Thank You very much for all ur advice 1)Whr can v know the rate of interest of Liquid Funds?? 2)How to calculate interest rate for Liquid Funds? 3)What are expenses related to liquid funds tht the investor has to bear?what is d DDT?Can u also please explain how the income tax is paid on the earnings of liquid funds? 4)Where can v get information abt Top performing Liquid Funds?their NAV's and the rate of interest tht the investor will get? 5)Can i make SIP's in Liquid funds?wld u advice a SIP of 5000 for more than 6 months but less than 1 year in liquid funds?or growth funds are advised? Thank You
1 Answers
1). Rate of interest on liquid funds is not fixed. Mutual funds can not project some guaranteed returns.
2). fund management charges are deducted from investments, but its already adjusted in NAV, so you can look for NAV returns. There is no direct expense investor has to bear.
3). DDT is dividend distribution tax. This has to be paid by AMC (asset management company - which run mutual funds) while distributed dividends to investor. DDT is not payable by investor.
4). If you keep liquid funds for more than a year, the long-term capital gain tax rate would be 10% without indexation or 20% with indexation. Short-term capital gains (if redeemed before completion of one year) on such transactions are taxable at normal income slab rates.
5). You can compare liquid mutual funds on ValueResearchOline or on MoneySights.
6) Generally SIPs is not offered on such schemes. But may invest yourself regularly.
7) for less than a year, you can go for FMPs and Liquid or other debt mutual funds.
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