Skip to main content

Debt Mutual Funds

Tax Saving Mutual Funds Online

Current open Infra Bond Application form

In the last one-and-a half years, whenever financial planners were asked about investing in debt funds, the advice was — stay short. That is, invest in short-term debt funds. Things have changed significantly since the last fortnight, when the Reserve Bank of India indicated a halt in rate increases. Rates could now fall in the months to come.

As a result, market experts are happy advising long-term debt funds. We believe policy rates have peaked. It makes sense for investors to increase allocation towards longer duration funds. Investors can consider investments for horizons ranging from one to three years. And, for this, they can consider various types of funds — income funds, gilt funds or even dynamic bond funds —depending on their risk appetite.

If you have a horizon of 12-18 months, you should look at long-term income funds or gilt funds. Chiefly because, with these funds, one can get the advantage of high coupon rates and capital appreciation once the rates start falling.

Gilt funds are usually preferred by risk-averse investors, as these invest only in government securities. These are typically free of credit risk. Gilt funds offer tenures ranging from 9-18 months. However, the low risk will garner low returns as well. This category has given a pre-tax return of six per cent over the past year ended December 30, 2011, according to Value Research, an online portal comparing mutual funds.

Comparatively, income funds have returned 8.3 per cent annually. Dynamic bond funds have given higher returns, with average annual returns at nine per cent. The category's top performers, SBI Dynamic Bond and IDFC Dynamic Bond have even given returns of 11 per cent.

Dynamic bond funds are a good bet, as they are actively managed by the fund manager. He can take a view on the market and alter his holdings regularly, choosing from corporate and government papers.

However, such high involvement of the fund manager can even prove a double-edged sword. Reason: the funds performance is largely dependent on the fund managers ability to take the right calls. A slightly longer holding period of one three years is recommended for this category.

Many may argue that with fixed deposits (FDs) giving assured annual returns of 9.25 per cent for a period of one-10 years, these score over debt MFs. However, these returns, when compared on a post-tax basis, wont seem as attractive, especially for tenures exceeding a year. The recent NHAI bonds offering 8.3 per cent for 15 years has also caught the fancy of investors.

FD returns are taxed entirely at slab rates. In case of debt funds, long-term capital gains (for holding over one year at the time of sale), will be taxed at 10 per cent without indexation or 20 per cent with indexation.

If you sell your investment within a year, the capital gains are added to income and taxed according to the slab applicable. However, you can choose the dividend distribution tax to circumvent this.

Here, you will be given the dividend, net of a dividend distribution tax of 14 per cent (borne by the fund house).

Remember, though, that the shadow of uncertainty looms large. Financial planners opine the rate cut has only been hinted at and not begun. Investors must, therefore, move from short- to medium-term debt funds to long-term ones, gradually and in tranches.

 

 

---------------------------------------------

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 )

  1. HDFC TaxSaver
  2. ICICI Prudential Tax Plan
  3. DSP BlackRock Tax Saver Fund
  4. Birla Sun Life Tax Relief '96
  5. Reliance Tax Saver (ELSS) Fund
  6. IDFC Tax Advantage (ELSS) Fund
  7. SBI Magnum Tax Gain Scheme 1993
  8. Sundaram Tax Saver

---------------------------------------------

Application form for Tax Saving Infrastructure Bond and more information

Current open Infra Bond Application form

 

Submit filled up application    Collection canter near you

Popular posts from this blog

Group Health Insurance

Buy Group Health Insurance Online   For Human Resources, the biggest challenge today is to decide whether medical benefits should be offered to employees or not, what type of plans should be offered, what will be the cost and how will the cost be split between employees and employer. Well, most of these are subjective and would depend on a lot of factors including company size, average employee salary, etc. However, this article will give you a fair idea on how you should go about deciding these factors: 1. Why offer group health insurance benefit to employees : Studies have proved that retention rates among employers offering GHI are much higher than the ones who are not offering. Moreover, the cost of providing this benefit as a percentage of salary is very low as compared to the perceived value. As an example, say if average salary of an employee in your organization is 4 LPA. If you decide to offer a health insurance benefit to him for a Sum insured of ...
Read more

ICICI Prudential Dynamic Plan Invest Online

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   ICICI Prudential Dynamic Plan             Invest Online This fund does remarkably well during falling markets, but fails to show the same prowess during a rising market. The fund sticks to its mandate to adapt to the dynamic nature of the market by shuttling between debt and equity. It takes aggressive asset calls in equity when the market surges by investing in quality mid-cap stocks. At the same time, it adopts a defensive strategy by investing in debt and cash when markets get overvalued, making it a good long-term choice.     For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call     Leave a missed Call on 94 8300 8300   Leave your comment with mail ID and we will ...
Read more

SBI MAGNUM MIDCAP ONLINE

Invest SBI MAGNUM MIDCAP ONLINE   SBI MAGNUM MIDCAP fund didn't fare well in its initial years but, in recent years, has steadily improved its performance under the capable hands of its current fund manager. Although investing predominantly in mid-cap stocks, the average market capitalisation of its portfolio is lower than other category peers.   Although the stock selection approach is mostly bottom-up , the fund manager doesn't shy away from taking bold sector bets , as is reflected in its large exposure to the healthcare sector. She is equally adept at handling performance across market cycles--the fund has captured more of the upside during market upticks and contained the downside during downturns in a better manner than its peers.   Given its superior risk-reward equation, the fund is a worthy pick in its category.     ----------------------------------------------- Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing EL...
Read more

Birla Sun Life MIP II Savings 5

  Birla Sun Life MIP II Savings 5 - Invest Online   Have you traditionally been a debt investor but now wish to test waters in equities? Then, debt-oriented funds such as Birla Sun Life MIP II Savings 5 (Birla Savings 5), which have limited exposure to equities, may fit your requirement. With a five year return of 10.5 per cent compounded annually, the fund managed a good 3-3.5 percentage points more than its benchmark Crisil MIP Blended Index, as well as its category average. The fund appears well poised to capitalise on a falling interest rate scenario and has increased the average portfolio duration of its debt instruments in recent times. Suitability Birla Savings 5 is suitable only for conservative investors. If you want to make a beginning in equities and cannot take any short-term declines in your stride, then this fund will suit you. If you are already an equity investor and want to use a debt-oriented fund merely as a diversifier, then you may prefer peers from the HDFC and Re...
Read more

Lump Sum or SIP?

Invest Mutual Fund Online     You have a lump sum in hand and you wish to invest in equity funds. However, you have heard a lot of talk about investing in equity funds through Systematic Investment Plans (SIPs) because they help average costs, ensure you do not ill-time the market, and help you invest in small sums, besides giving you many other advantages. So, should you invest the money you have in hand in one go, or let it remain in your bank account and then do an SIP? There is no harm in investing a lump sum amount. For all you know, compounding, over the long term, could work better with lump sum. However, make sure you fulfill all of these three criteria if you want to invest in one go. Else, SIP is the way to go. #1: You invest for the long term According to past data, ideally, if you have a time frame of 12 years or more, you can consider lump sum investing (provided you satisfy the other two conditions that follow). So, what is the sanctity behind 12 years? Is it because only...
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now