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Explained In Detail: Calculation Of LTCG Tax While Selling Shares

The equity market is a focal point where innumerous companies list their shares amongst the bidders and thereby trade in exchange for receivables. The market runs through many transactions between the prospective groups of buyers and sellers. The potent return on investment from equity shares will decide the proportion of gains and losses incurred by you as an investor. These capital gains will interestingly be more than your personal investment and thereby will be subjected to tax on LTCG on shares.

Long-term Capital Gains implies the profit that is earned by the person on selling his investment holdings to purchase assets like:

  • Stocks
  • Goods
  • Real Estate
  • Corporate Bonds

To put it simply, LTCG is a profit incurred on capital investment.

While selling your shares, there are many ways suggested on the internet to calculate the total LTCG tax applied on every sale. This article brings you the easiest ways to calculate the add-on tax on LTCG on shares. Before arriving at the calculation part, you need to first have a clear glimpse of how the exchanges in the equity market work.

Decoding Equity Market Exchanges

If you try to decipher the equity market situation more meticulously then you must first understand how companies bid or list their brands in the market.

  • Firstly, the securities of the companies are listed on the market in order to get tapped by prospective investors. Then through an “Initial Public Offering (IPO)” the bidders bid for the company’s shares. This is further passed on to the residuary to be traded in the secondary equity market.
  • Thereby the trading is initiated on public or private exchanges in which you as an investor bid for the share and acquire it after the issuance conferred by the dealer.

Methods of calculating the tax on LTCG on shares

To calculate the tax on long-term capital gains on shares, you need to consider the following:

  1. The cost price of the asset purchased.
  2. Expenses induced or brokerages on selling the shares.

The formula to calculate tax on LTCG on shares is:

Tax on Long-term capital gains = Sale consideration – Cost of acquisition

To understand the calculation more deeply, it is important to learn about some terms associated with the tax applied on long-term capital gains. The elements involved are:

1.   Sales value

It is the amount received against the sale of an asset. To calculate the capital gains, you need to deduct the Securities Transaction Tax and additional brokerage charges from it.

2.   The price of purchase (acquisition of assets)

As the sub-head suggests, it is the price that you have to pay to purchase an asset. As of 31 March of every month, you need to multiply the total number of shares bought with their comparative higher rates to derive the net cost.

3.   Expenditure incurred on sale

These expenses comprise additional brokerage charges or registry against the sale of assets. In this case, the Securities Transaction Tax is not excluded.

4.   Indexation

Indexation is a method to tailor the income or capital payments as per the fixed price index. This will help you to upkeep a robust purchasing power despite the rising levels of inflation. Through indexation, you can beat the inflation rates on assets in the market and calculate the actual long-term gains on shares, with no add-ons.

5.   Holding Period

Holding period return or yield is the net return that you earn on every investment at the time you hold the asset. A holding period refers to the actual investment time of an investor. Precisely, it is the time gap between the acquisition and sales of an asset.

Conclusion

The tax applied on long-term gains on shares is to make sure that there is less possibility of a shortage in the collection of the goods and service tax. In hindsight, regardless of the profits and losses that you incur in a financial year, the imposition of tax is mandated by the Government of India. Therefore, it is suggested to know the means of calculating the LTCG tax while you exchange your shareholdings. To gain more insight on what is tax on ltcg on shares, give this blog https://www.tickertape.in/blog/long-term-capital-gain-on-share/ a read.

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Finance

Inceptial review – how does it manage to differentiate itself from competition?

Inceptial Company Vision

Inceptial is a growing Forex company, committed to empowering traders in their quest across the financial industry. For the company, there is no one-size-fits-all and because of that, a comprehensive trading offer is now on the table. All of this is possible as the brand’s vision is to provide proper guidance and efficient trading tools, suited for both professionals and beginners.

Those who want to learn more about Inceptial may find this review informative, as it highlights some of the top features currently available with this Forex company. Apart from some restricted jurisdictions (such as the US, Canada, EU, Australia, and Israel), anyone from anywhere on the planet can open an account and benefit from what Inceptial has to offer.

Inceptial Asset Coverage

Financial markets are literally in the palm of retail traders’ hands when working with Inceptial since there are currently more than 160 tradable assets available. With this brand, customers use CFDs to take advantage of price movements and instruments that come with tight trading costs, while enjoying no commissions and high liquidity.

trade CFDs with Inceptial

Source: inceptial.com

The list of assets includes currency pairs, stocks, indices, commodities, and cryptocurrency futures which are some of the most heavily-traded assets that are now becoming very attractive. For Inceptial, optionality should be granted without any roadblocks and its traders can access the full assets list, regardless of the account type chosen.

Inceptial Account Features

In terms of the account opening procedures, users should not have any issues since the process is simple and convenient. They need to choose between Classic, Silver, Gold, and VIP accounts, as these are the options currently available with Inceptial.

Inceptial trading accounts

Source: https://inceptial.com/en/account-types.php

Regardless of whether traders use a credit card or a wire transfer to complete their financial transactions, the minimum deposit required at Inceptial is 250 units (in EUR or USD). For each method, there might be daily or monthly limits, and the policies are all clearly stated on the brand’s website.

Inceptial logo

 

Source: inceptial.com

Inceptial and MetaTrader 4

There is already a common practice among reputable brands to rely solely on effective trading software. Inceptial is part of the crowd, given it currently covers the popular MetaTrader 4, a solution developed by MetaQuotes, appreciated by millions of CFD traders around the world.

With MT4, traders have access to the markets from anywhere using any type of device. The platform facilitates technical and fundamental analysis using a broad range of tools that are convenient for any user.

Inceptial Bottom Line

Inceptial is constantly working on upgrading its services, which means traders who are currently working with it benefit from competitive conditions. The brand is authorized and regulated by the National Bank of Belarus and has multiple policies setting up clear guidelines on how operations are conducted on a day-to-day basis. This shows transparency and confirms Inceptial is a trusted brand.

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Finance

Why is starting with a good credit score important?

Many have this misconception that taking a loan at a young age should be avoided as much as possible because it will impact the spending habits of youths. However, as much as it is imperative to spend money responsibly, it is equally important to have high creditworthiness to make financial decisions freely in the future. The youth start earning at the age of 22-25, where they are hesitant to take credit during their early professional lives. However, this is the time to start building your credit score so that you can get more loans at lower interest rates later. Youth are notorious for their risky, whimsical behaviour, making it difficult for banks to trust them. Thus, banks depend upon the credit score to determine the creditworthiness of people, especially young professionals. Some of the advantages of maintaining a high credit score are:

  • Secure low-interest- This interest rate is significantly less when you have a high credit score, so it is better to start small credits at a young age and maintain the credit score as much as possible. You can also apply for a virtual credit card to get started with your journey.
  • Get a loan comfortably- The credit market segment of people between 22-25 is about 60 million. Banks are trying to leverage it and encourage more young people to apply for credit cards. It can help you avail of loans very conveniently in the future. Your credit card utilization or the relationship between your credit limit and your spending is analyzed by the bank. You may be considered a high-risk borrower if you have credit card debt and high credit utilization.
  • Avail best credit to fulfil your dreams – There is a tremendous rush of energy in the fresh minds. The young generation likes to try different fields to discover their passion and explore new opportunities. A high credit score will allow you to support your endeavours financially with better loan options and lower interest rates.
  • Get equipped to take risks and explore more opportunities- The young generation wants to explore new opportunities by treading on risky fields. You can avail of a stable financial source with better loan opportunities at high credit scores.
  • Financial discipline- Your loan may qualify you for a low-interest rate personal loan allowing you to save money. Hence, you will develop the habit to track expenses to improve credit score It will improve your overall financial discipline, in general. Taking long-term and informed decisions can help you achieve your goals.

The following are some ways to boost your credit score:

  • Apply for a low-limit VISA credit card or loan
  • Track your credit score & set up automatic balance alerts
  • Raise your credit limit gradually
  • Spend less, avoid late payments
  • Pay multiple times instead of one big payment

By taking these conscious and deliberate steps at an early age, you will set the foundation for future financial freedom. Maintaining a good credit profile will give you a sense of security in the later years.

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Finance

Securing strategic profits in option trading profession

Every kind of trading business is a systematic process. No matter which marketplace you are participating in, you will need the best risk management. With risk management, a trader can predefine the best trade setups. However, the trading system does not end with that. A trader needs to secure the position sizing. And for that, everyone should implement the best techniques in market analysis. It might take some time to find the most profitable trading signal. A trader cannot bore himself while waiting for it, though. Without being sure of position size, no one can arrange pips. As a result, there will be no profits rather than loss potential. A trader should realize the consequence like that and start preparing his business strategy. While doing so, he should create the best systematic plan to secure the trades.

After securing the trades, everyone can deal with any market sentiments. A trader can implement stop-loss for any loss potential. Or he can use the take-profit for securing the potential earnings. In this way, every trader can experience the most impressive trading career in Forex. If you want a successful career like that, your trading approach should be systematic.

Simple risk exposure for Forex

A systematic trading approach starts with risk management. Every trader needs this fundamental to secure risk exposure. If someone does not have enough money to invest in trading, he will benefit from managing risk exposures. Due to the high volatility of the marketplace, a trader needs to refine the investment in each trade. Considering multiple aspects of risk management, a trader should spend some time developing the strategy. Every purchase must have the least potential loss that is fair for a trader. Even the experts use this strategy to keep their risk exposure intact.

For reference to rookie trading, risk management should not bother a trader. A trader can choose between a 1% to a 10% investment policy related to the total capital. After that, everyone should consider fitting leverage to the investment. Think about a 1:10 ratio to leverage the size of your lots. If someone uses a simple strategy for managing risk exposure, he will benefit from the options trading business. To learn some simple trading technique, you may consider the free resources at Saxo. Visit now and enhance your confidence by learning simple but efficient trading strategies.

An extensive market analysis

When risk management takes care of the investment policy, market analysis is crucial for position sizing. A trader needs it to find the best trading signals. Not only that, it helps to secure the position sizing with the best possible entry and exit points. Using the reference from a decent risk-to-profit ratio, a trader can select the perfect spots. Those spots will be crucial for stop-loss and take-profit. However, a trader needs an extensive amount of market analysis to understand the sentiments. Without being sure of the price movements, you cannot predefine the position sizing. So, you will lack efficient stop-loss and take-profit for the trades. As a result, you will fail to secure your business.

A trader cannot avoid market analysis to prepare a systematic trading approach. Since it helps to understand market behavior, a trader can have confidence in a profitable trade. Or everyone can be sure of loss potential and stop trading. Ultimately, it benefits a trader to experience a successful career.

Securing the trade potentials

Every trader should invest the most amount of effort into profit potentials. But without efficient trading psychology, a trader cannot win profits. And most importantly, traders cannot secure the profit potential of a purchase. That is why they should learn about using necessary precautions in trading. If a trader thinks efficiently of his approaches, he will implement the best procedures for risk management. Then, the risk-to-profit ratio will be set, which is beneficial for a trader. Ultimately, with an efficient market analysis, any trader can predefine the position size. Therefore, everyone can use take-profit to secure the profit potential. Where the stop-loss is there to close your trade before it’s too late, take-profit is to keep your earning intact. Hence, it is crucial for a systematic trading approach.

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Finance

HOW TO CHOOSE THE PERFECT MORTGAGE BROKER

Buying a house is a dream for almost everyone. With time, the prices of property have only been increasing which makes the dream even more distant. Taking a mortgage can help you to actualize your dream. A mortgage is a loan that you take when you are buying a house. When you have made a decision to buy a house and take a mortgage, that is just the very first step. You need to figure out a Mortgage Broker Richmond Hill who will provide you with the mortgage at the best rates and have a plan which perfectly suits yours. When it comes to brokers you might find yourself feeling overwhelmed with the number of available options. We are here to tell you how to choose the perfect mortgage broker when you are planning to buy your dream home.

The agents should be licensed

The agents must be licensed by the Financial Services Commission of Ontario. This licensing is for your safety. It will help to ensure that the agents have the much-needed expertise to help you get through any problems regarding the mortgage.

Specializing in all types of mortgages

Each broker specializes in a different type of mortgage. Some brokers work only on the commercial mortgage for new businesses and others focus on helping families finding their dream home. Finding a mortgage broker which provides you with the kind of mortgage you need can be a time-consuming task. A broker who has expertise in all types of mortgages would be able to provide you with the best deal whether it is for a commercial mortgage or a home mortgage. They will work with you to understand what your requirements are. They will help you to find the perfect plan.

The mortgage terms should fit your needs

Every mortgage has its own set of terms that one needs to abide by. The broker should be able to customize the mortgage term based on what your needs are. How the loan is going to be repaid, the interest rate and the period in which the loan is to be paid should be dependent on your comfort level. The mortgage plan should be designed around that. When the broker understands your needs are and how much you would be able to repay in the fixed time, they will work towards finding you the best possible deal.

Answering all your questions and queries with ease

Taking a mortgage is not an easy task, especially if it is your first time. You are bound to have questions about how it works and the interest rate and repayment. The broker should be able to answer all your questions with ease. They should explain the terms and conditions to you very clearly so that you know what you are getting into. A broker who is transparent about the process and works with you to help you to make an informed decision is the broker that you should be opting for.

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Finance

Day Trading Tips for Beginners | Century Financial

Investing in the stock market is a great way to grow your wealth over time. But if you want high returns, to make money riding the ups and downs of the market, day trading could be a great alternative. Read On!

Day Trading Tips for Beginners

Interested in day trading? Read this post for some expert tips that are sure to help every new day trader in Dubai and the UAE.

While share market investment offers the highest returns potential, day trading could also be highly rewarding. Unlike stock investments that are made for months and years, day trading or intraday trading involves opening and closing your positions within a single day.

In the last few years, day trading has become a popular trading style in the UAE. If you are interested in intraday trading, then here are some expert tips that are sure to help every beginner-

1. Start with the Right Trading Platform

Your day trading journey will begin with a trading platform. It is the trading platform where traders analyze stocks and other securities before placing their trades. While there is no shortage of online trading platforms in Dubai, you should select one offered by a reputable broker or investment solutions provider.

MT4, TradeRoom, CQG, and TWS are some of the most popular platforms used in the UAE. You can select a company that offers access to multiple trading platforms so that you can choose one that best suits your expertise and requirements. Ensure that the platform provides access to a large number of global equity markets and securities.

2. Choose a Preferred Security

While day trading in stocks is the most popular in the UAE, you can also day trade a host of other securities, including forex, commodities, CFDs, cryptocurrencies, and more. As you are just starting with online trading in UAE, it’d be better if you choose any one security that you find most interesting.

After gaining some experience in the selected security, you can then experiment with others. Some of the top investment solution providers in the UAE also offer research and consultancy services to help their customers generate higher returns.

3. Understand the Popular Day Trading Strategies

There are several time-proven intraday trading strategies that are used by traders across the world. Some of the most popular ones used in the share market in Dubai are Scalping, Momentum Trading, Breakout Trading, Pullback Trading, News Trading, and Trend Trading.

While the ultimate goal of each of these strategies is to help a trader find profitable trading opportunities, it will take some time, knowledge, and experience to master them. Thus, choose one or two popular day trading strategies and try to learn more about them.

Some of the brokers also offer demo accounts for practising. The demo account could be an excellent place for testing strategies before using them in the real trading account.

4. Know the Popular Indicators

Indicators are tools used for technically analyzing securities on charts and predicting their future prices. They are based on mathematical calculations that consider the volume or price of the security. RSI (Relative Strength Index), MA (Moving Average), and MACD (Moving Average Convergence Divergence) are some of the most popular indicators used for online trading in Dubai.

Like trading strategies, it’ll take some time for a beginner to understand and master these indicators. You can combine a trading strategy with these indicators to maximize return potential. Use a few popular indicators in your demo account to understand how they work and the signals they generate.

Beginners should also note that no trading indicator is fool proof. There is no guarantee that the market or price of a security will move as per the signals generated by any indicator.

Starting Your Day Trading Journey in the UAE

Patience is the key to becoming a successful day trader. While there are several strategies and indicators that could help improve your winning rate, it ultimately depends on the skills and expertise of the trader.

As a beginner, it’d be wise to start with a demo account, where you can understand how the market works and the risks associated with intraday trading.

When you start trading with a real account, start small and build your way up as you gain more knowledge and experience. The assistance of a reliable trading platform and broker in the process cannot be underestimated.

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Finance

Financial planning to help with your Investment funds

A big part of your financial planning is to learn how to invest right. Without a proper plan, one may reach a point where investments no longer yield the expected results. At times the amount of information available regarding various investment opportunities can turn into a challenge in itself. Understanding and choosing the right investment can indeed be tricky.

Newcomers especially may find the overload of information quite tough to comprehend. Certain challenges that all budding investors go through are :

  • The uncertain market
  • Understanding the risk factor
  • Choosing the right option

Having an application or a tool that can help with these challenges and guide an individual regarding his/her financial choices can be quite handy especially at the beginning. Mutual funds should be selected by you based on your plans, be it short-term or long-term in nature. Today you have investment-based apps that help you select the best options concerning your financial goals.

SIP is the smart mutual fund tool preferred by a lot of individuals nowadays. Essentially, it is a mode of investing where you fund a small portion in regular intervals. In this way, there is less fear of risks since a huge sum of money is not invested in the beginning. One can start a SIP investment where he/she invests a small portion of their income in regular intervals which helps provide accountability and also adds financial discipline.

The volatility of the market can be taken into consideration while choosing a SIP. If the market seems shaky, one can fund a small amount and if the market is seeing a promising trend, a larger amount can be invested to take advantage of the situation. A SIP investment helps beginners to navigate their way through a long-term investment plan. This is something that normal lump sum investment funds cannot provide.

Choices may overwhelm an individual. A variety of funds are available in the market to invest in, thus picking out viable options that have the potential to provide monetary gains is challenging indeed. A proper financial plan can help in this process. Deciding whether the investment needs to be short-term or long-term is a good place to start. Analyzing the risk factor and then deciding the portion of the money to invest in the next challenge. These challenges can be made easy with a good financial planning app to mentor an investor during such decisions.

SIP investment is one of the many avenues one can invest in today. Investing is a process that has its hurdles and thus no one should get into it without a sound financial plan. Investment funds are available in plenty and planning every step of the investment is mandatory to reduce the risk of the uncertain patterns of the market. When it comes to mutual funds for beginners, SIPs are one of the ways to get started.

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Finance

Payback Ltd Review – Recover Your Stolen Funds From Scammers

Payback Ltd Review

Today, we are going to discuss Payback Ltd, a world-renowned money recovery firm that specializes in dealing with scams that occur in the realm of online trading. It is true that we are in the midst of a new era of digitalization in essentially all aspects of our society. Whether it be through our culture, education, economy, or overall financial infrastructure, everything is becoming increasingly digitalized, and while this can often prove to be beneficial, it does also open the doors for scammers, hackers, and several other individuals interested in partaking in fraudulent activities. This Payback Ltd review will thus inform you about the no-nonsense approach that has been taken by the company in a continuous attempt to ward off scammers and help traders recover lost funds.

Recovery services

Let us look at some of the recovery options that the company provides. Firstly, there are four different recovery services that are provided by Payback Ltd, namely the ‘Binary Options’ aspect, the ‘Cryptocurrency’ aspect, the ‘Forex’ option, and lastly, the ‘Stock Trading’ option.

The process of recovery for all of these options remains the same, however, which is that Payback Ltd will review your case to begin with, which means performing several preliminary checks and verifications to accurately assess and ascertain as to whether the case is even winnable. Next, the company will start collecting all of the relevant evidence, which includes any documentation and information which could strengthen the case. Following that, there will be a confrontation with the entities, which means that Payback Ltd will systematically confront every entity which may have been involved in facilitating the unlawful fund transfer. Finally, the last step includes getting the money back, assuming that the case is strong enough and that you are within your rights to receive the recovery of your lost funds.

Transparency

When it comes to something as sensitive as recovering lost or stolen funds, transparency is key. As such, Payback Ltd is extremely forthcoming regarding what kind of services are being provided by it as well as how the process actually works.

All of the steps have been outlined in detail, and what we especially liked was that the company does not make any false promises or guarantees that it might not be able to deliver on. Payback Ltd is completely honest about everything, particularly regarding situations where it might not be possible to recover your funds.

Customer support

According to numerous testimonials that can be read or watched on Payback Ltd’s website, it is clear to see that the majority of people who enlisted the company’s recovery services were happy with how seamless and smooth the process was. Moreover, the customer support is fantastic and fast-acting, which means that should you ever want to ask any questions or if there is a particular aspect about your case that you may be unsure about, the customer support team will be ready to help you.

You can contact the team by filling out a form on the ‘Contact Us’ tab on the website, which will require you to enter your first and last names, your mobile number (specific to your country of residence), your email address, and a general outline of your case. Once the form is filled out, you can receive a consultation about your case, completely free of charge.

Additionally, there are some direct call options and another email address through which you can contact the team.

  • FAQ

Payback Ltd realizes that it might not always be possible to answer all of the questions that its clients may have straight away, especially when countless cases are being looked at 24/7. This is why a useful FAQ section has been created on the site, through which you will find answers to most of the frequently asked questions and usual concerns regarding how things work, as well as some general information that you may find useful.

  • Blog

Payback Ltd doesn’t just offer recovery services. It also has its own blog, which features numerous informative and comprehensive articles about a variety of topics.

You can find featured articles about forex trading, stocks, cryptocurrencies, binary trading, and various general scams. All articles are thoroughly checked and verified beforehand, so you do not need to worry about being fed false, outdated, or incorrect information.

Conclusion

Ultimately, Payback Ltd is reliable, safe, and trustworthy, and the company is well and truly committed to helping all of its clients be able to recover lost funds. Its transparency and friendly customer support team make it a top choice should you ever need to get your money back after being scammed.

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Finance

SagaTrade Review – Top Reasons To Choose SagaTrade As Your Broker

SagaTrade Review

Have you decided to enter into financial markets? You want to maximize your profits, which a variety of criteria can determine. Your financial market knowledge and awareness and your abilities and strategies create a significant difference, as does the broker you choose. They give you the platform, trading conditions, and tools, so you can expect them to play an important role throughout your experience.

Therefore, you must choose one after much thought and consideration. You can read this SagaTrade review to learn more about the benefits of using this broker. Yes, knowing why a broker is worth applying with is vital because people don’t want to move platforms frequently.

Asset Index

The asset index of each broker is the first thing you should learn about them. What markets and instruments will you be able to trade? Why is this required? It’s significant because it impacts how much money you make at the end of the day.

Every trader will be satisfied with SagaTrade’s asset list because they will locate anything that matches their risk tolerance. They provide their clients with access to some of the world’s largest financial marketplaces, and you can get the best solutions from each.

Major and minor forex currency pairs, equities and indices, commodities, and a variety of cryptocurrencies are all available for trading. Traders can diversify their portfolios and earn a significant profit.

Access to the Most Important Markets

Millions of people worldwide trade in financial markets, but not all succeed in making the money they desire. One of the reasons is because of their instrument selection. Hardly all markets may provide the same degree of returns, so pick the ones that will help you achieve your objectives.

Every broker does not provide access to markets for your choosing, so keep that in mind when deciding where to sign up. SagaTrade is an ideal choice in this case because they provide clients with access to the majority of the world’s leading financial marketplaces.

Users can trade Instruments from some of the world’s most popular financial markets, including FX, equities, commodities, and cryptocurrencies.

SagaTrade has included the most profitable choice of each market, which might assist traders in locating the instruments they require. Everyone may diversify their portfolio that reduces risk, and increases profits.

Ability to Use Leading Platforms

The trading platform of a broker should be enough to persuade you to open an account with them. It is the feature that you use the most, and it must perform competently to make transactions fast and efficiently. However, not all broker is capable of meeting traders’ expectations, so you must exercise caution. Another area where SagaTrade stands out is that they offer their clients the opportunity to use the most outstanding trading solutions available.

You can trade using the MT4 and MT5 platforms, which are the gold standard for trading platforms and provide a smooth trading experience, including quick execution and one-click trading. SagaTrade also offers a WebTrader, which users don’t have to download in addition to these options. Mobile trading options are also available to assist trader’s trade while on the go.

Great Customer Support

Customer support is one of the essential aspects of a brokerage, and many traders often overlook it. It has a significant impact on your trading experience because you won’t trade if you don’t obtain the correct help when you need it.

You don’t like left hanging, and SagaTrade has made specific that its clients might not be in this situation. They’ve added top-notch customer service, such as live chat available 24 hours a day, seven days a week. By filling the online contact form on their website, you can schedule a callback.

Aside from all these alternatives, the broker has established a FAQ area on their website where you may obtain answers to frequently asked problems. In addition, there is a range of educational tools available to people who require assistance.

Final thoughts

With a simple registration process, flexible account options, and a variety of payment options, you’ll have many reasons to choose SagaTrade as your broker.

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Finance

How to Get Started with SIP Investment in 2021?

Systematic Investment Plans or SIP allow you to invest a pre-decided amount in mutual fund schemes periodically and benefit from the compounding effect. Once you decide the amount and the frequency of investing via SIP to the mutual fund company, the amount is automatically deducted from your bank account. All the top mutual funds in India offer investors the option to choose the lumpsum method of investing or go the SIP route, according to their financial position.

The SIP option encourages you to be a disciplined investor while offering exposure to rising as well as falling markets and benefiting through rupee cost averaging. But how to go about it? Let’s find out.

Steps in SIP Investment

Now that you have decided to invest via the SIP route and reap the benefits of rupee cost averaging and compounding, you need to identify the mutual fund scheme in which you wish to put your money in.  You will also need to check the formalities required to start your investment. Here are some steps to get started with SIP investments:

  1. Identify Your Financial Goals and Risk Appetite: Investing is done with a purpose. So, the first step is to identify what you wish to achieve and how much risk you can bear for the same. So, take stock of your financial positions, your assets, and liabilities and identify how much money you can spare every month or quarter for investment purposes.
  2. Choose a Mutual Fund Scheme: Once you are clear about the investment objectives you need to finalise a scheme that can help you achieve your goals. Compare the different options available and choose a scheme or schemes that offer you the right mix of debt and equity investments. You can even compare the performance of different mutual funds to identify the ones which can help you achieve your financial goals.
  3. Start the Investment Process: Once you finalise the mutual fund scheme, you need to decide the amount and the duration of investment. You can use an SIP calculator for the same. The calculator helps you analyse the probable returns on your investment of a specific amount for a specific period.
  4. Check the Terms and Conditions: The top mutual funds in India also offer the SIP option of investment but some of them even give you a flexible option wherein you can increase or decrease the SIP amount according to your cash flows. But the general duration of SIP investment is one year, 3 years and 5 years. Choose a term according to your investment goals.
  5. Choose the Online or Offline Options: You can make your SIP investments online as well as offline. This requires you to apply along with certain documents to complete the mandatory Know Your Customer or KYC process. You may also need to complete certain other formalities before starting the investment.
  6. Check Allocation of Units: The number of units allocated to you depends on the Net Asset Value of the units on the day of your SIP investment. And every time you invest, fresh units are added to your account, but the number of units may vary due to the change in the NAV.

Get ready for a new financial journey that inculcates discipline, prevents you from short-term volatility, and helps you achieve your financial goals.

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