Where Should You Invest?? Is it in Fixed Deposit or in Mutual Fund ?

vinita
vinita kejriwal April 2, 2024
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📈💰 Mutual Funds vs. Fixed Deposits: Which is Right for You? 💰📉

When it comes to growing your money, there are various avenues to consider. Two popular options are mutual funds and fixed deposits, each with its own set of advantages and considerations. Let’s break it down:

1. Returns:

Fixed Deposits: Offer fixed returns at predetermined rates. Typically, these rates are lower but stable.

Mutual Funds: Provide the potential for higher returns over the long term, albeit with more volatility. The returns are linked to the performance of the underlying assets.

2. Risk:

Fixed Deposits: Considered low-risk investments as they offer guaranteed returns and are not subject to market fluctuations.

Mutual Funds: Carry higher risk due to market volatility. However, diversified funds and long-term investment horizons can help mitigate this risk.

3. Liquidity:

Fixed Deposits: Generally, funds are locked in for a fixed tenure, and premature withdrawal may attract penalties.

Mutual Funds: Offer more liquidity, allowing investors to redeem their units at prevailing Net Asset Value (NAV) anytime. However, certain funds may have exit load charges for early redemption.

4. Inflation Hedge:

Fixed Deposits: While they offer stability, returns may not always outpace inflation, potentially leading to a decrease in purchasing power over time.

Mutual Funds: Historically, equity-oriented funds have shown the potential to beat inflation over the long run, thus preserving and growing real wealth.

5. Tax Implications:

Fixed Deposits: Interest earned on fixed deposits is taxable as per the individual’s tax slab, potentially reducing overall returns.

Mutual Funds: Tax treatment varies based on the type of fund and holding period. Equity-oriented funds held for over one year qualify for long-term capital gains tax benefits.

In essence, the choice between mutual funds and fixed deposits depends on your financial goals, risk tolerance, and investment timeframe. Consider consulting with a financial advisor to determine the best fit for your portfolio. Happy investing! 🚀💼

Categories: Finance

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Only 5 MFs allow NRIs residing in US and Canada to execute online transaction without any limits

NRIs based out of US and Canada can invest in Indian mutual funds. However, AMCs do not have a uniform policy to deal with US and Canadian clients.

Currently, close to 14 fund houses receive investment from investors based out of these two countries and another five AMCs receive investment only from US.

Broadly, there are two categories of fund houses here – where investors are not required to physically present in India and vice versa.

Here is the list of fund houses where investors are not required to be physically present in India:

  • Aditya Birla Sun Life Mutual Fund
  • Nippon India Mutual Fund
  • Quant Mutual Fund
  • Sundaram Mutual
  • UTI Mutual Fund

Interestingly, these fund houses allow such NRIs to invest in their MF schemes without any restriction that too through online transaction.

Let us look at the fund houses which insist NRIs to be physically present in India:

  • 360 One Mutual Fund
  • Axis Mutual Fund
  • DSP Mutual Fund (Only lumpsum)
  • ITI Mutual Fund (Only lumpsum)
  • Kotak Mutual Fund
  • Navi Mutual Fund
  • PPFAS Mutual Fund
  • SBI Mutual Fund
  • Taurus Mutual Fund
  • White Oak Capital Mutual Fund

Similarly, here is the list of fund houses, which receive money only from US investors:

  • Bandhan Mutual Fund (Only US)
  • Edelweiss Mutual Fund (Only US)
  • HDFC Mutual Fund (Only US)
  • ICICI Mutual Fund (Only US)
  • Motilal Oswal Mutual Fund (Only US)

Please note that all these fund houses receive investment only through physical mode. Also, these fund houses insist NRIs to submit application form along with a declaration form indicating their residential status.

NRIs residing in US and Canada will have to share Foreign Account Tax Compliance Act (FATCA) details and tax identification number (TIN) along with KYC details.

FATCA declaration form captures information like type of address (residence, business, registered office etc.), country of tax residence, tax identification number, Global Intermediary Identification Number (GIIN) and seek investors consent for sharing the information with relevant tax authorities.

For transaction, an NRE (Non-Resident External) or NRO (Non-Resident Ordinary) account is a must.

Source: Cafemutual

 
vinita
vinita kejriwal February 3, 2024
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