009 Tax Refund posted at John’s Investing Tips.

ChristianPF presents First time home owner? This is a great year for it! posted at Money in the Bible | Christian Personal Finance Blog, saying, “These are a few of the reasons that 2009 is shaping up to be a great year to buy!”

That concludes this edition. Submit your blog article to the next edition of OneMint – Economy and Your Finances using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

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Secured Credit Cards: Points To Be Cautious About

Secured Credit Cards are used by people with little or impaired credit history to start building a credit history. While these cards are useful for getting on the right track, there are a lot of secured credit card scams going around, which means that you need to be careful, when applying for a secured credit card.

TDL wrote about a new site called Money Matters yesterday, which has got some useful tips about topics related to personal finance, and I found one very easy and useful tip to recognize fraudulent offers for secured credit cards on the site.

You should be wary of a credit card offer that needs to you to dial a 900 number. A 900 number bills you as soon as you call the number, and you are pretty much charged — just for making the call. The call alone could cost you between 2 and 50 dollars, and can cause a lot of damage if you divulge sensitive information like your SSN or credit card numbers.

As soon as you see a – 900 number to call, walk away.

Frauds Misrepresenting The Credit Usage

Then there are other type of frauds which are perpetrated by misrepresenting what you will get. For instance, you may get a mail offer for a credit card with a $2500 credit limit, regardless of your credit history. All you need to do is call the number and apply.

When you call the number — the sales rep will explain the details and say that you will get a major credit card with a credit limit of $2,500.  All you have to do is pay a processing fee of $150.

After you pay the processing fee — you get a charge card and a catalog!

All you can do with this card is buy stuff from their catalog and no more.  And you are told that your credit card application will be processed only after you spend $400 on the catalog!

Even if you do spend the $400 — you will just get an application to a bank credit card in the mail and this will be no more than what you could have done yourself.

I think most people lose money on this scam because once they spend the initial $150 — they think if they spend $400 more, at least they will get their money’s worth. Clearly, if you get something that you think is deceitful in the first go, then there is no point in spending more money on it.

There are many more scams out there and generally an offer to a credit card without a check on credit history should raise suspicion.

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How I made $1000 In One Hour

Normally I am not the kind of guy who even gives a cursory look to “get rich instantly ideas”, but at the insistence of a close friend, I tried one particular scheme and it really did work.

I never expected it to work, but since it involved only about an hour of my time and just a few mouse clicks — I decided to give it a shot anyway.

My friend has already been doing this for some time now, so that gave the scheme a bit of credibility and further pushed me towards trying it.

He told me about it a month ago, I tried it about three weeks ago and got paid yesterday, so right now I am still trying to figure out what the catch is.

How can you make a thousand dollars in just an hour with very little work at all?

That’s just too good to be true, but it is true!

It also makes me wonder if I have been a fool all these years to pass the hundreds of other — get rich on the internet gigs — that have come my way. It breaks my heart to think how much money I have lost by my cynicism and inaction.

The brilliance of this particular scheme lies in its scalability. In fact the more people you can get to join — the greater will be your rewards. And  it’s not too hard to join since all you have to do is spend a few hours on the internet every week and make thousands of dollars.

All you need to do is send me an email expressing your interest to join me in making thousands of dollars by doing virtually nothing!

Or,

You could close out this browser, get back to work,  look at the system date and stop day dreaming.

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