A lot of this would be geared towards Indian banks and the Indian financial ecosystem.


Understanding how we lose accumulated value over time, and how to prevent it is critical to long term growth.


Inflation: Inflation is a general increase in the prices of goods and services in an economy (wikipedia)

Understanding inflation is fundamental before we proceed. Assume you could buy all your necessitates today for ₹100, if the inflation of india is at 5%, that means that the same set of goods will be costing you ₹105 next year.

Which means

  • If you did not get a hike from last year to this year, you are theoretically working for cheaper
  • Money sitting in the Safe box is actually losing value over time
  • If your bank account gives a return of 3% while the rate of inflation is around 5. Then you are still losing money overtime

So to actually increase value over time (not money, since money itself is not an accurate representation of value) you would need to invest in a financial instrument whose returns are higher than inflation.


Taxes are the amount you pay to the government so that the government can share amenities back to the public. The sad part is that the tax paying group in India is extremely small.

The higher earning & salaried segment end up paying a lot of taxes. If you are in the “>15 lakhs per year” earning category, then the tax is pretty much 30% flat.

3 months out of the 12 months you work in an year is for the government

For any investment, it can be taxed at two distinct places.

  • On the investment (Principle investment)
  • On the interest/gains earned

Let us say for suppose a person had invested 10k in mutual funds. And the style of the fund is in the IDCW (formerly called dividends) plan. Which means he/she will get back the dividends to the account instead of it going back into the fund and compounding. Let us say he/she earned 1k in gains for a given year. This would mean that the income tax slab applies on the capital gains too.

There are also taxes to central government (CGST) & state government (SGST) which are paid on what you buy & use. For example: road tax, water tax, professional tax etc.. Which cannot be avoided.

Remember that the effective interest rate of an investment should be calculated post tax deductions, an interest rate of 6% is actually 4.2% post 30% taxation.

Financial instruments for investing

Financial instrumentPrinciple investmentCapital GainsApprox. Average returns (as of Aug 2022)Liquidity aspectInterest type, frequency
Public Provident FundExempt (Section 80C limit)ExemptPartial withdrawalAccrual, half yearly
National savings certificatesExempt (Section 80C limit)~6.8No liquidityAccrual, half yearly
National pension systemExempt (Section 80CCD limit)ExemptMarket ratePartial withdrawal after certian period
General Provident FundExempt (Section 80C limit)8.10%Partial withdrawalAccrual, half yearly
Tax free bondsExemptIssue rate (5-8%)Through stock marketTo account, Yearly payment
Bank Fixed Deposits5-7%On demandAccrual/(Monthly
Bank Tax saverExempt (Section 80C limit)5-8%After completion of 5 yearsAccrual/(Monthly
Mutual fundsstock market drivenOn demand
ELSS mutual fundsExempt (Section 80C limit)stock market drivenAfter 3 years, computed from buy date
Equitystock market drivenOn demand
RBI bonds7% (NSE + 0.35%)7 years, half yearly interest payment to bank accountTo account, half yearly payment
Real Estate Investment Trust (REIT) units90% of the surplus income distributed as dividend every quarterOn demand through stock exchangeTo account, quaterly dividend
Housing loanExempt (Section 80C limit)Exempt (Upto 2.5 lakhs)
InsuranceExempt (Section 80C limit)
Corparate fixed deposits7-8%No liquidity until tenureAccrual or monthly/quaterly

Personal Finance Setup

I currently use

  • HDFC account as my primary account
  • PhonePe for all the UPI transactions
  • Zerodha Kite/Coin for Stocks/Mutual funds
  • Amazon pay credit card (very rarely, since there is usually a 5% discount in amazon if this is used)

I’ve been experimenting with a Double entry ledger system called Beancount. It’s a beautifully designed software which works out of plain text files.

The csv bank statements are downloaded and imported into beancount using a HDFC bank statement importer I’ve written for myself. It uses keywords in the narration to classify transactions.

I wish life was easier for personal finance management and data exports in general. The state of personal data & infrastructure is sad.

Bank feature matrix

For data interoperability, I would like some basic features around data. Ideally having APIs would be awesome, but we currently do not have APIs for any Indian banks.

Bank Name / featureTabular transactions statement (CSV or Excel)UPI remark in narrationInstant virtual card on account creationUnique transaction reference number in bank statement
DBSYes, 90 days per download & of 18 months in the past. CSV is actually an excel file with wrong file ext.No??
HDFC bankYes, can download excel year by year. For the last 5 years.Yes?Yes
Union bankYes, can download excel year on year. Does not seem like there is cap for the pastNo??
Fi BankNo, only PDFYesYes?
JupiterNo, only PDFYesYes?

This is a sample, if you feel like there needs to be more features in the matrix. Ping me and we will talk.


  • Whenever making transactions in UPI, make sure you have some notes in the corresponding UPI app. This will later show up in the bank statement. Otherwise, the bank statement narration would be unrecognizable, you wouldn’t want Transferred 500 to 12412234141, the same narration would show up as Transferred to 12412234141, food if there was a comment. Using tags is a good idea if you want to parse it later. Note that all banks do not do this, refer to the feature matrix above.
  • There does not seem to be a way to look up UPI IDs in the bank statement
  • Subscriptions tend to add-up pretty quickly if not carefully looked into. Make sure all of this is being budgeted.
  • Try to buy things only after having a plan to give away / sell the other thing in hand. Do not hold multiple of the same type. For example, if you are planning to buy a new phone, exchange the current one to get the new one.