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POSTED BY ON November 12, 2012 11:30 pm COMMENTS (6)
I have following queries about debt funds –
1. What is the difference between Short Term Debt fund and Ultra Short Term debt funds? Any differences in the Entry/Exit Loads? How many days does it take for redemption?
2. What are different maturities available in the FMP? How good are FMPs over FDs for someone falling in the 10% tax bracket? What are the average/median returns of FMP, for say 1 year maturity?
3. In case of liquid funds, what are the entry/exit loads? What are the tax implications? In which situation is it advisable to park your money in liquid funds than to keep it in Savings account? How fast is the redemption process for the same?
4. Reliance MF has started Any Time Money Card where you keep your money in one of RMF’s liquid scheme. Any reviews available of this scheme? What are issues related to such products?
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Yes, that’s true.
Dear Siddhesh, you may use the exl. sheets or many online portfolio trackers to do this cap. gain calculation for you free of charge.
Thanks
Ashal
Hmm… In that case it is a complicated matter to go for such a card, unless Reliance provides a statement of account with realized capital gains in the year (which is too much to ask from them to be honest).
Anyway thanks for the answer, Ashal.
Dear Siddhesh, let me answer your query on Taxation part of Rel. ATM card. Once you withdraw amount from any ATM, the transaction ‘ll be treated as redemption & you ‘ll get an updated account statement from the RTA mentioning the NAV at which the redemption happened. Now on the basis of redemption NAV, you may calculate your gains & then you w’d have to pay tax on your own if it’s to be paid at all. Except NRIs, TDS is not there for Indian Investors in MFs & specially Debt funds.
Thanks
Ashal
Hi Manish,
Thanks for the reply. I went through the articles you pointed out and the articles as well as the comments in them were really helpful.
I had tried searching for reviews of Reliance MF ATM earlier, but all the articles just listed the advantages and not actually reviews. My concern with this scheme is the tax calculations. Since withdrawal via such ATM card will be a redemption, how will one calculate the taxes applicable if they are not deducted at source. It seems a tricky situation. I guess I will pass such scheme as there is still not of confusion in my mind about it.
1. Mainly the main difference is in the maturity period of the instruments where they invest ! .. Ultra Short term funds invest in short maturity investments , which can range from 90 days to 1.5 yrs, where are short term funds can mature in 1-3 yrs, hence the lower the maturity , stable it is , because they do not depend a lot of the future interest movements .
2. FMP’s are like FD’s , but with indicative returns . FMP keep coming in markets and are close ended, you cant invest in any FMP anytime . The risk of final return deviating from the indicative return is always there. read more here – http://jagoinvestor.dev.diginnovators.site/2008/08/what-is-fmp-fixed-maturity-plans-fmps.html
3. See this – http://jagoinvestor.dev.diginnovators.site/2008/11/difference-between-equity-debt-and.html . Liquid funds are only suggested if you want your money to be liquid and can be taken out asap when you want.
4. Search for the reviews on the net .
Manish