Skip to main content

You can Redeem Liquid Funds Instantly

 





Liquid funds with instant redemption facility offer investors a clear advantage over bank FDs.

Interest rates on bank fixed deposits are likely to fall further because of the surplus liquid ity that's been pumped into the system after the demonetisation exercise. Liquid and ultra short-term funds have emerged as a more viable alternative for parking the excess cash lying in bank savings accounts. These funds offer a much higher yield for investors.

However, while bank fixed deposits (FD) offer instant liquidity to investors, liquid funds, until recently, took at least one business day to return investors' money.This has changed recently, with two prominent fund houses--Reliance Mutual Fund and DSP BlackRock Mutual Fund--offering instant redemption facility on their liquid funds.


Both these ultra-short term schemes, allow investors to withdraw their money any time by placing a redemption request and the money is credited to the investor's bank account instantaneously. Investors can redeem up to 95% of the amount in their account, subject to a maximum of `2 lakh per day. The minimum withdrawal amount is `500 for Reliance Money Manager and `100 for DSP BlackRock Money Manager Fund. While other fund houses are expected to follow suit, the market watchdog, Securities and Exchange Board of India (Sebi), is reportedly exploring the option of making instant withdrawals, subject to certain caps, mandatory for liquid funds.


Reliance mutual fund also offers Any Time Money Card--an ATM cum debit card--which offers easy accessibility to money parked in its liquid schemes through Visa-enabled ATMs. Investors can withdraw upto 50% of their corpus in the scheme, or `50,000 per day, whichever is less. It also doubles up as a debit card, where investors can spend upto 50% of the corpus or `1 lakh, per day. This facility has been extended to investors of Reliance Liquid Fund--treasury and cash plans--and Reliance Money Manager Fund.


The added benefit of easy liquidity makes liquid funds a better alternative to both savings bank account and bank FDs. "With instant redemption facility, liquid funds now carry a distinct advantage over the traditional savings avenues.They are particularly useful for those with a large balance in their savings accounts, which is highly tax inefficient for interest income in excess of `10,000. Even a sweep-in fixed deposit facility--where funds can be transferred between savings bank and fixed deposits--would yield sub-optimal returns compared to Investing money in a liquid fund.


Liquid funds are essentially very low-risk funds, investing in highly liquid money market instruments with a residual maturity of not more than 91 days. As such, the volatility in these instruments is very low. Liquid funds have delivered around 7.6% over the past one year.Since these are debt funds, gains are taxed in accordance with one's income tax slab, if held for less than three years. Assuming a 7.5% return on liquid funds, after-tax returns work out to be 6.8%, 6% and 5.3% respectively for individuals in the 10, 20 and 30% tax bracket. This currently works out higher than the after-tax return from bank fixed deposits.







------------------------------------------
Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds

Top 4 Tax Saver Mutual Funds for 2017

Best 4 ELSS Mutual Funds to invest in India for 2017

1. DSP BlackRock Tax Saver Fund

2. Invesco India Tax Plan

3. Tata India Tax Savings Fund

4. BNP Paribas Long Term Equity Fund



Invest in Best Performing 2017 Tax Saver Mutual Funds Online

Invest Best Tax Saver Mutual Funds Online

Download Top Tax Saver Mutual Funds Application Forms


For further information contact Prajna Capital on 94 8300 8300

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

Leave your comment with mail ID and we will answer them

OR

You can write to us at

PrajnaCapital [at] Gmail [dot] Com

OR

Call us on 94 8300 8300

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

 

Popular posts from this blog

What is Electronic Clearing Service (ECS)?

  As the name suggests, it's an electronic process through which money can be transferred from one bank account to another. According to RBI, this mode is usually used for regular payments and receipts, like distribution of dividend, interest, salary, pension etc. This mode is also used for collection of bills for telephone, electricity, water, various types of taxes, payment of EMIs , investments in mutual funds , payment of insurance premium etc. There are two types of ECS , like most other banking transactions, ECS credit and ECS debit. An ECS credit is used by a bank account holder , usually a large company or an institution for services like payment of dividend, in terest, salary, pension etc. If your mutual fund pays you dividend to your bank account, of all probability it is being paid through ECS credit.ECS debit, on the other hand, is used when a company or an institution is getting money from a large number of people. For example if you are investing in a mutual fund sc...
Read more

WEALTH TAX

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 WEALTH TAX   WHAT CONSTITUTES WEALTH? For wealth tax purposes, "wealth" means property , urban land, car, jewellery , yacht, boat, aircraft and cash in hand in excess of Rs 50,000. CAUTION POINT | Do not think you will have an easy escape from wealth tax by transferring your `wealth' without consideration to your spouse or minor child. Such assets will also be considered as your wealth. HOW TO DETERMINE YOUR TAXABLE WEALTH Add the taxable value of the above assets (computed as per the detailed rules for valuation) owned by you as on March 31 (for FY 2014-15, it will be March 31, 2015). In case you sold your car during the year, it will not be taxable wealth. Deduct loans if any obtained by you to acquire any of the taxable assets from the value of gross tax out for at least 300 days in a...
Read more

Equity Savings Fund

Invest Equity Savings Fund Online   The best part about these funds is that they are subject to equity fund taxation and at the same time are structured like MIP like funds . This new category, equity savings funds , offer a little of everything. They allocate money to equities & equity related instruments, and fixed income. They aim to generate returns by diversification. Such funds invest in fixed income and arbitrage to protect the investors from short term volatility and equity for capital gains. The best part of these funds is that they are subject to equity fund taxation and at the same time are structured like MIP funds.   MIP funds however are subject to debt fund taxation. Investors Equity savings funds are suitable for the following: First time investors who seek partial exposure to equity with less volatility and greater stability Investors seeking moderate capital appreciation with relatively lower risk Those wh...
Read more

8% Government of India Bonds quick guide

For those seeking comfort in safety of returns, the Government of India issued 8% savings bond once again comes to the fore. First launched in 2003, these bonds are issued by the government with a maturity of 6 years. The bonds are available at all times with specified distributors through whom you can apply to invest in them. Here is a quick guide to what the bond offers and its features to ascertain to check for suitability. What are Government of India bonds Government of India bonds are like any other government bonds with specified rate of interest. The rate is fixed at 8% per annum paid half yearly, or you can opt for cumulative payment of interest at the end of the tenure. You can buy these bonds from State Bank of India and its associates, other nationalized banks and some private sector banks such as HDFC Bank Ltd and ICICI Bank Ltd, among others. The bonds can be bought from the offices of Stock Holding Corporation of India as well. They are available in physical form onl...
Read more

Tax on Kisan Vikas Patra Returns

  Taxation of Kisan Vikas Patra The interest earned on Kisan Vikas Patra (KVP) doesn't enjoy any tax exemption   The interest earned on Kisan Vikas Patra (KVP) doesn't enjoy any tax exemptions. The interest earned from it is taxed as per the Income Tax slab applicable to the investor on redemption. That means an investor in the highest tax slab will pay 30 per cent tax on the returns from KVP . Also, 10 per cent of the interest earned would be deducted as tax deducted at source (TDS). ----------------------------------------------- Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds Top 10 Tax Saving Mutual Funds to invest in India for 2016 Best 10 ELSS Mutual Funds in india for 2016 1. BNP Paribas Long Term Equity Fund 2. Axis Tax Saver Fund 3. Franklin India TaxShield 4. ICICI Prudential Long Term Equity Fund 5. IDFC Tax Advantage (ELSS) Fund 6. Birla Sun Life Tax Relief 96 7. DSP BlackRock Tax Saver Fu...
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