Debit fund for parent who doesn’t have taxable income

POSTED BY Raj ON January 24, 2013 8:04 am COMMENTS (4)

I want to park some money as my parent’s emergency fund say in my mother’s name as she doesn’t have taxable income. What will be the best debit instrument? Ultra short term debit fund or liquid funds? Should I invest using growth or divident option? I want to avoid hassle of TDS and then filing returns as well.

Please advice.

4 replies on this article “Debit fund for parent who doesn’t have taxable income”

  1. Dear Raj, please read 24 Hrs in the above reply in place of 245 Hrs. as it was typo error.

    Thanks

    Ashal

    1. Raj says:

      Thanks Ashal. But it seems like you need to have subscription to either of Reliance Liquid Fund – Treasury Plan or Reliance Money Manager Fund to get started. Then only you can link additional debit schemes like that of Reliance Regular Savings Fund – Debt Option.

      I’m okay with wait for 1/2 days to get the fund. My research says that best bet would be some Ultra short term bonds with credible investments. I’ll update my findings soon.

  2. Dear Raj, my choice ‘ll be Rel. RSF debt fund. the reason is – it’s the only AMC which offers ATM card facility in collaboration with HDFC to liquidate your holdings through ATM cards any time 245 hrs. If you are parking for emergency purpose, this should be the fund. No TDS is there on redemption.

    Rightly pointed out by dear FFC, liquidity is important & returns are not that much as this is emergency funding, so I’m not advising to avail high returns from this money.

    Thanks

    Ashal

  3. You can park some of it in a liquid fund growth option and keep some in a SB account for immediate liquidity. It is an emergency fund so returns are no important. Safety and liquidity is more important.

    Taxes are deferred until they redeem from debt instruments. So you will to check if at the time of redemption if the long or short term capital gains fall below their taxable limit or not.
    If the amount invested is small then is likely to be the case

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