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PERSONAL FINANCE: BACK-UP
Disaster-Proofing
Your InvestmentsSix
tips that'll carry your investments home even in the wake of a
catastrophe.
By
Shilpa Nayak
I have a
friend, who, you might say, suffers from a severe case of obsessive
compulsive disorder (OCD). Every time he collects a piece of paper-a
receipt for a new pair of shoes, a challan from the cops for driving while
talking on his cellphone, or even a bill from the newspaperman-he
photocopies it and keeps it in a safe place. He has squirreled away
xeroxed copies of his passport in three different places in the city-at
home, in his bank vault, and at work. Ditto for his driving licence, his
credit card numbers, his bank account details, the share certificates he
owns, and his life insurance policies. But paranoid as he may seem, my
friend's mania has its upsides.
Take a quick quiz to see why: do you know
your passport number? The numbers of your three credit cards? Your
ten-digit new-fangled bank account number? Do you have photostat copies of
your life insurance policy? Where are your share certificates? Are they
safe? And have you nominated someone for your PPF account? If the answers
to most of these are in the negative, you could have a problem if suddenly
something catastrophic happens-like an earthquake or a fire or even a
commonplace burglary.
Here are six ways to disaster-proof your
investments. Heed them, for (our apologies to Andy Grove) only the
paranoid survive.
- Always have joint holdings for all your
investments. Opt for an either/or survivor clause for your savings and
time deposit accounts with banks. Joint names are preferable for
investments in shares too.
- Keep photocopies of all your investments
in a safe place like a bank locker, a relative's house or in the safe
custody of a lawyer. Maintain a sheet of paper with all the details of
your various investments, including certificate numbers, maturity
dates, etc. Then keep the sheet of paper (and copies of it) in a safe
place. One day's work can be a lifesaver.
- Don't keep too much cash and jewellery
at home. Use a bank's locker instead. List down the jewellery items at
home and in the locker and keep copies, both at home or in the locker.
And of course, keep the locker number written somewhere and, if you
have the locker key, ensure that it is in a safe and accessible place.
- Go for a demat account. Investments in
shares should be dematerialised as far as possible. Maintaining a
demat account is much simpler than physically holding on to share
certificates, which could be damaged. Also, retrieval is much faster
in the case of emergencies because the records of depository
participants are all computerised.
- Make nominations for all your
investments whether it they are in shares, term-deposits with banks,
insurance policies, or a PPF account. Legal heirs will have to get a
succession certificate for any claims in absence of nominations or a
will. And getting a succession certificate can take up to five years.
Property transfers too are very tricky without nominations. Think of
your heirs, nominate them.
- Get an insurance policy for your house,
not just your life. And when you insure your property, don't skimp, go
for add-ons that include protection against natural calamities. Saving
a few hundred rupees in premium can cost you dear.
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