Skip to main content

Tax-free bonds and Debt mutual funds

 
Tax-free bonds & select debt mutual funds see big demand; banks lose `40,000 cr net in a fortnight
 
Falling rates appear to be prompting a shift from traditional bank term deposits to alternative investment avenues including taxfree bonds and select mutual fund debt schemes.

Depositors have pulled out a net `40,000 crore from banks since the fortnight ended October 2, which began immediately after the Reserve Bank of India lowered its policy rates by 50 basis points. A basis point is 0.01%.

We have seen people investing in tax-free bonds by breaking fixed deposits," said Vikram Dalal, managing director of Synergee Capital."Some bank relationship managers, too, are not promoting tax-free bonds as these would prompt depositors not to renew their existing deposit schemes, but bet on tax-free higher returns

In the past two months, state-run fir ms NTPC, Power Finance Corporation, Rural Electrification Corporation, Indian Railways Finance Corporation and National Highway Authorities of India have together sold bonds worth more than `16,000 crore through issuances which were oversubscribed multiple times.

Those securities offer tax-free interest rates as high as 7.14-7.62% across 10-15-20 year maturities.These papers are considered as safe as bank fixed deposits, which are now yielding 6-6.70% across maturities after tax.

According to RBI data term deposits mobilised by the commercial banks dipped `41,410 crore between October 2 and November 27 compared to `39,630 crore additions to term deposits in the same period a year ago. In 2015, the RBI has slashed the benchmark rate by 125 basis points, but banks have so far passed only 60 basis points to customers, leaving space for sharp rate cuts.

We are recommending accrual or corporate debt fund schemes to those investors who can earn 8-9% post-tax returns by shifting from traditional bank deposits yielding around 6-7%,".

Some wealthy investors will be interested in such schemes with falling bank deposit rates.

Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2018

1. BNP Paribas Long Term Equity Fund

2. Axis Tax Saver Fund

3. IDFC Tax Advantage (ELSS) Fund

4. ICICI Prudential Long Term Equity Fund

5. Religare Tax Plan

6. Franklin India TaxShield

7. DSP BlackRock Tax Saver Fund

8. Birla Sun Life Tax Relief 96

9. Reliance Tax Saver (ELSS) Fund

10. HDFC TaxSaver

Invest Rs 1,50,000 and Save Tax under Section 80C. Get Good Returns by Investing in ELSS Mutual Funds Online

Invest in Tax Saver Mutual Funds Online

Invest Online

Download Application Forms

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

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

Leave your comment with mail ID and we will answer them

OR

You can write to us at

PrajnaCapital [at] Gmail [dot] Com

OR

Leave a missed Call on 94 8300 8300

Popular posts from this blog

Rs 14,000 Crore worth of tax free bonds coming soon from NHAI , PFC

  NHAI, PFC file prospectuses, coupon rate not yet decided MORE debt investment options have opened up for investors with AAA rated tax-free bonds worth over Rs 14,000 crore lined up. The National Highway Authority of India ( NHAI ) and Power Finance Corporation ( PFC ) are offering Rs 10,000 crore and Rs 4,033.13 crore worth of tax-free bonds, respectively, as per prospectuses filed with the Securities and Exchange Board of India (Sebi). Of a Rs 5,000 crore issue by PFC, Rs 966.87 crore has already been raised through private placement on September 28 and November 1. Tax-free bonds give investors tax-free return on any amount invested. In another kind of bonds, the long-term infrastructure bonds, investments up to Rs 20,000 are tax exempt, that is this cap amount can be deducted from the taxable income. Accordingly, the NHAI prospectus has clarified that only the amount of interest from -and not the actual investment on -its new bonds will be tax-free. "NHAI's publ...
Read more

Change in Fund Manager for some of HSBC Mutual Fund Schemes

Buy Gold Mutual Funds Invest Mutual Funds Online Download Mutual Fund Application Forms Call 0 94 8300 8300 (India) However, this facility is only available to Unit holders who have been assigned a folio number by the AMC.   HSBC Mutual Fund has announced that the below mentioned schemes shall be managed by the new fund managers as stated in the table. The effective date will be July 02, 2012.   Amaresh Mishra 's will be Vice President and Assistant Fund Manager. Having done a Post graduate diploma in Business Management and Bachelor of Chemical Engineering, he has over seven years of experience in Equities and Sales.   Mr. Piyush Harlalka's designation shall be Vice President- Fixed Income. Qualified as a C.A., C.S. and holding M.B.A.( Finance degree), he has over six years of experience in Fund management and ...
Read more

How EEE and EET Tax affect Retirement Investments

  An important factor while choosing a financial product is its taxation , and for retirement savings, this is even more important as the sums involved are usually life-long savings. Here's a look at the current tax treatment of three major long-term retirement planning products, which are - Employees' Provident Fund (EPF), Public Provident Fund (PPF) and National Pension System (NPS). EPF The tax treatment is EEE, which means your money is exempt from taxes at the time of investment, accumulation and withdrawal. At the time of investment, the tax deduction is under the limit of section 80C of the Income-tax Act , which is currently Rs 1.5 lakh. Partial withdrawals are also tax-free if made after 5 years of continuous service. If withdrawals are made before 5 years of service, 10% tax will be deducted at source. Exceptions have also been provided for transfer of amount and conditions wherein the subscriber is unemployed for more than 2 months or the loss of job was beyond th...
Read more

Personal Finance: You can insure your wedding

But luck may not always be on your side. With the frequency of such attacks, as also other risks and unforeseen accidents growing, a wedding insurance is something you may want to look at if a marriage is being planned in the family. Event insurance plans like this is still in its nascent stages due to low awareness. And given the sacred nature of the ritual, nobody wants to discuss or think negative. But as wedding spends and risks grow, it makes sense to cover the potential monetary loss. The policy in those countries even covers the loss of the wedding ring, the wedding gown not reaching on time and even the expenses/loss due to late or non-appearance of the photographer which may mean staging the event once again for the photograph. In India, most insurance companies — including ICICI Lombard General Insurance, Oriental Insurance, Bajaj Allianz and National Insurance — offer wedding insurance. The policy is tailor made to individual requirements and needs. The sum insur...
Read more

Special Fixed Deposits

Fixed Deposits Invest Online   One after the another, banks have been slashing interest rates on fixed deposits. In the last year alone, fixed deposit rates for the two-three-year tenure have fallen by 1-1.15 percentage points. But, some banks offer special fixed deposits at higher rates. Here's taking a look at some such deposits. What's on offer The Kuber 400 days deposit from the State Bank of Hyderabad offers 7.85 per cent per annum. This is 10 basis points higher than the 7.75 per cent offered by the bank on its 1-year to less than 2-year deposit. You have to invest a minimum of ₹10,000 in the deposit. There is no penalty for premature withdrawal as long as the deposit has remained with the bank for at least 7 days. Canara Bank has a 444-day and a 555-day deposit, both of which offer 7.85 per cent. This is higher than the 7.75 per cent rate on the bank's over one-year to less than five- year deposits for amounts less than ₹1 ...
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