Invest In Tax Saving Mutual Funds Online
Analysts say debt fund appeal evergreen, current dip temporary
IF YOU are a risk-averse investor, debt funds must have been an attractive investment product. This is notwithstanding the fact that debt funds while carrying negligible risk have some charges associated with them. One often compares this with fixed deposits and one prime reason why one, in most cases, prefers debt funds to fixed deposits, is that debt funds are extremely tax efficient and give higher post-tax returns. These funds are particularly lucrative for people in the higher tax bracket. A debt fund, incidentally, is all but an investment pool like a mutual fund or an exchange-traded fund, in which core holdings are fixed income investments.
Debt funds may invest in short-term or long-term bonds, securitised products, money market instruments or floating rate debt.
The fee ratios on debt funds are on an average lower than equity funds because the overall management costs are lower.
The main investing objectives of a debt fund will usually be preservation of capital and generation of income. Performance against a benchmark is considered to be a secondary consideration to absolute return when investing in a debt fund.
Now the most pertinent question at this point of time is that if it is wise and advisable to invest in debt funds now and more so in the wake of recent RBI moves?
The free fall of rupee forced the apex bank to increase the interest on marginal standing facility (MSF) from 8.25 per cent to 10.25 per cent. This is the short term borrowing facility. This over and above the repo (rate at which funds are available from RBI), which is at 7.25 per cent. RBI has restricted the borrowing under repo to 1 per cent of the bank deposits. Also overnight borrowings for all banks put together, is restricted to Rs 75,000 crore.
And thanks to this move by RBI, debt investments are showing negative returns, wiping off gains seen in the last three months. Financial planners and advisers feel that investors at this point of time are left with two options: wait for market to stabilise, or make fresh investments to take advantage of low sentiments now prevailing.
"Debt funds' ever green appeal will not wane, for sure, but I foresee a temporary dip. Investors should look at FMPs (fixed maturity investments), as these tend to look in their portfolios. I strongly feel that actively-managed medium term debt funds may be avoided at the moment.
The market is too volatile.
One must keep watching RBI actions on a regular basis in this regard. The dollar-rupee exchange rate is also a big worry. Also, real returns will be down if high inflation continues
One must also keep in mind that liquidity of debt funds is very high. One can make redemption any day.
Usually, there are no charges for redemptions after one year. However, an exit load of 1 per cent is generally applicable if the fund is redeemed before one year. Besides, these funds are market linked and subject to interest rate and credit risks. However, chances of a default are very minimal and hence debts funds are practically safe and give positive returns, analysts think.
Happy Investing!!
We can help. Call 0 94 8300 8300 (India)
Leave your comment with mail ID and we will answer them
OR
You can write back to us at PrajnaCapital [at] Gmail [dot] Com
---------------------------------------------
Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.
Invest Tax Saving Mutual Funds Online
Tax Saving Mutual Funds Online
These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)
Download Tax Saving Mutual Fund Application Forms from all AMCs
Download Tax Saving Mutual Fund Applications
These Application Forms can be used for buying regular mutual funds also
Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )
- ICICI Prudential Tax Plan Invest Online
- HDFC TaxSaver Invest Online
- DSP BlackRock Tax Saver Fund Invest Online
- Reliance Tax Saver (ELSS) Fund Invest Online
- Birla Sun Life Tax Relief '96 Invest Online
- IDFC Tax Advantage (ELSS) Fund Invest Online
- SBI Magnum Tax Gain Scheme 1993 Invest Online
- Sundaram Tax Saver Invest Online
- Edelweiss ELSS Invest Online
Best Performing Mutual Funds
- Largecap Funds Invest Online
- DSP BlackRock Top 100 Fund
- ICICI Prudential Focused Blue Chip Fund
- Birla Sun Life Front Line Equity Fund
- Large and Midcap Funds Invest Online
- ICICI Prudential Dynamic Plan
- HDFC Top 200 Fund
- UTI Dividend Yield Fund
- Mid and SmallCap Funds Invest Online
- Reliance Equity Opportunities Fund
- DSP BlackRock Small & Midcap Fund
- Sundaram Select Midcap
- IDFC Premier Equity Fund
- Small and MicroCap Funds Invest Online
- DSP BlackRock MicroCap Fund
- Sector Funds Invest Online
- Reliance Banking Fund
- Reliance Banking Fund
- Tax Saver MutualFunds Invest Online
- ICICI Prudential Tax Plan
- HDFC Taxsaver
- DSP BlackRock Tax Saver Fund
- Reliance Tax Saver (ELSS) Fund
- Gold Mutual Funds Invest Online
- Relaince Gold Savings Fund
- ICICI Prudential Regular Gold Savings Fund
- HDFC Gold Fund
No comments:
Post a Comment