• This refers to the ninth resolution in your cover story (Financial Resolutions 2009, 8 January). You have mentioned the interest on sweep-in accounts as 9.5%. I want to clarify that this is valid only for the duration that the minimum savings account balance is maintained. If the balance drops below this level, the sweep-in facility is used to break the fixed deposit and the interest depends on the bank's rates. This is more than the savings account interest, but lower than 9.5%.
- Deepak Patodia, e-mail
The footnote to the box 'Easy Parking' stated that the minimum balance for the savings bank account is Rs 25,000, of which Rs 10,000 gets swept into a fixed deposit. The term 'minimum balance' suggests that if it is not maintained, this facility will not be available. But we thank you for clarifying the point.
• The cover story on tax (Your Guide to Tax Saving, 22 January) was very helpful. However, it did not point out a basic flaw in the way most people plan their taxes. The entire year's tax planning is done within a span of two months. This leaves very little time for a person to manoeuvre his investments through the complex maze of Section 80C. You should have explained the benefits of starting early in more detail.
- Rohtas Malik, Gorakhpur
You are correct that most people invest in tax-saving instruments at the last minute. Though they meet the Rs 1-lakh investment limit, they fail to maximise the potential returns from this sum. We pointed out this flaw through a table 'How SIPs Work Better than Lump-sum Investing' in the section, 'A Good Time for High Risk'.
• Your story on inflation (Some Lows Are Good, 8 January) answered a very important question. Even though the newspapers report that the rate of inflation is declining, this drop does not reflect in my monthly budget. The prices of fruits and vegetables refuse to stabilise, let alone fall. This had me confused. By explaining the difference between WPI and CPI and the weightage of the consumption groups in both indices, you have helped me understand why my budget is still under strain.
- Reema Bhardwaj, Bhopal
Unfortunately, the WPI figures are wrongly interpreted when they are used to predict the effect of rising prices on households. The most relevant index of inflation for an individual is the Consumer Price Index for Urban Non-Manual Employees, the CPI-UNME. The consumption groups and their weightages in this index are better synchronised with the urban consumption basket. Hence, high food prices are reflected in the CPI figures.
• Could you send me the contact details of Taralika Lahiri, the sleuth featured in My Idea?
- Kalpana Uruwat, Pune
We will send you the contact details over e-mail.
To Talk Back, email us at letters.moneytoday@intoday.com
