OCTOBER 2022 | VOL. 17
THE
ORANGE
BOOK
Leverage your FINANCIAL QUOTIENT
Welcome happiness this
festive season
Enjoy festive shopping, but with care
Festivals are time for meeting family and friends, enjoying delicious treats and
shopping for delightful things – new clothes, new furniture, maybe even a new
car! However, there are some cognitive biases that make us overspend beyond
our budget. Let’s know more about them.
1. Anchoring Effect: Holding on to the first piece of
information we get
Whoa! ₹5,000
discounted to ₹3,000!
What a steal deal!
I must buy it!
But Rahul, it’s
STILL above our
budget of ₹2,000!
Some ways of not falling prey to this bias are:
Stay firm to your budget
Remind yourself of the other festive spends you need to do and think of
all the things you can buy/do with the extra money you’d have spent on
the outfit.
OCTOBER 2022 | VOL.17
2. Bandwagon Effect: Following the Majority
This psychological bias means that we tend to do something because most
people around us are doing it, even if it is not aligned to our plans or goes
beyond our guardrails.
Mom! I want a
XYX Box
gaming console
as a gift. ALL
my friends are
getting them!
But Vivaan, it
costs ₹45,000–
and you don’t
even like gaming!
Some ways of not falling prey
to this bias are:
Delay the purchase and
take a pause to think
whether you really want
the object you want to buy
Remind yourself of what
you really like and had
planned to buy, e.g. a new
racing bike rather than a
gaming console.
OCTOBER 2022 | VOL.17
3. Decoy Effect
Retailers use this effect to persuade us to purchase items that are more
profitable to them by introducing a ‘decoy’ that makes a more expensive item
appear a more reasonable purchase.
NewPhone Alpha
Turbo
NewPhone Alpha
STORAGE
NewPhone Alpha
Turbo Zoom
128GB
128GB
256GB
₹22,000
₹25,000
₹28,000
TOUCH ID
TURBO
CHARGE
PRICE
From the above options, most buyers will
ignore the leftmost basic model because it is
“lesser” in almost every way when compared
with the middle model, except the price- and
the price difference is just ₹3,000.
And now that they are already considering
buying the more advanced model, it seems
silly not to go for twice the storage for "only"
₹3,000/- more. Thus, the middle version is
the decoy introduced by the phone company
to get customers to buy the highest end
phone.
OCTOBER 2022 | VOL.17
You can even see this in
movie theatres. When you
go for a movie during the
festive holidays, check
how the popcorn is priced
and you will know how the
decoy effect works!
Some ways of not falling prey to this bias are:
Make a wishlist of parameters you want in your wishlisted item and divide
them into 2 categories: those which are mandatory, and those which are
optional. Stick to the list of mandatory requirements while finalising an
option
Set an upper limit on the amount you are willing to pay for the optional
requirements, and ensure you don’t cross it.
However, let us remember that being too vigilant about spending
money can deprive us from giving joy to our loved ones as well as
to ourselves and balance is always the key.
OCTOBER 2022 | VOL.17
Festive Bonanza: Marquee Offers
Here are some of our top offers from Festive Bonanza, hand-picked for you
to add sparkle to the festive season!
Up to
`10,000 discount
on minimum purchase
of `50,000.�������
Buy iPhone 14,
starting at
`2,497 per month.
Offer Valid on Credit Cards
Valid till: December 31, 2022
Get
10% cashback
up to `4,000/- on
minimum billing of `10,000/for purchase made on
www.luxe.ajio.com.
Offer Valid on Credit & Debit Cards*
Offer Period: October 20 to 26, 2022
To check out more
such exciting offers,
CLICK HERE
Offer Valid on Credit Cards*
Valid till: November 30, 2022
*Not valid on Amazon Pay ICICI Bank Credit Card
T&Cs�
Get
25% discount
on orders above `1,500
(excluding taxes).
Offer Valid on Credit & Debit Cards
Valid till: December 31, 2022
OCTOBER 2022 | VOL.17
Get
Get
10% cashback
10% cashback
up to `4,000 on minimum
up to `4,000 on minimum
purchase of `15,000/-����������������������������������������
purchase of `15,000/Offer Valid on Credit Cards*
Valid till: November 30, 2022
Get
10% cashback
up to `4,000 on minimum
billing of `15,000/-
Offer Valid on Credit Cards*
Valid till: November 30, 2022
To check out more
such exciting offers,
CLICK HERE
Offer Valid on Credit Cards*
Valid till: November 30, 2022
*Not valid on Amazon Pay ICICI Bank Credit Card
T&Cs
Get
10% cashback
up to `4,000 on minimum
purchase of `15,000/Offer Valid on Credit Cards*
Valid till: November 30, 2022
OCTOBER 2022 | VOL.17
8 things to do before buying your dream
car using a car loan this festive season
Many of us choose the festive season as the perfect time to buy our dream
car. Car manufacturers and dealers also often have great offers at this time.
So for all of you looking at buying a new car this festive season, here is your
checklist of 8 things to do before you buy your dream car!
Choose your
Loan Tenure
and type of
interest rate
Search,
compare &
select a car
Customise
your EMIs
Check whether
you have a
pre-approved
loan offer from
your financier
Check for
other fees
and charges
Check if instant
sanction/
disbursement is
available
Check
loan-servicing
service post
disbursement
Know/ Assess
the % of Loan To
Value (LTV)
OCTOBER 2022 | VOL.17
1. Search, compare and select a car
Car Buying Process
Car Body Style
(Hatchback, SUV,
MUV, Sedan etc.)
Choice of Engine
(Petrol/Diesel/
EV/CNG) &
Transmission (AT/MT)
Buying Power/
Affordability/ Cost
of Ownership
Smart & Convenient
attributes in Car
Aftersales Service
(Dealer Network/
Service Centres)
New Launches
Car Brand Value ,
Reviews & References
(Brand Reliability &
Innovations)
Primary
Attributes
Present Car Condition
e.g. Kilometres Driven,
Accidental History etc.
Warranty &
Certified Car
Resale Value (For
future Car Upgrade)
After Sales Support
Additional attributes
for buying used cars
Verify the authenticity
/title of Registration
Certificate, NOC etc
Easy access to
Finance
Fair Valuation
Dealer Reputation
OCTOBER 2022 | VOL.17
2. Check if you have a Pre-approved Car Loan offer
with your bank /financier
Avail a Car
Loan from
Branches of
Banks/ Other
Financiers
Digital Loan
Sanction from
Financier
Website
Authorised
Manufacturer
Dealerships
Organised
Startups for
Used Car Loans
3. Know/ Assess the % of Loan to Value (LTV)
Higher the % of LTV, lower is the down payment
Additional Funding – Check with your bank/ financier if they also
offer loan on any add-ons like genuine accessories &
manufacturer-backed AMC and service packages over and above the
on-road car price.
4. Choose your Loan Tenure and type
of interest rate
Longer the tenure, lower the EMI
Maximum Loan Tenure: 8 years
For used cars: Loan is provided till
age of car reaches 12 years
Rate of Interest: Fixed (constant
for whole loan tenure) or Floating
(changes as per benchmark rate).
OCTOBER 2022 | VOL.17
5. Customise your EMIs
Standard
Most common repayment method - Equated
installments throughout the loan tenure.
Graded
Non-equated installments across loan tenure Generally reduces monthly EMI obligations.
Balloon/ Bullet
Balloon: Borrowers are to make
lump sum payments towards the
end of repayment tenure
Bullet: Borrowers are to make
Step-up
Initial EMI is low and increases
annually - Best suited for
borrowers who expect income to
increase annually.
lump sum payments towards the
end of every year.
OCTOBER 2022 | VOL.17
6. Check if instant sanction/disbursement is available
Servicing Time – Quick Loan Sanction allowing swift delivery of the
dream car
Documentation requisites – Minimal documentation making it a hassle
free loan proceedings
Dealer Disbursement – End to end Digital Customer Journey & financing
with opportunity to avail loan disbursement easily and conveniently from
the comfort of home, office or any remote location.
7. Check for other fees and charges
Foreclosure &/or Part Pre-payment charges
Processing fee & other charges
Check for other charges as on financier website.
8. Check loan-servicing service
post disbursement
Ease of obtaining Statement of Accounts,
Foreclosure Statements, No Objection
Certificate etc.
13.45
Your
Loan Account
Home Loan
Number of branches and proximity of
branches
Car Loan
Dispute and grievance redressal mechanism
Personal Loan
Digital access to loan account.
Statement
OCTOBER 2022 | VOL.17
How Jini brought sparkle to the festive
season without burning a hole in her
savings!
Jini had started
working at her first
job just a few months
ago and was eager to
shop for exciting
festive gifts for
family and friends
with her own money.
Unfortunately, her savings
were not enough to buy all
the exciting gifts she
wanted. This is a setback
many of us have faced at
some point in life.
Account Balance: `66,000.00
Insufficient Funds Available.
Luckily, due to the power of Consumer Financing at No Cost EMI, we can
now purchase consumer durables that seem ‘out of budget’ but can be
purchased without worrying about the down-payment & huge lump-sum
costs. So let’s know a bit more about Consumer Financing.�
OCTOBER 2022 | VOL.17
Type of No Cost EMI
offered by ICICI Bank
Credit Card EMI
Where can it
be used?
Offline (stores)
Online*
(ecommerce).
Debit Card EMI
Offline (stores)
Online*
(ecommerce).
Cardless EMI
Offline (stores)
Online*
(ecommerce).
Consumer EMI @
Point of Sale
Offline**.
How does it work?
Requirements
You can convert the
purchase transaction
amount to EMI
during or after the
transaction.
You need to have
an ICICI Bank
Credit Card.
You can convert the
purchase transaction
amount to EMI only
during the transaction.
You need to have
an ICICI Bank
Debit Card.
No need to carry
a Credit or Debit
Card
You need to be a preapproved customer
of the bank
Simple OTP-based
authentication
process.
You can avail EMI only
within available limit.
Walk in to any
physical store which
has an ICICI Bank
representative
EMI can be availed
based on previous
credit history and
CIBIL report.
Avail of EMI by
speaking with the
representative
Can be availed only at
physical stores
(Paper-based process
& NACH Mandate)
KYC is done through
Standard Government
documents.
* No paper work involved in the journey, complete digital process
**Paper documentation involved, Sales Representatives help in the process
OCTOBER 2022 | VOL.17
A festive take on investing in equities
directly Vs Equity Mutual Funds*
One of the most popular
festive sweet dishes across
the country is undoubtedly the
Gulab Jamun. While some of
us make them painstakingly
from scratch, others prefer
outsourcing the task to the
expert professionals and
buying them ready-made.
And, in keeping with the
festive spirit, we can extend
the same analogy to equity
investing as well!
Investing in equities directly = Making Gulab Jamun at home from scratch
Need
Managing an equity portfolio
Making Gulab Jamuns at home
Knowledge about the
companies and sectors
Knowledge about the
ingredients and the recipe
Time
Time
Resources
Ingredients
Inclination
Inclination
Investing in equity MFs* = Buying Gulab Jamun readymade
Need
Investing in Equity Mutual Funds*
Buying Gulab Jamuns from a
sweetshop
Little to no knowledge
No Knowledge
Less Time
No Time
Fund Management Charges
Higher Price to be paid
*ICICI Bank Limited is a AMFI Registered Mutual Fund Distributor. Mutual Fund investments are subject
to market risk. Read all scheme related documents carefully. T&C Apply.
OCTOBER 2022 | VOL.17
Who may want to invest in Equities directly?
Investors who have developed expertise in securities market should consider
investing directly in stocks, as managing an equity portfolio needs time,
knowledge, resources and inclination.
Time
Fundamental & Technical Analysis
Knowledge & Experience
Tracking market developments
Reading Balance Sheet and P&L A/C
Regular monitoring of the portfolio
Interpretation of Fundamental
analysis & technical charts
Risk & Valuation ratios
Inclination
Regular monitoring
Resources
Stock as well as market level
developments
Access to company specific
financial reports
Review & rebalancing or regular
intervals
Software for technical charts
OCTOBER 2022 | VOL.17
Who may want to invest in Equity Mutual Funds*?
Beginners or those who do not have adequate time or willingness to devote
time to this activity may find investing in equities through mutual funds more
convenient.
Beginners
Build long term wealth
Managed by professional Fund Managers
Backed by the research team
Diversification
Tax Efficiency**
Tax saving u/s 80C for ELSS Funds
Administration
Easy & convenient administration
Lesser time and expertise needed
No daily tracking is needed
Tax efficient structure
Some of the benefits of investing in Mutual Funds over direct equity are:
Professional management of funds
Portfolio diversification
Convenient administration
Tax advantage
*ICICI Bank Limited is a AMFI Registered Mutual Fund Distributor. Mutual Fund investments are subject to
market risk. Read all scheme related documents carefully. T&C Apply.
**Tax Benefits are subject to amendments in tax laws from time to time.
The material in this document is derived from sources ICICI Bank believes to be reliable but which have not
been independently verified. In preparing this document, ICICI Bank has relied upon the information available
from public sources and claims no ownership of the same. ICICI Bank makes no guarantee of the accuracy and
completeness of factual or analytical data and is not responsible for errors of transmission or reception and
hereby disclaim any liability with regard to the same.
OCTOBER 2022 | VOL.17
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OCTOBER 2022 | VOL.17