The year 2012 was exceptional for personal finance. There were many changes in India and even worldwide which were focused on protecting consumer interest. Many more reforms are expected in 2013 which will impact your financial well-being.  So, it becomes necessary to make yourself aware and welcome new year by incorporating these in your personal finance decisions.

Here are few of such changes which were announced in 2012 and what it holds for consumers :

1. KYC– The rule for KYC changed in 2012. A uniform KYC for stock market & mutual funds got implemented which gave investors a sigh of relief. However, investors who have done their KYC in MF before 1^st January 2012 have to update it to accommodate the new process. So in 2013 you won’t have to duplicate the process if you want to open a demat account and wish to invest in mutual funds.

2. Mutual Funds– The investment was made more transparent and more investor friendly in 2012. Right from the capping on the cost to compliance from distributors, the objective was to protect small investor’s interest. From 1^st January 2013 a direct plan is being implemented with different NAV where the cost of investing will be less. It might suit investors who are able to taker financial decision themselves. On other side advisors regulations will make the advice more valuable if you are interested in paying for it. All these reforms will ensure you can invest in mutual funds with more conviction and reap the benefits. But do have the basic rules of investment intact and invest for your goals, not for returns.

3. Life Insurance: There were good changes in life insurance policies. The budget 2012 ensured policy issued after 1^st April 2012 has minimum 10 times base cover to be eligible for tax benefit on premium and maturity/death. In ULIPs the reduction in net yield as you go higher in term is capped now and you have to pay less on surrender based on the year of discontinuation and premium. Year 2103 will see a transformation in traditional products. More companies forayed in online term plans which will continue in 2013 and will benefit net savvy customers in getting the best deal. All these changes holds good when you will scount for insurance in 2013. But don’t repeat the mistakes and evaluate to buy insurance for the right objective.

4. Health Insurance: Year 2012 was best for health insurance seekers. There were new companies which entered into this arena with good features in their products and IRDA too made good changes for the ease of consumers. Health insurance was made available for elderly people and ensured that one can have it for lifelong. The reason of rejection will also be crystal clear to consumers now and claims settlement will be much smoother.  There were already few products in 2012 with these changes incorporated. Expect many new products in 2013 and there will be good enough choice for you to get the best deal.

5. Small Savings: There were not much changes here after small savings scheme were made market linked in 2011. There was only increase in interest rates. It was a good bonanza for investors liking NSC and SCSS as they were able to lock-in their investment with high interest rates. The market linked returns are here to stay  and will be good to what government does on 1^st April 2013. Nevertheless, PPF will still be a lucrative option and SCSS will continue to attract senior citizens. For rest of the schemes evaluate alternatives and then take a decision.

6. Tax Saving– Infrastructure bonds which were big attraction in 2011 were discontinued in Budget 2012. RGESS was introduced to get new investors in equity markets and will be available in 2013. Both are different avenues and will serve different investors but changes like these forces you to plan your tax saving every year.   Even life insurance taxation rules were changed which go to the extent of impacting the tax free amount received by nominee on death of policyholder or on maturity. Hence, it’s wiser to plan your tax savings in the beginning of financial year so that you do not have to strain your finances due to such changes.

Year 2013 is going to be exceptional as lot of real reforms will happen worldwide. We will not be left behind but it will surely change the approach towards your personal finance. If you missed planning in 2012 or it’s being a while you had a look at your finances, do it this year.

Happy New Year!!!!!