FD or Ultra Short Term DEBT fund

POSTED BY Rajendran ON February 1, 2011 11:16 pm COMMENTS (3)

Hi,

 I have 4 lakh in cash. I would like to know what is the best place to park this fund now?

I am getting 9% interest for 590 days deposit in FD in ICICI or

shall I need to park it in some ultra short term debt fund?

In case If I park my fund in debt fund and redeem them around next year March i.e. more than 1 year do I need to pay any capital gain tax on the return.

Note:

  I fall under 20% tax bracket.

Thanks for your time and effort.

 

 

3 replies on this article “FD or Ultra Short Term DEBT fund”

  1. bharat shah says:
    February 2, 2011 at 3:49 pm

    bank fd interest is taxable as normal income whereas you can avail long term capital gain as stated in previous reply. in case of need, as i think, for early period , you have to forgo good % of interest for bank fd, whereas for liquid mf, it is rather same throughout whole period .

    Reply
  2. raju says:
    February 2, 2011 at 10:31 am

    Yo can consider HDFC Sweep in fixed deposit instead of normal fixed deposit,which has more liquidity than regular fixed deposit,no charges for the partial withdrawal or complete withdrawal.

    Reply
  3. Rajendran says:
    February 2, 2011 at 12:22 am

    I just found the answer for the tax part. It looks like when you hold the equity for more than a year and while selling if you pay the STT then you don’t need to pay any tax like Shares.

    Whereas in Bonds, as we don’t pay STT we have to pay the long term capital gain tax (10% without indexed and 10% with indexation)

    Can someone confirm me this?

    Reply

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