Different Of Types of Mutual Fund Schemes in India

Mutual funds are created as baskets of investments, which invests in financial instruments like stocks and bonds according to their defined investment objectives. These are known to be one of the most versatile and flexible investment avenues.

Mutual Fund & Types


Types of Mutual Funds

Systematic investment plan (SIP)

The three most beneficial modes available with Mutual Funds are - SIP - It is a simple and affordable way to start investing in Mutual Fund Schemes. Long-term SIPs also offer the benefit of Rupee Cost Averaging.

A Systematic Investment Plan (SIP) is an investment tool that allows the investor to invest a fixed amount in a Mutual Fund scheme at regular intervals. SIP invests a fixed amount at a predetermined frequency. This eliminates the need for an investor to time the market and allows them to invest without worry.

Systematic transfer plan (STP)

It allows to periodically transfer (switch) of a certain number of units from one mutual fund scheme to another mutual fund scheme of the same mutual fund house. You may consider an STP from an equity scheme to a debt scheme or vice versa depending on the market conditions.

An STP is access to the periodic transfer of a certain amount from one scheme to another scheme of the same mutual fund house. In other words, it is a strategy where an investor transfers a fixed amount of money from the Source scheme to the Target scheme. The transfer of STP can be considered from your equity scheme to a debt scheme or vice versa. This depends on the market conditions.

Equity fund investment using STP is beneficial when the invested amount is done in a short-term fund or liquid fund. STP is generally higher than that of a savings bank account as it earns an extra return.

Systematic withdrawal plan (SWP)

An effective and efficient method of withdrawing from accumulated wealth for regular expenses without having to liquidate the entire investment is SWP (Systematic Withdrawal Plan). A ‘systematic withdrawal plan’ allows you to redeem your investment from a mutual fund scheme in a phased manner

A Systematic Withdrawal Plan (SWP) is a feature that enables an investor to withdraw funds from an existing mutual fund at predetermined intervals. SWP assists investors in generating a consistent stream of income from their investments.

An SWP can also help investors who want to supplement their salary with a second source of income. As an investor, you can use this strategy to generate a consistent stream of income from your investments. If you want to have a regular income for travel or other needs, this is a great way to do so.

Taxation

Short-term capital gains are taxed at the investor's tax rate. If you sell your equity mutual fund units after 12 months, you will realize a long-term capital gain. Long-term capital gains will be taxed at 10%, with no indexation benefit. Furthermore, long-term capital gains on equity mutual funds up to Rs 1 lakh are tax-free.

The key factors of tax determination on mutual funds. It depends on the type of mutual fund scheme Duration of the investment.

 

Website: https://primassure.in/

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