POSTED BY March 12, 2014 2:01 pm COMMENTS (4)ON
If I have done some lump sum investment in a regular plan for more than a year, is it advisable to switch to direct plan of same fund NOW? Since investment is more than a year old, there will be no exit load but there will be STT. I do want to remain invested in same fund for 5 years. Pls suggest
1. What is applicable STT%?
2. Considering STT is it worth to do the switch to Direct plan now?
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4 replies on this article “Should I switch mutual funds from regular to direct plan now?”
What actually happens when I switched from regular to direct?
Ex I have SIP regular plan (closed) . No more purchase going on in this profile. No short term gain tax applicable.
Will fund house apply exit load ? say it is x.
Now as say value of fund 50K minus x.
So my question is how much unit will be alloted to me in DIRECT fund . how NAV is calculated . or it will be treated as lumsum investment with current NAV.
There is a form which you need to fill to just move from regular to direct. There wont be any change in the value !
Dear Tonsi, aptly answered by dear Charan4ever. Please Nike. now.
Just do it. Now.
As you are planning to invest for long term 4-5 years, then I would suggest you to switch to direct plan as expenses will be low. The STT for such transactions is 0.001%, so if you switch 1Lac, then STT would be 1 rupee which is very less and can be ignored.
As you have invested in regular plan an year back, expense would not be there and capital gains will not be there. so go ahead and do the switch from regular to direct plan.
let me know if you have any further questions in this regard.