Category: Finance

Credit card piggybacking is when you add someone else as an authorized user to help them improve their credit history and thus their credit score.

Adding someone as an authorized user is free and they will see that credit line appear on their report, which can help improve it.

Remember that the FICO credit score is made up for five factors:

If you add in a new credit line with a long history of on-time payments, you help improve Length of Credit History as well as Payment History, which make up 50% of the score.

The person you add doesn’t need to get the card itself. Just adding them will confer the benefits.

Minimum ages for authorized users

Some issuers have a minimum age for authorized users:

• American Express – 13
• Barclays – 13
• Discover – 15
• U.S. Bank – 13

The following banks do not list an age – Bank of America, Capital One, Chase, Citi, Wells Fargo, and USAA.

If you want to help someone, find your oldest credit card and find out if there is an age requirement.

Some banks will not report the credit card for authorized users unless they are a certain age. American Express explains in their FAQ on Additional Card Members (emphasis mine):

Q. How does the Additional Card Member establish credit?

A. Credit information will be provided to the credit bureau for the Additional Card Member when they are 18 or older. The Additional Card Member builds only positive credit history based on the credit behavior of the Basic Card Member. If the Basic Card Member becomes delinquent at any point, we will discontinue reporting on the Additional Card Member’s Card in order to retain positive history on the Additional Card Member.

Are there downsides to credit piggybacking?

If you do not give the authorized user their card, there is zero downside.

If you do, the risk is that you are responsible for their spending. They may have been added as an authorized user but it is still your credit card – you are responsible for the debt and not the person that you added. If they don’t have the card, or the number of the card, there is no risk.

Do not pay for credit piggybacking

There are some credit repair companies who will claim that this strategy is fool-proof and in a sense they are correct, there’s no risk to doing this and it’s likely to help.

There is no guarantee.

Many companies have settled with the FTC for promising this.

It’s a part of your score but if your history is long and generally bad, adding an additional credit line is unlikely to improve your score significantly. The average credit line factor is an average, so adding one card when you have 5 bad ones is not going to have a big impact.

Adding an authorized user

Adding an authorized user is really easy – just log into the issuer’s website and it’s usually somewhere under Accounts or Account services. Here it is in Chase:

You will need a limited set of personal information to add an authorized user. For Chase, you don’t even need their Social Security Number but they will still report it to the bureaus.

[Updated on July 20, 2025 to include tax calculation with the $6,000 senior deduction from the 2025 Trump tax law.]

Social Security benefits are 100% tax-free when your total income is low. As your total income goes up, you’ll pay federal income tax on a portion of the benefits while the rest of your Social Security income remains tax-free. This taxable portion goes up as your total income rises, but it will never exceed 85%. Even if your annual total income is $1 million, at least 15% of your Social Security benefits will stay tax-free.

The new 2025 Trump tax law created a $6,000 senior deduction, but it didn’t change anything in how Social Security is taxed. See Social Security Is Still Taxed Under the New 2025 Trump Tax Law. This calculator has been updated to include the new $6,000 senior deduction.

Taxation of Social Security Benefits

The IRS has a somewhat complex formula to determine how much of your Social Security is taxable and how much of it is tax-free. The formula first calculates a combined income that consists of half of your benefit plus your other income, such as withdrawals from your retirement accounts, interest, dividends, and capital gains. It also adds any tax-exempt interest from muni bonds.

This income is then reduced by above-the-line deductions such as deductible contributions to Traditional IRAs, SEP-IRAs, SIMPLE IRAs, HSAs, deductible self-employment tax, and self-employment health insurance. Finally, this provisional income goes through some thresholds based on your tax filing status (Married Filing Jointly or Single/Head of Household). All of these steps are in Worksheet 1 in IRS Publication 915.

Calculator

You can go through the 19 steps in the worksheet to calculate the amount of Social Security benefits that will be taxable, but the worksheet isn’t the easiest to use. I made an online calculator that helps you calculate it much more quickly. It only needs three numbers plus your age and tax filing status. You’ll have your answer with the click of a button.

The calculator works for all types of Social Security benefits. It doesn’t matter whether you’re receiving Social Security retirement benefits, disability benefits, spousal benefits, or survivor benefits as a widow or widower. It doesn’t matter whether you’re receiving your full Social Security benefits, or you’re getting reduced benefits because you claimed early, or you’re getting the maximum benefit because you waited until age 70.

The calculator works for both a single person and a married couple filing a joint return. If you’re married and both of you are receiving Social Security, include both your benefit and your spouse’s benefit, and both your income and your spouse’s income.

If you’re on Medicare, the Social Security Administration automatically deducts the Medicare premium from your Social Security benefits. You need to use the “gross” Social Security benefits before deducting the Medicare premium, and it should be an annual number, not monthly. You can find this number on your Social Security benefit statement or your Form SSA-1099.

It only applies to federal taxes though. State taxes don’t necessarily follow the same rules as the federal government. Different states have different rules on taxing Social Security benefits. Some states don’t tax Social Security benefits.

Tax Filing Status:	Married Filing Jointly Single
I’m 65+ by 12/31
Spouse (if filing jointly) is 65+ by 12/31
Social Security benefits (gross, annual):
All other income (wages, pension, IRA withdrawals, Roth conversion, dividends, capital gains, interest, including tax-exempt muni bond interest, …):
Above-the-line deductions. These include deductible contributions to HSA, traditional IRA, SEP-IRA, and SIMPLE IRA, and deductible self-employment tax and self-employment health insurance. Most retirees don’t have these.

$ of your Social Security benefits is taxable, which means % of your benefits is tax-free.

Your federal income tax is approximately $. This is calculated from a taxable income of $ (AGI $ – Standard Deduction $ – Senior Deduction $).

The calculated tax amount assumes that all your other income besides Social Security is fully taxable, and you take only the standard deduction and the senior deduction when eligible. It doesn’t consider lower tax rates on qualified dividends and long-term capital gains, or tax-exempt muni bond interest. Your tax may be lower if you have those, or if you donate to charities or have large itemized deductions.

If you don’t quite trust my calculator, you can double-check against the official calculator from the IRS. The IRS calculator isn’t as easy to use. It gives the same result for the taxable amount at the end, but it doesn’t include the tax estimate.

Taxable Does Not Necessarily Mean Paying Taxes

The calculator shows the taxable portion of your Social Security benefits. Having a taxable amount only means it will be included as part of your gross income on your tax return. It does not necessarily mean you’ll pay taxes.

Your gross income is still subject to your normal standard or itemized deductions to arrive at your taxable income. You still pay in your normal tax brackets of 10%, 12%, 22%, etc., on the taxable income. 50% or 85% of your benefits being taxable doesn’t mean you’ll lose 50% or 85% of your Social Security to taxes. The actual tax on your benefits is much less. The tax may be zero after applying deductions.

When more than 15% of your Social Security is tax-free, additional income outside Social Security will make more of your Social Security benefits taxable, lowering that number toward 15%. Some people call this a tax torpedo, but it’s a misleading term. It gives you the impression that Social Security is taxed more heavily than other income, which is not true. You still pay lower taxes than other people with the same income. See why that’s the case in An Unusually High Marginal Tax Rate Means Paying Lower Taxes.

“If your salary grows every year, why shouldn’t your investments?” That’s the logic behind a Step Up SIP—a smarter, more dynamic version of the traditional Systematic Investment Plan. In today’s ever-evolving financial world, staying stagnant with your investments could mean falling short of your goals. 

A step up SIP helps bridge that gap by letting you increase your SIP amount at regular intervals, keeping pace with your income growth. Whether you’re planning for your dream home, your child’s education, or early retirement, this flexible strategy can fast-track your wealth creation journey. 

In this blog, we’ll explore everything you need to know about step up SIPs—how they work, why they matter, and how tools like the best SIP planner and a systematic investment planner can help you invest smarter, not just harder.

What Is Step Up SIP?

A Step Up SIP, also known as a Top-Up SIP, is a variation of the regular SIP where you increase your SIP amount at fixed intervals—usually annually. Instead of investing a fixed amount every month throughout the investment tenure, a step up SIP lets you gradually increase the contribution in line with your income growth.

For instance, if you start a SIP with ₹5,000 per month and opt for a 10% step up every year, your monthly SIP will increase to ₹5,500 in the second year, ₹6,050 in the third, and so on.

Why Choose Step Up SIP Over Regular SIP?

Most salaried individuals or business professionals see their income increase over time. A regular SIP fails to leverage this rising income potential. By stepping up your investment amount, you can significantly increase your wealth without impacting your lifestyle.

Let’s say you stick to a flat ₹5,000 SIP for 15 years at an average return of 12% annually. You’ll accumulate about ₹25 lakh. But with a 10% step up each year, the corpus grows to approximately ₹40 lakh. That’s the power of compounding paired with step-up contributions.

How Does Step Up SIP Work?

A Step Up SIP (Systematic Investment Plan) is a smart way to ensure your investments grow along with your income. It allows you to increase your SIP amount periodically, helping you accumulate more wealth over time—without any major lifestyle changes. Here’s how it works:

1. Start with a Base SIP Amount
   Begin by selecting a fixed amount you’re comfortable investing every month—say ₹5,000. This becomes your base SIP amount.
2. Set the Step Up Frequency
   Decide how often you want to increase this investment. Most investors choose an annual frequency, but some prefer half-yearly depending on salary hikes or financial goals.
3. Choose the Step Up Amount or Percentage
   You can opt for:
   • A fixed increase every year (e.g., ₹500 annually), or
   • A percentage-based increase (e.g., 10% every year on the existing SIP amount).

This flexibility makes the Step Up SIP ideal for long-term planning.

4. Automated Adjustments
   Once you’ve set your Step Up SIP instructions with your fund house or distributor, the increase takes place automatically on the selected date. There’s no need for manual updates every year—just set it and let it grow!
5. Track with a SIP Planner
   To understand how much wealth your Step Up SIP can help you build, use a SIP planner. Fincart’s best SIP planner tool allows you to simulate different scenarios—compare a regular SIP vs a Step Up SIP—and plan your investments more strategically for long-term goals like buying a house, planning for children’s education, or retirement.

Benefits of Step Up SIP

1. Aligns Investments with Income Growth

Most people see annual increments in their salaries or business earnings. This type of SIP ensures that your investments grow proportionally without feeling the pinch.

2. Boosts Long-Term Wealth Creation

With every increase in SIP, the compounding effect magnifies. Even small annual hikes in SIP contributions can lead to a significantly larger corpus over time.

3. Disciplined Investing

Just like regular SIPs, step up SIPs inculcate investment discipline. But they go a step further by keeping your financial commitments progressive.

4. Goal-Oriented Planning

Whether it’s your child’s education, retirement, or a dream home, a step up SIP is ideal for goal-based financial planning with evolving contributions.

5. No Need for Manual Changes

Once set, the system takes care of the step-ups. It’s a hands-off approach that still responds to your growing income.

Who Should Opt for Step Up SIP?

A Step Up SIP is not just a smart investment tool—it’s a strategy built for those who expect growth, both in life and income. It works best for people who are ready to align their investments with their evolving financial journey.

You should definitely consider a Step Up SIP if you’re:

• A young professional expecting steady salary increments in the coming years and want your investments to keep pace with your earnings.
• A business owner or freelancer whose income is expected to grow over time, making it easier to gradually increase your investment without feeling the pinch.
• An investor starting small but aiming for big financial goals—this allows you to begin at a comfortable level and scale up as your confidence and income grow.
• Planning for long-term goals like retirement, your child’s higher education, or buying a house—goals that need disciplined and increasing contributions over time.

In short, if you believe in growing your wealth steadily and sustainably, a Step Up SIP gives you the flexibility and structure to do just that—without overburdening your present.

Example: Step Up SIP Calculation

Let’s illustrate with a practical example.

• Initial SIP: ₹10,000/month
• Step Up: 10% annually
• Investment Duration: 15 years
• Expected Annual Return: 12%

Without Step Up SIP:
Final Corpus ≈ ₹50 lakh

With 10% Step Up SIP:
Final Corpus ≈ ₹82 lakh

This simple tweak in investment strategy leads to an additional ₹32 lakh in wealth without starting with a higher amount!

Step Up SIP vs Regular SIP: Quick Comparison

Feature	Regular SIP	Step Up SIP
Investment Amount	Fixed	Increases periodically
Ideal For	Conservative investors	Growth-oriented investors
Wealth Accumulation	Moderate	Higher over the long term
Flexibility	Low	High
Goal Alignment	Partial	Better aligned with goals

How to Start a Step Up SIP?

Getting started with a Step Up SIP is simple and strategic. Here’s how you can begin:

1. Choose the Right Mutual Fund Scheme
Start by identifying a mutual fund that aligns with your risk appetite and long-term financial goals. Whether it’s an equity fund for aggressive growth or a hybrid fund for balanced returns, the right choice sets the foundation.

2. Use a Systematic Investment Planner
Platforms like Fincart make the process easier by offering guided investment planning. Their tools help you compare mutual fund schemes, assess your profile, and set up a Step Up SIP without any hassle.

3. Decide How You Want to Step Up
You can customize your SIP increase based on your preferences:

• Fixed Increment: Step up your SIP by a fixed amount—say ₹1,000 every year.
• Percentage-Based Increment: Alternatively, you can opt for an annual increase by a specific percentage—like 10%—which aligns well with salary hikes or business growth.

4. Monitor & Adjust as Needed
As your income and goals evolve, so should your investments. Fincart’s dashboard allows you to track performance and adjust your SIP strategy accordingly—ensuring your plan stays relevant and effective.

Starting a Step Up SIP isn’t just about investing—it’s about growing with purpose.

How Fincart Helps You Get the Best Out of Step Up SIPs

At Fincart, we understand that every investor has unique goals, income levels, and risk appetite. Our expert advisors and smart digital tools work together to:

• Customize your step up SIP strategy
  
• Recommend the best SIP planner tools for your goals
• Optimize asset allocation using our systematic investment planner
  
• Provide regular insights to fine-tune your investments over time

With our guidance, you’re not just investing—you’re investing wisely.

Common Mistakes to Avoid in Step Up SIPs

Even though step up SIPs are straightforward, here are a few things to watch out for:

1. Overestimating Future Income

Don’t commit to increases you can’t sustain. Be realistic about your expected salary hikes or business growth.

2. Ignoring Fund Performance

Step up SIPs still depend on the quality of the mutual fund you choose. Monitor fund performance periodically and make changes when necessary.

3. Delaying Investment

Waiting for a “better time” often results in missed opportunities. Start now, even if it’s small—step up SIPs are designed to grow with you.

Final Thoughts

A Step Up SIP is more than just an investment tool—it’s a strategic, scalable approach to wealth creation. In a world where your expenses and income rise every year, your investments should too. Whether you’re starting small or looking to boost your financial discipline, this progressive investment model ensures you build a corpus that truly reflects your financial aspirations.

With expert guidance from Fincart’s wealth advisors, you can craft a smart, future-ready investment strategy using step up SIPs—customized to your lifestyle, goals, and income growth.

With SEBI-registered bond platforms & RBI Retail Direct, many wonder: Debt Mutual Funds vs Direct Bonds? Learn which is better, risks, costs & taxation.

Debt Mutual Funds vs Direct Bonds: Which is Better for You?

In the last few years, investing in bonds has become much easier for common investors. Many SEBI-registered online bond platforms now highlight “high yield” bonds at your fingertips. Because of this, many people wonder — why invest in debt mutual funds when you can buy bonds directly and lock in higher returns?

But hold on — what looks simple can have hidden traps. Direct bonds carry their own risks, hidden costs, and tax surprises. On the other hand, debt mutual funds bring diversification, tax deferral, and professional management. So, which one suits you better? Let’s break it down in simple terms.

Debt Mutual Funds: Safer, Simpler, Diversified

When you invest in a debt mutual fund, your money is pooled with thousands of other investors. The fund manager uses that pool to buy different bonds — government securities, corporate bonds, treasury bills — depending on the fund’s objective.

This brings diversification. If one company defaults or delays payment, the fund absorbs the hit because there are dozens of other bonds in the portfolio. You don’t lose your entire capital. This is the biggest plus of debt mutual funds.

Another advantage is professional management. You don’t need to track which bond matures, which company’s credit rating goes up or down, or how interest rates change. The fund manager handles all this while you relax.

Whenever the fund receives interest (coupon) from these bonds, it is reinvested automatically. Because of this, you don’t pay tax every year on the coupon — taxation comes into the picture only when you withdraw or redeem your units. The capital gains are taxed as per your income slab, with no indexation now, but the deferment helps your money compound better. This simple structure means less tax hassle and often higher post-tax returns compared to direct bonds for many people.

Direct Bonds: Fixed Returns, But With Hidden Effort

When you buy a direct bond, you’re lending money directly to a company or government. In return, you get regular interest payments (called coupon) and your principal back at maturity. The biggest attraction is the fixed coupon rate — often higher than bank FDs.

However, there’s no free lunch. A bond paying 8%–9% usually comes with higher risk. If the company’s business suffers, it may default or delay payments. You carry the full credit risk.

Plus, if you want to diversify, you must buy multiple bonds from different issuers and sectors. That means more paperwork, tracking coupon payments, maturity dates, credit ratings, and figuring out where to reinvest when one bond matures. Many retail investors underestimate this effort.

Now, let’s assume you hold a AAA-rated corporate bond or a gilt (government bond). Does that mean it’s risk-free? Not really. In corporate bonds, the current credit rating can change anytime. If the company faces trouble, the rating may get downgraded, which reduces the market value of your bond.

In the case of government bonds or any long-term bonds, if you plan to sell before maturity, you face interest rate risk. If interest rates rise, the market price of your bond drops. Also, India’s secondary bond market is not very liquid — finding a buyer instantly can be difficult, so you may have to sell at a loss.

How Do SEBI-Registered Online Bond Platforms Earn Money?

Online bond platforms like GoldenPi, BondsIndia, or Wint Wealth make direct bond investing look smooth and easy. They provide access, listings, and easy buying with a few clicks. But how do they earn?

Most platforms make money in three main ways:

Spread or Commission: They may buy bonds in bulk at a lower price and sell them to you at a slightly higher price. This difference — called the spread — is their profit. So, if a bond’s real yield is 9%, your actual yield might be 8.8% or lower.

Transaction Fees: Some platforms charge you a flat convenience fee per transaction. Others offer premium services — like portfolio tracking, reminders, or exclusive bond recommendations — for additional charges.

Listing Fees from Issuers: Companies that want to sell bonds may pay the platform to list or promote their bonds. So, the “Top Picks” or “Recommended” bonds you see may not always be the best for your risk profile — they might just be paying more to be featured.

Many investors ignore these small hidden costs, but they eat into your final yield. Always check the platform’s fee structure before investing.

Also remember: these platforms are marketplaces, not your advisors. Their main job is to sell bonds — it’s your responsibility to check whether the bond suits your risk capacity.

Don’t Ignore Taxation

A common trap in direct bond investing is ignoring taxation. Bond coupons (interest payments) are fully taxable as “Income from Other Sources” at your slab rate. So, if you’re in the 30% tax bracket and your bond pays 9%, your post-tax return is effectively around 6.3%.

Debt mutual funds work differently. They don’t pay you annual interest. Instead, the interest income is reinvested, increasing the fund’s NAV. You pay tax only when you redeem, and the gains are taxed as capital gains at your slab rate (with no indexation now). Even though the rate is the same, this tax deferral can boost your post-tax returns, especially for long-term investors.

Default Risk & Credit Downgrade Risk

Direct bonds come with credit risk. If the company fails or goes bankrupt, you might lose your entire money. Even if it doesn’t default but its credit rating is downgraded, the market value of your bond drops.

If you need to sell before maturity due to an emergency, you might have to sell at a discount. Many investors ignore this and chase the high coupon rate without checking the issuer’s business health.

Debt mutual funds spread this risk by holding dozens or even hundreds of bonds. If one goes bad, the impact on your portfolio is softened.

Understanding Duration: Modified & Macaulay

Two simple ideas help you understand how sensitive bonds are to interest rate changes.

Modified Duration: Shows how much a bond’s price will change if interest rates move. If RBI hikes rates, bond prices fall. Longer-term bonds fall more than short-term ones. So, a 10-year bond’s price drops more than a 1-year bond if rates rise.

Macaulay Duration: Tells you the average time it takes to recover your investment through coupons and final principal repayment. Longer Macaulay Duration means your money stays locked in longer and faces higher interest rate risk if you want to exit early.

Debt mutual funds handle this automatically by mixing short- and long-term bonds to manage the impact.

To understand the basics of bond market, refer our earlier post “Debt Mutual Funds Basics“

The Hidden Cost of DIY Diversification

When you hold direct bonds, you must build your own mini mutual fund — that means buying multiple bonds from different companies and governments, across different maturities and credit ratings.

Tracking all this takes time, effort, and some expertise. Small retail investors often buy just one or two bonds because the minimum investment is high — but that kills diversification. If something goes wrong with that one issuer, your entire capital is at risk.

Debt mutual funds do this heavy lifting for you at a fraction of the cost and minimum effort.

Who Should Choose Debt Mutual Funds?

If you want peace of mind, easy liquidity, tax deferral, and minimal daily tracking, debt mutual funds are your best bet.

They suit salaried individuals, retirees, busy professionals, or anyone with a low-to-moderate risk appetite who prefers steady returns without the stress of monitoring credit risk.

Who Can Consider Direct Bonds?

Direct bonds may suit you if:

• You want fixed periodic income
• You have enough capital to spread across 5–10 different bonds
• You’re in a lower tax bracket
• You understand credit ratings and can monitor them
• You’re ready to handle reinvestment, paperwork, and liquidity issues

Some retirees like direct bonds for regular income. But always diversify — never bet everything on one or two bonds.

Conclusion

The bottom line is simple: If you want stable, hassle-free returns with built-in diversification, debt mutual funds are usually the better choice.

If you want direct bonds for predictable income, know the risks, watch out for hidden costs, spread your investment wisely, and stay on top of credit ratings.

Don’t get lured by “high yield” ads alone — always ask: Is the extra return worth the extra risk and effort?

In the world of fixed income, the best investment helps you sleep peacefully at night — not stay awake worrying about defaults.

Final Tip

Before investing, compare, read the fine print, check your tax slab impact, and ask: Do I really want to manage this myself or pay a small fee for an expert to do it for me?

Smart investing is not just about earning more — it’s about keeping more, safely.

To understand the basics of bond market, refer our earlier post “Debt Mutual Funds Basics“

Seeing your mortgage payment surge 20% can feel like a punch to the gut, especially when you weren’t expecting it. A jump that large can derail your monthly budget and stress your family’s finances. But there’s a path forward—you’re not helpless. Understanding why the increase happened and knowing the right moves can stop panic from taking over. So, here is what you need to know if your mortgage payment goes up. 

Pinpoint the Cause of the Increase

When your mortgage payment goes up, first identify the trigger. Is it due to an adjustable-rate mortgage (ARM) resetting, a buydown period ending, or soaring property taxes or insurance? Even fixed-rate mortgages can climb if escrow shortages or rising tax assessments come into play. Dive into your statement—focus on the breakdown: principal, interest, taxes, and insurance (PITI). If something feels off, call your servicer immediately to get clarity.

Challenge Errors or Servicing Fees

Lenders sometimes add surprise servicing fees or miscalculate escrow accounts. When your mortgage payment goes up, these charges can sneak in unnoticed. If you suspect a mistake, call your servicer right away, document your call, and request a corrected statement. If that doesn’t resolve it, formally dispute the error in writing following CFPB guidelines. Don’t let errors become permanent charges on your account.

Refinance to Lock in a Better Rate

Refinancing is one of the most effective ways to combat a mortgage payment that goes up scenario especially if your loan is past a buydown or ARM period. Refinancing can secure a lower rate or extend the term to reduce monthly costs. A 15-year refinance might add stability and save on interest long-term despite higher payments than a 30-year loan. Crunch the numbers—refinancing fees matter—but it might ease immediate financial strain.

Explore Loan Modifications or Extensions

If refinancing isn’t a fit, your lender may offer a loan modification to adjust terms and prevent foreclosure. Options include extending the loan term, lowering your interest rate, or even pausing payments temporarily via forbearance. Some government programs let borrowers cap monthly payments at a manageable percentage of income. This could reduce your monthly payment even if refinancing isn’t possible.

Manage Escrow Surprises

Escrow increases from higher taxes or insurance premiums are common culprits when your mortgage payment goes up, even on fixed-rate loans. Review your escrow analysis; sometimes lenders allow spreading shortages over 12 months, easing the immediate impact. If your homeowner’s insurance jumped, shop around or ask your broker for better rates. Lowering these dashboard components can reduce your total payment dramatically.

Cancel Private Mortgage Insurance (PMI)

Did you start your mortgage with a down payment under 20%? Your loan likely came with PMI. Reaching 20-22% equity means you’re typically eligible to cancel PMI, dropping a big chunk of your monthly bill. Even before hitting that mark, refinancing into a loan without PMI could be worthwhile. If your mortgage payment goes up just because PMI hasn’t been canceled, it’s time to act.

Go Biweekly or Increase Payments

When your mortgage payment goes up, making biweekly payments or small extra payments can reduce the interest owed over time. That doesn’t lower your current bill, but it shortens the loan’s lifespan and speeds up equity growth. Over the long run, this strategy can offset future rate hikes. If refinancing or modifying isn’t an option, consider this as part of a strategy to get ahead.

Tighten Your Budget or Explore Side Income

A 20% jump in housing costs could force tough decisions. Review where you can trim discretionary spending and tighten your budget. Could lifestyle adjustments—for example, dialing back streaming, dining out, or leisure—help balance things out? Or use this as motivation to find side gigs or extra revenue, like freelancing or ridesharing? Taking action can cushion the blow while you’re resolving your mortgage situation.

Consider Downsizing or Renting Out Space

If your mortgage payment goes up to a point beyond affordability, it may be time to evaluate whether your current home still fits your financial reality. Downsizing to a smaller property or a lower-cost area could slash monthly housing costs. Alternatively, renting out a spare room or basement suite may offset the increase. While not easy, these options can be financial lifelines if remaining costs become unmanageable.

Don’t Let Payment Hikes Derail Your Financial Plan

A 20% increase in your mortgage payment can be scary, but not unbeatable. Taking control starts with knowing why your mortgage payment goes up, then exploring every available safety net—escrow adjustments, PMI cancellation, refinancing, modifications, budgeting, or side income. Homeownership means facing unexpected challenges, but being proactive keeps surprises from becoming crises. If your mortgage payment went up, start with understanding, then choose a strategy that matches your goals.

Has your mortgage payment soared recently? What steps did you take to handle it? Share your experience in the comments to help others facing the same challenge.

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Why Retirees Are Turning Down Reverse Mortgages in 2025

The Reverse Mortgage Truth No One Wants to Say Out Loud

I grew up with a solidly middle class upbringing. My parents owned our home, my dad worked full-time and my mom worked part-time.

We were frugal, as many immigrants are, because we had to be.

My dad came here on an education visa with a one-way ticket. He would send money home all the time.

Money was a scarce resource and you had to be careful with it.

Financial insecurity is the anxiety and stress you feel about your financial situation. It’s an emotional response, not a logical one, and it can stick with you regardless of how much money you make or how much wealth you’ve accumulated.

🎧 Case in point: Here’s a short clip of a chat between Scott Galloway (~$100mm net worth) and Sam Parr (~$20mm net worth) and their financial insecurities – yes, it sounds absurd to have insecurities when you have tens to hundreds of millions… but it’s common! Khe Hy writes about it.

I once felt this acutely and despite our net worth increasing, there are still times I feel it but there are steps you can take to mitigate it.

Here are a few that have worked well for me:

Table of Contents

1. 🗣️ Talk to someone
2. 💰 Keep a larger cash cushion
3. 📔 Check in on finances regularly
4. 🥅 Establish a financial plan with goals
5. 📱 Calculate your debt-to-income ratio
6. 📺 Stop watching the news
7. 🧠 Remember, it’s a work in progress

🗣️ Talk to someone

Whether it’s a partner, close friend, or a therapist, it’s important to talk about your feelings with someone you trust. More or less, we all have emotional feelings about money. And like any other feelings, talking about them often makes them better.

The person you talk to doesn’t need to have the answers or be able to help you solve your problems. They can simply be there to listen. Just putting it into words may help you deal with some of the anxiety and stress.

I always find it funny that money is a taboo subject in such a capitalist society. Find someone you trust who you can talk to and it could significantly help your mental health.

💰 Keep a larger cash cushion

Remember, financial security is an emotional feeling, not a logical one, and so you have to trick yourself into believing you are financial secure – that means keeping a larger cash cushion in your checking and savings account.

Call it an emergency fund. Call it a rainy day fund. Call it your regular ole checking – it’s fine to keep more than you truly need if it can help alleviate your anxiety.

How much? That depends on how you feel.

I keep a few months of expenses in our checking and savings account. I know it’s better off in something else but this peace of mind is worth the few extra dollars in interest. Most of it is in the savings account, which protects the checking account from overdrafts, so I’m not giving up that much in interest.

📔 Check in on finances regularly

I update our net worth each month and this is a very important part of our financial system.

Every month, I log into each account and record the numbers. I used to check more often with tools like Empower Personal Dashboard but for monthly check-ins, I log in manually to each account. This has pushed me to simplify our finances, so I log into fewer accounts.

By recording our net worth, I know how much we have.

I don’t “feel” how much we have, I can see it.

And I’m reminded that some months the market does badly and the number goes down by a lot. Sometimes the market does well and it goes up by a lot. This slowly inoculates me from the emotional response to market volatility, which is inevitable.

🥅 Establish a financial plan with goals

A financial plan is good regardless of how you feel about your money.

One with goals will give you a sense of progress and growth as well as a path forward.

Uncertainty is what creates worry. Having a plan can help with that uncertainty because now instead of fearing the unknown, you’re working towards a goal. You can redirect that energy.

I do want to add that there is something known as the boring middle. This is when you’ve established a plan and you’re simply working towards your goals. There’s nothing to do, per se, except continue on the path you’ve chosen. It’s “boring” because there are no decisions, but that’s part of any trip.

Don’t let insecurity creep in during the boring middle – keep following your plan.

📱 Calculate your debt-to-income ratio

If you have a “lot of debt,” that can be stressful. Sometimes it’s the numerical figure that causes you stress. Sometimes it’s simply its existence.

By calculating your debt-to-income ratio, you can put that debt into context.

And not all debts are equal. Unsecured credit card debt is different than mortgage debt. I’d argue that most people with a mortgage probably have a seemingly sky-high debt to income ratio… but that’s normal, especially if you’re young.

📺 Stop watching the news

During Covid, the news was a direct cause of my anxiety. It also caused financial anxiety because the markets were crumbling as the whole of the United States shut down.

All of our kids were home. We were stressed. And now I’m watching scenes of overflowing hospitals and infection figures. It was terrible.

I stopped watching the news. Being informed wasn’t helping me manage my day to day. It was making it worse.

Stopping was the best thing I did for our mental health during that period.

You can watch the news if it doesn’t cause you anxiety but if it does, consider stopping. Stop it and anything else that makes the feelings of anxiety and insecurity worse. Perhaps it’s staying off social media. Perhaps it’s something else – but try to identify it and stop.

🧠 Remember, it’s a work in progress

To this day, despite being in a much stronger financial position, I don’t like spending a lot of money. I also love finding a good deal. It’s hard to shake the things you learn as a kid but it’s something that you need to do, especially if they no longer serve you.

Yes, the dopamine hit you get when you find a deal is always fun but it costs you precious time. While I won’t drive across the street to save 5 cents a gallon on gasoline, I will search for coupons before I buy something. 🤣

It’s a work in progress and the work is never done. There’s always going to be a time when it creeps in and you just have to use your tools to calm it down. Hopefully some of these ideas will help.

Do you have any strategies you use to combat it?

The new 2025 Trump tax law — One Big Beautiful Bill Act — created several new tax deductions. Some people say they’re above-the-line deductions, but that’s not true. These new deductions are all below-the-line. This post explains the difference between the different types of tax deductions.

Not a Tax Credit

First of all, a tax deduction is not a tax credit.

A tax credit directly reduces your tax dollar-for-dollar. If you’re supposed to pay $5,000 in tax, a $1,000 tax credit reduces your tax to $4,000.

A tax deduction lowers your taxable income, which indirectly reduces your tax. If you’re supposed to pay $5,000 in tax, a $1,000 tax deduction lowers your taxable income by $1,000, which then reduces your tax by a fraction of it, depending on your marginal tax rate.

Therefore, a $1,000 tax deduction is worth a lot less than a $1,000 tax credit.

Within tax deductions, there are above-the-line deductions, standard deduction, itemized deductions, and a set of deductions that are neither above-the-line nor itemized.

Above-the-Line Deductions

Above-the-line deductions are officially called adjustments to income. The “line” refers to the line on the tax form for your Adjusted Gross Income (AGI). Your AGI is a key number that determines your eligibility for many tax breaks. It’s the starting point for Modified Adjusted Gross Income (MAGI) for various purposes, for instance, child tax credit, ACA health insurance premiums, and IRMAA.

A tax deduction is either above-the-line or below-the-line. Above-the-line deductions lower your AGI and help you qualify for other tax breaks. Below-the-line deductions don’t affect your AGI, and they don’t help you qualify for other tax breaks.

Therefore, a $1,000 above-the-line tax deduction is better than a $1,000 below-the-line deduction.

Only specific tax deductions are designated as above-the-line. They are listed on page 2 of Form 1040 Schedule 1. Here are some examples:

• HSA contributions made outside of payroll
• Deductible Traditional IRA contributions
• Educator expenses
• 1/2 of the self-employment tax
• Contributions to small business retirement plans
• Self-employment health insurance deduction

Standard Deduction Or Itemized Deductions

The standard deduction and itemized deductions come after the AGI. They are below-the-line.

The standard deduction and itemized deductions are mutually exclusive. If you choose to take the standard deduction, you give up itemizing your deductions. If you choose to itemize, you forego the standard deduction.

Typically, you itemize only when the sum of your itemized deductions is greater than your standard deduction. You keep it simple and take the larger standard deduction when you know you don’t have that much in itemized deductions.

Taking the standard deduction is a win because you’re deducting more than your allowable itemized deductions. Over 80% of taxpayers take the standard deduction. So do I.

Itemized deductions are listed on Form 1040 Schedule A. Mortgage interest, state income tax, property tax, and donations to charities are typical itemized deductions (except for the new $1,000/$2,000 charity donations deduction for non-itemizers).

Floors and Caps

Just because something is tax-deductible, it doesn’t mean you can deduct 100% of it. This is because some deductions must first clear a floor.

For example, medical expenses are tax-deductible, but you can only deduct the portion that exceeds 7.5% of your AGI. That comes to zero for many people.

Some deductions have a cap. You can deduct only up to the cap, even if you paid more. State and local taxes (SALT) are a well-known example of this.

The new 2025 Trump tax law increased the SALT cap. More people are expected to itemize deductions, but they’re still a minority. Over 80% of people will still take the standard deduction.

Below-the-Line, Available-to-All

In the old days, individual tax deductions were either above-the-line or itemized deductions. Only above-the-line deductions were available to both itemizers and non-itemizers. Below-the-line deductions were only the standard deduction or itemized deductions. After taking the above-the-line deductions, you could only take the standard deduction if you don’t itemize.

This dichotomy between above-the-line and must-itemize no longer holds. Congress has created several deductions in recent years that are below-the-line but don’t require itemizing. You can still take these deductions when you take the standard deduction, but they don’t affect your AGI. A deduction available to both itemizers and non-itemizers doesn’t necessarily mean it’s above-the-line.

	Itemizers	Non-Itemizers
Above-the-Line Deductions	✅	✅
Standard Deduction	🚫	✅
Itemized Deductions	✅	🚫
Below-the-Line, Available-to-All	✅ (unless specifically excluded)	✅

Both above-the-line deductions and this new set of deductions are available to everyone (unless it’s specifically excluded). The difference is in whether it affects your AGI. Only the standard deduction and itemized deductions are still either-or.

Congress created these below-the-line, available-to-all deductions because they wanted to make them available to more people. Giving them to only itemizers (10-20% of taxpayers) would be too limiting. But Congress didn’t want these deductions to lower the AGI and trigger other tax breaks. Some of these deductions themselves have limits based on the AGI. Making them above-the-line would create a circular math problem.

Here are some of the below-the-line available-to-all deductions:

All of these deductions are still available if you take the standard deduction, but they don’t lower your AGI.

Cost Inflation Index (CII) is a critical tool in India’s tax system, used to adjust the purchase price of long-term assets to account for inflation. This adjustment helps reduce the taxable portion of capital gains when assets like property, gold, or debt mutual funds are sold.

Without CII, investors would pay taxes on gains that simply reflect inflation rather than real profit. Understanding how capital gains tax indexation works through CII can significantly lower your tax liability. In this blog, we’ll break down the full form of CII, its purpose, calculation method, and why it’s essential in long-term asset planning.

For asset-specific strategies or complex scenarios, consulting a tax planner, investment advisor, or professional tax consultant is highly recommended.

What Is the Cost Inflation Index (CII)?

The Cost Inflation Index (CII) is a crucial component of India’s income tax framework, especially when calculating long-term capital gains. It allows taxpayers to adjust the purchase price of assets to reflect inflation, thereby reducing taxable gains.

CII is a capital gain index notified annually by the Central Board of Direct Taxes (CBDT) under Section 48 of the Income Tax Act, 1961.

Here’s why it matters:

• Purpose: The CII is used to calculate the indexed cost of acquisition for long-term capital assets.
• Application: It applies to the sale of:
  • Real estate (residential or commercial property)
  • Land
  • Gold and other physical assets
  • Debt mutual funds
  • Any other capital assets (except equity mutual funds and certain bonds)
• Impact: By factoring in inflation, the CII ensures you’re taxed on real profit—not just inflationary gain.

This inflation-adjusted computation is key for individuals and businesses to reduce their capital gains tax. Without it, you’d end up paying tax on gains that merely reflect the rising cost of living rather than actual returns.

In summary, understanding and applying the Cost Inflation Index (CII) is essential when disposing of long-term capital assets, especially if you aim to optimize your tax outgo legally and efficiently.

How Does the Cost Inflation Index Work?

Let’s break it down.

When you sell a long-term capital asset, your profit is the difference between the sale price and the purchase price of the asset. However, inflation erodes the value of money over time. What you paid for a house 10 years ago cannot be directly compared to today’s prices. To account for this disparity, the indexed cost of acquisition is calculated using the CII.

The Formula for Indexed Cost:

Indexed Cost of Acquisition =
(CII of the year of sale × Cost of Acquisition) / (CII of the year of purchase)

This adjusted cost is then deducted from the sale price to compute long-term capital gains (LTCG).

Why Was the Base Year Changed?

Initially, the base year for CII was 1981. However, in 2017-18, the government revised the base year to 2001, to simplify asset valuation and eliminate disputes over outdated documentation. So, the capital gain index chart now uses 2001-02 as the base year with a value of 100.

If an asset was acquired before April 1, 2001, the Fair Market Value (FMV) as of April 1, 2001, can be considered as the purchase price for capital gain index calculation.

What Is the Capital Gain Index Chart?

Here’s a glimpse into the cost inflation index table for recent years:

Financial Year	Cost Inflation Index (CII)
2024-25	363
2023-24	348
2022-23	331
2021-22	317
2020-21	301
2019-20	289
2018-19	280
2017-18	272
2001-02 (Base)	100

The complete indexation chart is published every year by the CBDT and can be referred to for calculating capital gains.

How to Use the Cost Inflation Index in Capital Gains

Let’s understand the application of CII with an example:

Example
Mr. Arjun purchased a property in FY 2004-05 for ₹10,00,000 and sold it in FY 2022-23 for ₹50,00,000.

• CII for FY 2004-05 = 113
• CII for FY 2022-23 = 331

Indexed Cost of Acquisition = (331 × ₹10,00,000) / 113 = ₹29,29,204

Long-term Capital Gain = ₹50,00,000 – ₹29,29,204 = ₹20,70,796

Now, instead of paying tax on ₹40,00,000 (straight difference), Mr. Arjun only pays tax on ₹20.70 lakhs—thanks to indexation for capital gains.

Important Points to Know

1. Minimum Holding Period
   For an asset to qualify as a long-term capital asset:
   • Real estate and gold: Held for more than 24 months
   • Debt mutual funds: Held for more than 36 months
2. No Indexation on Certain Assets
   • Equity shares and equity mutual funds are taxed differently and do not qualify for indexation.
   • Bonds and debentures are also excluded, except for capital indexed bonds and sovereign gold bonds issued by the RBI.
3. Inherited or Gifted Assets
   If you inherit or receive an asset as a gift, the holding period of the previous owner is also counted, and indexation benefits apply accordingly.
4. Improvement Cost
   Any cost incurred to improve the asset post-2001 is eligible for indexation using the inflation rate formula.

How to Use the Cost Inflation Index Calculator

Several online platforms provide a cost inflation index calculator where you can simply enter:

• Year of purchase
• Year of sale
• Purchase cost

And the tool will compute the indexed cost and capital gains automatically. This is especially useful for non-financial users.

Still, if you’re unsure, you may consult an investment advisor or an online financial advisor in India to help with more complex assets and tax implications.

Benefits of Using CII in Capital Gains Calculation

1. Tax Savings

By adjusting the cost of the asset for inflation, your taxable gains reduce, which lowers your capital gains tax.

2. Encourages Long-Term Investing

Indexation benefits are only available on long-term capital assets, thus motivating investors to hold assets longer.

3. Helps Track Real Gains

It separates real income from inflationary income and ensures you’re taxed only on actual profits.

How Businesses Can Benefit from Indexation in Asset Disposal

Indexation isn’t just beneficial for individuals—businesses and SMEs can also significantly reduce their capital gains tax liabilities by applying the Cost Inflation Index (CII) when disposing of long-term capital assets. These may include land, buildings, equipment, or intangible assets like patents and trademarks.

Since such assets are typically acquired years before disposal and recorded at historical cost, the difference between book value and market value at the time of sale can result in hefty tax burdens. This is where indexation becomes a powerful tool.

Here’s how businesses can benefit:

• Tax Efficiency: By applying the capital gain index, companies can adjust the acquisition and improvement costs of long-held assets for inflation. This helps lower the net taxable gains.
• Better Planning During Restructuring: During mergers, acquisitions, or internal reorganizations, indexation ensures realistic valuations and prevents inflated profits on paper.
• Automated Compliance: Businesses using modern accounting tools can integrate cost inflation index calculators to simplify calculations and reduce manual errors.
• Avoid Tax Overstatement: CII helps ensure that taxes are calculated on real gains rather than nominal increases due to inflation.

Despite automation, businesses should:

• Consult a tax consultant to ensure correct application of indexation principles.
• Use expert guidance from an online financial advisor in India to interpret recent changes and notifications by the Income Tax Department.

By strategically leveraging indexation for capital gains, businesses can strengthen their tax planning approach while maintaining compliance.

CII and SIP-Based Investments

Although CII doesn’t apply to equity-oriented SIPs, it plays a major role in calculating capital gains for debt mutual fund SIPs. For each installment of the SIP, the holding period is calculated separately, and eligible ones can get indexed.

If you’re exploring long-term SIPs in debt instruments, speaking to a sip investment planner or financial consultant can help optimize returns and minimize tax outgo.

CII for Tax Planning

Effective use of the capital gain index is a smart move for investors and property holders looking to legally reduce their tax liabilities. The CII index allows you to adjust the cost of acquisition based on inflation, ensuring you’re not overpaying tax on your capital gains.

Here’s how you can leverage the Cost Inflation Index in practical scenarios:

• Selling inherited property: The CII index can be applied to the Fair Market Value as of April 1, 2001, ensuring lower taxable gains when disposing of ancestral or inherited assets.
• Redeeming debt mutual funds: For long-term holdings, indexation helps reduce your tax burden by inflating the purchase cost in line with inflation.
• Managing multiple capital assets: If you own various assets acquired over different years, applying the relevant CII values helps compute accurate gains across your portfolio.

Whether you’re a first-time investor or someone dealing with complex asset structures, a strong understanding of indexation is essential for smart tax planning.

If you’re unsure how to calculate indexed gains or apply them to various asset types:

• Seek help from a tax consultant or an investment advisor.
• You may also consider tax consultation services for a more comprehensive review of your portfolio.
• A local tax consultant in Bangalore or any other city can help tailor strategies specific to your investment and asset history.

Incorporating the Cost Inflation Index (CII) into your tax planning not only helps you stay compliant but also ensures you’re making the most of available deductions.

Conclusion

The Cost Inflation Index (CII) is more than just a number—it’s a tax-saving tool that can have a significant impact on your capital gains. Understanding how to use it effectively ensures that your tax burden reflects true economic gain, not just inflation.For professional assistance, reach out to a professional tax consultant, investment advisor, or financial consultant who can guide you on optimizing your investments with the right tax strategy.

Learn how to check if your mutual funds are in Demat vs SOA format. Understand Groww’s new approach and know where your mutual fund units are held.

Mutual funds have always been considered one of the simplest investment tools for every common investor. But lately, a lot of investors are waking up to a new surprise — they are realising that their mutual fund units are not in the format they thought!

This confusion came to light recently when Groww, a popular direct mutual fund platform, quietly shifted fresh mutual fund investments of many investors into Demat format instead of the usual SOA (Statement of Account) format. Many new investors didn’t even realise this switch was happening.

In this blog post, let’s understand:

• What is Demat vs SOA format?
• What happened with Groww and why it matters.
• How YOU can check if your mutual fund units are in Demat or SOA format.
• Which format is better for you as a long-term investor.

What is Demat and SOA Format?

When you invest in mutual funds, there are two ways your units can be held: Demat format or SOA format (refer my post “Should You Hold Mutual Funds in Demat Form? Pros & Cons“).

Demat Format:

• Your mutual fund units are stored in your Demat account, just like stocks.
• You buy/sell units through a stockbroker or trading platform.
• Your units show up in your stock holdings.
• Charges like Demat AMC and brokerage may apply.

SOA Format:

• Your units are directly held with the AMC (mutual fund company) or with the registrar (like CAMS or KFintech).
• You get a Statement of Account (SOA) as proof.
• You transact directly with the AMC or through platforms like MF Utility, or trusted advisors.
• There are no Demat-related charges.

Both methods are legal. But the difference shows up when you switch funds, redeem, or look at costs and convenience.

What Happened Recently with Groww?

Many of you might have read my recent article about Groww’s silent shift (Groww Demat Mutual Funds: Should You Switch or Stay?). Groww, which started as a mutual fund-only platform, later became a full-fledged stock broker too. Recently, they quietly converted new mutual fund purchases into Demat format instead of SOA.

So, if you invested in mutual funds on Groww expecting the usual SOA, you might now find your units in your Demat account instead. Many investors didn’t know this was happening — and are now confused at the time of redemption or when trying to switch funds.

This is exactly why this article is important — so you don’t get any surprise when you need your money!

Why Does It Matter?

Let’s refresh the key differences with a simple table:

Aspect	Demat Format	SOA Format
Where your units are	In your Demat account with your broker	Directly with AMC/Registrar
How you transact	Through broker platforms	Through AMC or RTA portals
Switches between funds	Not possible, you must redeem and reinvest	Easy within the same AMC
Extra charges	Demat annual charges, brokerage	Usually none
Transmission (after death)	Follows Demat account rules	Easier if nominee is updated
Who controls your data	Broker + Depository	AMC/Registrar directly

In the Groww incident, the main issue was lack of clear communication. Many investors didn’t know about this shift and naturally felt cheated when they discovered that redemption/switch processes were not as simple as before.

How to Check If YOUR Mutual Funds Are in Demat or SOA?

If you’re wondering, “Are my units in Demat or SOA?”, here are some simple checks you can do today:

1) Log In to Your Broker Account

If you use Groww, Zerodha, Upstox, ICICI Direct, HDFC Securities or any stockbroker:

• Check your Holdings/Portfolio section.
• If you see your mutual funds listed along with your stocks — they are in Demat format.
• If not, they may still be in SOA.

For Groww users specifically:
If you invested before Groww started the Demat shift, your old units are probably still in SOA format.
If you invested recently, chances are they are in Demat format.

2) Look at Statements from AMC or Registrar

If you receive statements from AMCs (like HDFC Mutual Fund, SBI Mutual Fund) or from CAMS/KFintech, those show SOA holdings.

• Check your email for any SOA or Unit Statements.
• If you get these, your units are in SOA.
• If you only see your units in your Demat account and no SOA, then they are in Demat format.

3) Check CAS (Consolidated Account Statement)

If your units are in Demat, they appear in your NSDL/CDSL CAS (the same statement that shows your stocks).

If your units are in SOA, they will appear in a separate statement from CAMS/KFintech.

So, check both:

• NSDL/CDSL ? For Demat units.
• CAMS/KFintech ? For SOA units.

4) Try myCAMS or KFinKart Apps

These apps show all your SOA folios.

• Download myCAMS or KFinKart, log in with your PAN.
• If you see your units here, they are in SOA format.
• If not, they are probably Demat.

5) How Did You Invest?

Ask yourself: How did you buy this fund?

• Bought through a broker like Groww (after they started Demat) ? Units likely in Demat.
• Bought directly through AMC website or MF Utility ? Units in SOA.
• Bought long ago through an advisor who never used your Demat ? SOA.

Can You Convert from Demat to SOA or Vice Versa?

Yes, but it needs paperwork.

• From SOA to Demat: Fill a Dematerialisation Request Form (DRF) with your DP (Depository Participant).
• From Demat to SOA: Fill a Rematerialisation Request Form (RRF) with your DP.

However, unless you have a strong reason (like consolidating or saving annual charges), converting is rarely needed. Be mindful that remat or demat may take time.

What Should You Do Now?

If you’re fine with your units in Demat and you actively invest in stocks too — Demat format might be convenient for you.

But if you don’t want Demat AMC charges and want flexibility to switch, invest, or redeem directly through AMC websites or MFU — SOA format is simpler.

Important: For many investors, SOA is the better choice — especially if you only invest in mutual funds and don’t trade stocks.

Key Takeaway from the Groww Incident

The Groww incident highlights one big lesson: Always check the mode of holding before investing.
Don’t assume your units are automatically in SOA format just because you are buying “direct” funds — if your platform is a broker, it may put units in Demat.

So, always read your broker’s communication, terms & conditions, and check your folios.

Final Thoughts

Your mutual fund investments are your hard-earned savings — so you must know exactly where they are kept.

Take 5 minutes today:

• Log in to your broker,
• Check your statements,
• Open myCAMS/KFinKart,
• Find out exactly where your units are sitting.

If you find you are unknowingly in Demat format and you don’t want that, consider your options — but always take help from a SEBI-registered advisor if you are confused.