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Small cap stocks of 2021 – More than 100% returns

Shitanshu Kapadia
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Small cap stocks of 2021 – More than 100% returns

Small cap stocks are stock of small companies with low market capitalization. Small cap stocks have high potential of growth and likely to give very good returns. Small cap stocks are volatile in nature. Small cap stocks generally react with market. These stocks perform well when markets in bullish and underperform when market is bearish.

In this post, we will take a look at small cap stocks of 2021 that have generated more than 100% returns for the investors. Before taking a look at small cap stocks of 2021 first let’s take a look at few tips of selecting small cap stocks for investment.

Tips for the selection of small cap stocks

Fundamentals – You should check fundamentals of small cap stock before making investment. The balance sheet of the company should be stable. The debt on the company should be low and cash flow should be decent.

Return History – Return history is another important factor for checking. The company where you will be investing money should have decent track record. You should check at least 5 years return history.

Future Business potential – Future business potential is another important factor. The company where you are investing money should have good future business potential.

Management – Management is important in driving the company. You need to check management track record before investing. Corporate governance is extremely important factor while making investment in any company.

Small cap stocks 2021

Small cap stocks of 2021 – More than 100% returns

Adani Total Gas

The first small cap stock that have given more than 100% return in 2021 is Adani Total Gas. Adani total gas is in the gas distribution business. Adani Total Gas supplies natural gas to commercial & domestic sector. Adani Total Gas is expanding wings and increasing geographical areas for the gas distribution. The financial performance of this stock is extremely good. This stock has generated 271% CAGR return for the investor in the year 2021.

Tata Steel

Tata Steel is one of the biggest steel making company it is subsidiary of the Tata group. Tata steel is reducing debt and in extreme growth trajectory. Tata Steel has reported growth in the revenue. The strong demand in steel sector is supporting this stock. This stock has grown and doubled its value in last five months. (Jan,2021 to May,2021)

Morepen Laboratories

Morepen Laboratories is pharmaceutical company. Morepen Laboratories profit is growing fundamental of company is strong. Revenue of the company is growing. Recently company has raised fund for the expansion need. In the last five months this stock has doubled its value and given 100% returns to the investors.

Tata Elxsi Ltd

Tata Elxsi Ltd is IT company operates in hardware and software. System integration, support and software development service is main work of Tata Elxsi. The stock price of Tata Elxsi is growing exponentially. The revenue and profit margin of company is growing steadily. Many mutual funds have invested their money in the Tata Elxsi Ltd. Tata Elxsi Ltd has grown 100% in last five months. (Jan,2021 to May,2021)

Gateway Distriparks Ltd

Gateway Distriparks is logistic company. The company business activity is storage and warehousing. Gateway Distriparks is fulfilling logistic needs of many businesses such as automobile, gas and textile. Revenue and profit margin of company is growing year on year. This stock has doubled its price in the last five months.

Should you invest in Small Cap Stocks?

Small cap stocks are not for everyone. Small cap stocks are for high risk investors. If you have high risk appetite you can allocate small part of your portfolio in the small cap stocks. You should do enough research before selecting small cap stock for investment.

Secured Loan – Loan Against FD

Shitanshu Kapadia
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Secured Loan – Loan Against FD

Under financial crisis applying for loan against fixed deposit is one of the best option. Loan Against Fixed Deposit is also known as secured loan. It is one of the best way to get borrowing. Instead of closing your fixed deposit prematurely you can go for loan against fd. You can get around 90-95% of deposit amount as loan. If you have money crisis you should consider secured loan option. Here is complete information about secured loan (Loan against fd).

Loan Against Fixed Deposit

Benefits of Loan Against Fixed Deposit

Minimum or No Paperwork – Loan against fixed deposit can be given with minimum or no paperwork. Bank already have your details including documents such as income proof, residence proof, Income tax return detail etc.

Lower Interest Rate – Fixed deposit act as a security for your loan. In case you are unable to pay loan the fixed deposit amount can be used for paying loan amount. The interest rate on these type of loan is lower compared to personal loan. The EMI Payable on loan against FD is low.

Fast processing – The processing of loan against fd is very fast. Bank will not check for your credit score or income documents for giving loan. You can get loan within one or two days. Few banks provide online option for availing loan.

No Prepayment Penalty – In case you have taken personal loan you need to penalty in case you do prepayment. In case of loan against fixed deposit you need to pay any penalty for the prepayment made by you.

Loan based on Fixed Deposit amount – Loan amount in case of loan against fixed deposit depends upon fixed deposit amount. Higher the fixed deposit amount means higher the loan amount.  You can get around 90-95% of deposit amount as loan.

Who can apply for Loan Against FD?

Loan against FD can be applied for all fixed deposit holders. Individual or joint fixed deposit holder can apply for loan.

This loan cannot be applied if the fixed deposit is taken on the name of minor. These type of loan cannot be applied on tax saving fixed deposit.

Loan against FD can be taken by both salaried and self-employed regardless of their profession. You need not to have decent credit score or income document to apply for this loan.

Documents required for Loan Against FD

You need to provide following documents in order to get loan against fixed deposit.

  • Application form
  • Fixed deposit receipt duly discharged in the favor of bank
  • Loan agreement acceptance

FAQ on Loan Against Fixed Deposit

(1) What additional charges to be paid to get loan against FD?

You need not to pay any additional charges such as processing fees to avail loan against fixed deposit. Interest rate is decided by bank.

(2) Can Minor gets loan against fixed deposit?

No, Loan against fixed deposit cannot be given to minor. This loan is given only to the person with age 18 years and above.

(3) What happens in case I am unable to pay my EMI?

If you fail to pay EMI for few months, the bank will use FD amount to make loan repayment.

(4) Can I get loan against FD on FCNR deposit?

You can get loan against FD on FCNR deposit. This loan can also be given on NRE and NRO deposit.

(5) Can I get this facility online?

Only few banks provide facility of getting this type of loan online. You may need to visit bank physically in order to get this loan.

Over to You

If you have fixed deposit and you have urgent need of money, you should opt of loan against FD. Loan against fixed deposit has multiple benefits compared to normal loan. You can get loan quickly and even interest rate is lower.

NFO (New Fund Offer) – Factors to consider before investing in NFO

Shitanshu Kapadia
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NFO (New Fund Offer) – Factors to consider before investing in NFO

NFO stands for New Fund offer. It is like stock IPO. In IPO new stock is released for the first time investment. Whereas in new fund offer mutual fund is released for the investor by the mutual fund companies for the first time. The NFO remains open for fixed time duration. NFO price in mutual fund is generally fixed at Rs.10 per unit. On expiry of NFO period the fund is listed in the market. After listing of mutual funds investor can purchase fund from the open market. NFO are generally available at higher price after listing.

NFO

Types of NFO

Open Ended Funds

Open Ended funds is available for all the investors. Under this category the investors and NFO subscribers can sell/redeem their mutual funds unit anytime. Exit load is applicable on this type of funds. No lock in period applicable.

Closed Ended Funds

Closed Ended funds are available with fixed period 3-5 years. Investor cannot exit closed ended fund before specified lock-in period. In the simple words closed ended mutual funds have specific tenure and fixed maturity period.

Factors to consider before investing in NFO

You should consider following factors before making investment in NFO.

Fund House Reputation

Fund house reputation is utmost important before investing in NFO. The fund house where you are investing your money should have history of operating in mutual fund industry at least for 5-10 years. You can analyze the performance delivered by the fund house in various mutual funds in the same category. This increases your chance of getting higher returns from fund.

Theme of Fund

Theme of fund is another important factor to consider while making investment. There are many themes available in the market. The theme where you are investing your money should be evergreen and sustainable for the long term. You should consider fund for the time period of at least 5 years.

Fund objective

Fund objective is next factor to consider while investing in NFO. The fund objective contains information such as asset allocation, risk and other things. You should carefully study fund objective before investing in NFO. The fund objective help you to know that what fund manager is expected to do with your invested money.

Return Potential

You should check return potential of similar funds already available in the market. The NFO prospect does not tell anything about return however, you can set expected returns based on fund objective and other parameters.

Risk Factor

You should also consider risk factor while investing NFO. New fund does not have fund performance history this means it will be difficult for you to predict fund performance and associated risk. The fund may give you better return or may end up making losses.

Minimum Subscription amount

The fund offer document contains information about minimum subscription amount. The amount is in range of Rs.500 to Rs.5000. If minimum subscription amount is higher compared to what you can invest you should consider SIP option for investment instead of lump sum investment.

Market Condition

Market Condition is another important factor while making investment. The market condition should be stable or non-volatile while making investment. You may end up making losses in near term if you do not consider market condition while investing in NFO.

Steps to open Online Recurring Deposit (RD) in SBI

Shitanshu Kapadia
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Steps to open Online Recurring Deposit (RD) in SBI

Recurring deposit is one of the most popular and secure investment option. In recurring deposit you need to invest a specific amount for the term period of recurring deposit. On the maturity investor will get maturity amount. This amount is comprising of principal and interest amount. It is like SIP investment of mutual fund where you invest money regularly instead of lumpsum.

Recurring deposit can be opened at public, private sector banks as well as at post office. Looking at safety it is advisable to open recurring deposit at either at post office or at SBI. Here is detail about SBI Recurring deposit and steps to open RD online at SBI.

Online Recurring Deposit SBI

Key features of SBI Recurring Deposit

  • Recurring deposit can be opened with 1 year to 10-year time period.
  • Minimum deposit amount is Rs.100 per month with no upper limit.
  • The rate of interest is decided by bank time to time.
  • Senior citizen will get additional interest rate of 0.5% compared to non-senior citizen
  • Penalty is applicable for late payment. The penalty amount is Rs.1.50 per Rs.100/-
  • Incase six consecutive installments are not paid deposit shall be closed automatically and balance will be credited to account holder.
  • Nomination facility is available for the customer.
  • SBI offers loan facility on recurring deposit. Amount is 90% of recurring deposit balance.
  • Premature withdrawal is allowed for the recurring deposit.
  • Deposit can be transferred from one SBI account to other.

Recurring deposit account can be opened by the individual citizen or members of HUF. You must have SBI account to open RD account. It is advisable to have stable income for opening this account. NRI can also open the RD account via NRO and NRE account.

Steps to open Online Recurring Deposit (RD) in SBI

Follow the steps given below to open RD account in SBI.

Sign in to online SBI account using internet banking user ID and password. Go to fixed deposit menu and click on the e-RD (RD)/ e-SBI Flexi Deposit option. Now select e-RD (Recurring deposit) you will be taken to the next step where you will be able to see various SBI accounts.

You need to select the account from which you want to open recurring deposit. The minimum tenure for the recurring fixed deposit is 1 year. You can check RD interest rate before making investment. On this page you will also able to select “Payable Principal and Interest” and check maturity amount.

Now click on the “I accept the terms and conditions” and click on “Submit” button. You will be able to see nominee detail specified in the saving bank account. You can continue with same nominee name in your RD account or you can change nominee name.

You can see rate of interest, investment amount, maturity date and maturity amount on the confirmation page. Once details are found ok you can proceed by clicking on the confirm button. You can get view/print option. Next step is to select deposit monthly amount and installment date. The amount will be debited from the bank account. The auto pay service for the recurring deposit will be enabled and amount will be debited from the account.

You can also open recurring deposit offline. You need to visit nearest SBI branch physically. You need to fill up physical document and provide required documents to open recurring deposit.

TDS on the Recurring Deposit

The interest received on the recurring deposit is subject to TDS. TDS of 10% is applicable on the interest amount. If the interest received on the recurring deposit is less than Rs.10000 no TDS is applicable. You need to provide PAN card copy else TDS of 20% is applicable. If your income is less you can submit Form 15G to avoid TDS.

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