Mutual Fund Switching

POSTED BY Amit ON May 10, 2012 11:14 am COMMENTS (6)

What is charge for switching Mutual Fund before completing 1 year?
I want to switch from Divident plan to Growth plan of same fund (HDFC Top 200), will I be charged for switching?

6 replies on this article “Mutual Fund Switching”

  1. Muthu Krishnan V says:

    short term capital gains (google it up)

  2. Amit says:

    What is STCG?

  3. Dear Amit, apart from exit load (usually 1%), the STCG if any ‘ll be taxed @ 15.45% rate.



  4. Amit says:

    Thanks a lot…

  5. A simpler option would be take the Dividend payout and invest it in Growth scheme. After the initial corpus completes 1 year you can move that corpus to Growth. What is the hurry to move to growth scheme?

    If there is any misconception that growth schemes grow faster you need to understand that in detail. Assume the scheme pays dividend every year on May 10. Then between May 10, 2012 and May 10, 2013 both the Dividend and Growth option will grow the exact amount % wise. In a Dividend scheme the money is paid out so you lose compounding which is why over long durations Growth scheme returns better. If you manage you dividend payouts to be invested in Growth scheme you get the same returns because Dividends are tax free today and there is no entry load whatsoever.

  6. Muthu Krishnan V says:

    it will be treated like a redemption and fresh purchase. exit load will be applicable as well as STCG.

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