Is the interest received on bonds invested in my name mine?
My husband has invested some money in RBI tax-free bonds in my name. The interest comes into my savings bank account. My husband is declaring the interest income in his income tax return. Is the amount of interest received as well as interest on interest my money? Secondly, on maturity, what happens to the principal amount? Does it remain with me as my asset?
Mrs Indra Jogindar Sud, by e-mail

Even though the bonds have been bought in your name, in order for it to "belong" to you, there has to be a valid consideration. That is, you must have "earned" the bonds for services offered to your husband or his firm. In all other cases, the income and the investment in the bond has to be clubbed with your husband's income and wealth. It is therefore correct for your husband to take the income in his tax return. On maturity, the bonds will be part of his net assets and not yours.

How Much Loan Can I Take For My Education?
I have just finished my MBBS and would like to study further for MD. However, my parents do not have any more money to spend on my education. I would like to know the maximum amount of loan that I can draw from a bank towards my education. What would be the maximum time period and what would be the liabilities? I have a good academic record. I have no cash or assets in my name.
Sona, UP

Many banks offer educational loans. You don't need any assets to take this loan. The bank will check your academic credentials and assess your earning capability once you complete your education, and give you a loan on that basis. The loan usually covers most costs of education, including fees, books and hostel expenses. The bank will pay all your bills and you return the loan after you finish your studies.

Each bank has a policy of how much of the cost of education it will cover (this ranges from 75 per cent to 95 per cent) and how much the loan would be (this ranges from Rs 25,000 to six lakhs). The loan is repayable in instalments over a period of three-five years, after you have completed your education. In many cases, repayment starts after a cool-off period of six months after your education is complete.

Educational loans require guarantors. Perhaps your parents can stand as guarantors. They don't have to pay anything, but will agree to take the liability if you fail to pay. The interest rates vary from 10 per cent to 13 per cent. Please check with a few banks to get their terms and choose the one that suits you best. Make sure that servicing is good, and that your bills will be paid by them on time.

What Is The Use Of Buying MIPs?
My investment advisor has been suggesting that I buy some MIPs of mutual funds. If there is no assured return every month, what is the use of buying this product?
Lakshmi, Chennai

The modern MIPs of mutual funds do not have any assured returns. They are not permitted by regulations to make any such assurance. But many of them, like the Pru-ICICI MIP for example, provide a stable and regular level of income. A MIP generates most of the income from bonds and also has a small exposure in equity markets. To those investors who like the benefits of equity, but also like a stable level of income, a MIP is an ideal product.