Invest In Tax Saving Mutual Funds Online
INVESTORS are gradually discovering that mutual funds offer better options of wealth creation over traditional investment opportunities. Take the case of the recent rally in gilt funds and income funds owing to decline in interest rates.
The former returned over 15 per cent over a year till May 31, while the latter returned almost 14 per cent (category returns). These funds (referred as duration funds) benefit when interest rates decline owing to the inverse relationship between yield (interest rates) and price (NAV). Further, funds with a longer maturity benefit more than those with a shorter maturity.
Traditional fixed income instruments on the other hand reduce their coupon when interest rates decline. This has seen many investors opting for debt mutual funds, against bank fixed deposits.
The following are the major benefits of debt mutual funds: Variety: They invest in a mix of fixed income securities covering different durations such as treasury bills, government securities, corporate bonds, money market instruments to name a few. Investors, thus, get the variety of investing across the debt spectrum through the mutual fund route.
Convenience:
They are professionally managed by expert fund managers and are available with a low ticket size across investment frequencies.
Liquidity:
All open-ended mutual funds allow withdrawal of money without any lock-in (subject to an exit load). While close ended mutual funds like fixed maturity plans have a specific maturity period, these are listed on stock exchanges to provide liquidity.
Diversification: Debt funds help to diversify an investor's portfolio across asset classes as they are relatively less volatile than equity and gold.
Tax efficiency:
Debt mutual funds are tax efficient compared with bank fixed deposits (See table above).
Indexation benefit: Indexation is an option available for investors to manage their inflation-adjusted returns. The Income-tax Act allows investors to use inflation as a tool to reduce their tax liability from income generated through debt mutual funds and bonds. The indexation benefit applies if such investments are held for more than 12 months. The same does not apply to bank fixed deposits and other small savings where the interest earned is taxed as per applicable marginal tax slabs of 10 per cent, 20 per cent and 30 per cent.
Duration vs credit opportunities:
Debt mutual funds provide investors an opportunity to benefit from the underlying interest rate scenario. For instance, when interest rates rise, short maturity funds offer better returns as they benefit from the rise in underlying rates; but when interest rates fall, long-term maturity funds and gilt funds benefit as the price of the underlying long term securities rise in this phase. Investors, thus, need to closely monitor the interest rate scenario to benefit from the movements in interest rates.
Besides duration funds, another category of funds investors can look at is credit opportunity funds -which try to gain from the higher yields offered by securities that are a notch lower in credit rating vis-àvis the highest-rated securities. One could thus benefit from higher returns from these funds by taking a marginally higher credit risk.
Debt mutual funds thus provide investors the choice of benefiting both from duration play and credit play.
As long as investors are associated with a qualified independent financial adviser (IFA) and distributors, they will have access to good advice that will enable them to invest correctly. Today, advisers are well educated and have scientific methods towards investment. Our advice is that the investor should talk to their financial adviser, understand his/her risk profile and requirements and accordingly take appropriate risks that suit their profile.
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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
