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Understanding ETFs Uses, Returns and Comparison with Mutual Funds and Stocks

 Exchange-Traded Funds (ETFs) have gained popularity among investors for their unique features and benefits. In this blog, we'll explore the uses of ETFs, their potential returns, how they differ from mutual funds and stock investments, and their safety profile. What is an ETF? An ETF is a type of investment fund that trades on stock exchanges, much like individual stocks. It holds a collection of assets, such as stocks, bonds, or commodities, and aims to track the performance of a specific index, sector, or asset class. Uses of ETFs Diversification : ETFs allow investors to gain exposure to a wide range of assets without having to purchase each individually. For instance, an ETF tracking the S&P 500 gives you exposure to 500 different stocks, reducing the risk associated with individual stock investments. Cost Efficiency : ETFs often have lower expense ratios compared to mutual funds. They typically pass on lower management costs to investors since they are often passively man
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Retail Banking - > Reverse Mortgage

Reverse mortgage is a loan scheme in which house owner of age 60 and above can avail the regular cash flow from bank by mortgaging his house if he is living in the same house.

The Reserve Bank of India has formulated the following guidelines for a reverse mortgage-

  • Maximum loan amount would be up to 60% of the value of the residential property.
  • Maximum tenure of the mortgage is 15 years and minimum is 10 years. Some banks are now also offering a maximum tenure of 20 years.
  • Option of monthly, quarterly, annual or lump sum loan payment.
  • Property revaluation to be undertaken by the lender once every 5 years.
  • Reverse mortgage interest rates could be either fixed or floating
  • It will not attract any tax

Criteria

  • House owners should be above the age of 60 years. If spouse is a co-applicant, then she should be above 58 years.
  • Owners of a self-acquired, self-occupied residential house or flat, located in India. The titles should be clear, indicating the prospective borrower's ownership of the property.
  • Property should be free from any encumbrances.
  • The life of the property should be of minimum 20 years.
  • Property should be the permanent primary residence of the individuals.

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