Crisis Management

Everybody needs money. Some times in crucial and critical situations we need money very urgently. such situations arise at a very short notices, like urgent operation. Often in such cases availability of funds involves some cost, because of urgency, lack of resource utilization. I am presenting my readings and knowledge on how one can get these funds at lowest possible cost, below is the list in order of their priority.

1. Use of ATM/Debit cards,

This is the most simple way and its least cost instrument as its your own money. It is important to keep money in three to four ATM accounts, these days we are getting ATM card from every reputed bank. It is good idea to keep some backup money in one or two Bank ATM, so that in crisis one can run to nearest ATM. Also some banks have daily withdrawal limit so good idea to keep money in three to four ATM banks. One can think of taking money with credit card also, but this will be costly option as it involves heavy interest charges.

2 . Sell Stocks

Sell the stocks selectively, as stocks are liquid in nature, This option involves risk of earning appreciation, If you are lucky and have earned appreciation over your stock, this can be another good option. It involves settlement period, settlement period is generally T+2 days means, money will be credited in your account on third day of transaction.

3. Gold assets

Sell gold assets or gold ornaments. There is also option of borrowing against gold which is not good idea as interest over such instrument is more.

4. loan Against shares, mutual funds and property

Most of the bank offers loan against shares and mutual funds. This instrument is involves quite procedural and paper work. It can be considered as good option against other loans like personal loan or loan against credit card as it is a secured loan.

Loan against property considers market valuation of property. Depending on market valuation one can get loan.

5. Loan against Provident fund

I was not aware of this loan but its good that this option is also available. Loan against PPF is possible; Loan against PPF can be availed after 3 years at a concessional interest rate of 12%. However, amount of loan cannot exceed 25% of credit at the end of second year.

Check out amount of loan that you can take against your PPF Account

from ICICI direct.com :: Personal Finance http://content.icicidirect.com/Personalfinance/PPFLoan.asp

However this option will disturb your retirement planning.

Please add on your views and options which i missed here.