FD or MIP?

POSTED BY Sunil Shevante ON April 20, 2012 2:53 pm COMMENTS (4)

I plan to invest a particular amount every month so as to get monthly returns. I would like to know what is better of the two – FD or MIP.
What is good in terms of returns? Morever what are the tax consideration of MIP?

4 replies on this article “FD or MIP?”

  1. Sunil Shevante says:

    I am looking at getting regular monthly returns. I dont have any exposure to MIPs as of now. I do have FDs.

    1. Dear Sunil, You mean to say, you ‘ll invest today & from next month itself there should be some return for you?



  2. Dear Sunil, can you share more details on the investment time frame & from what time, you want to get returns back. Do you have some current exposure to any MFs or FDs & other instruments.



  3. BanyanFA says:

    From a long term perspective, MIPs may be good, specially if you are investing on a monthly basis.

    FDs are booked at the prevailining interest rate at the time of booking the FD. When interest rates would be lower, you would get lesser returns on your money. MIPs on the other hand have balancing aspect of approx 10-20% equity component which tends to rally in low interest rates scenario.

    From a tax perspective, FDs are also not tax efficient (if you are in 10% plus slab) compared to MIPs as interest on FDs are taxed at your slab rate, while MIPs would be taxed like a debt fund (capital Gain).


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