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POSTED BY ON May 13, 2013 6:45 pm COMMENTS (6)
I am planning to start a long term (3 – 5 years) SIP in an equity MF. I have decided on the Quantum AMC but am confused between the long term equity fund (growth) and the tax saving fund. Except for the lock-in period, there are no major differences. The long term fund has exit charges for upto 2 years and tax saver has no exit charges. I can also get the tax exemption till the DTC is actually implemented.
How do I choose between the two funds? Also, what happenes to the ELSS once the DTC arrives, do the schemes continue but for the tax benefit?
Thanks
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Dear Nsabhayankar, if you are not going to avail tax benefit, why are you interested in QTS? In my personal opinion, you should invest in QLTEF only. If you do have amount, STP from liquid fund ‘ll be a good idea. However, if you are planning to hold for long term i.e 15-20 years, you may think of investing in one go also.
Thanks
Ashal
yes, I do have a regular salary. the choice is between an SIP from savings account and STP from liquid fund.
“Also, would it be better to invest lump sum in Quantum liquid fund and start an STP than starting an SIP from savings account?”
yes , i think so, provided you have stream of income over a period. otherwise you may go at one time for investing a sum with you , rather than doing SIP/STP.
I would not need the ELSS for tax benefit. The combination of EPF, PPF and home loan principle will exhaust the 1 lakh limit.
The lock in period will be there for all the units in the tax saver fund even after DTC is in place, right?
Also, would it be better to invest lump sum in Quantum liquid fund and start an STP than starting an SIP from savings account?
Dear Nsabhayankar, do you want to avail tax benefit on your investment in Eq. MFs at the time of investment?
Please clarify.
thanks
Ashal
for QTSF the lock in period is 3 yrs and no exit load , whereas for QLTE there is exit load for less than 2 yrs. ,so if other things are same or similar, QLTE is better if you are not interested in tax benefits. otherwise QTSF is your obvious choice.
once DTC comes , you have no effect (reversion of tax benefits availed on investments) on your investment till then. for long term gain tax benefits (now available for equity oriented funds for 1 yr. holding) , would be same for both funds.