Monthly Income deposit schemes -- Advice please

Hi, I am planning to fixed deposit Rs 5,00,000/- on my kid's name and the interest I get on every month will be invested into mutual funds in SIP mode for next 5 years.

Can you please suggest me wether my approch is correct, and also suggest me some better ways and good funds.

Thanks in Advance, Ravi

asked Oct 03 '12 at 23:06 by Ravi_Kumar 111

Your approach is fine, but please also note that interest on fixed deposit would be taxable as per your slab rates.

You may also consider investing into a debt mutual fund and start systematic transfer plan (STP). For first year, taxabliity of gains from debt funds would be same as that on bank fixed deposit interest, but after a year it would become long term gains and would be taxed @ 10% or 20% with indexation benefit.

answered Oct 05 '12 at 11:49 by Pankaj Batra 5.2k320

Hi pankaj, I have one doubt, STP : Liquid -----> Equity fund Debt Fund ---> equity fund In the above two options pls tell me which one will be effficient in tax point of view and returns point of view ?say 1L STP of 5000 per month
(Oct 10 '12 at 09:10) vignesh
Debt fund would have better returns than liquid funds. But they may have an exit load if redeemed before a particular period (say 3-6 months). In case of STP executed in exit load period, upto 1% may be charged on each redemption. I think, even after this exit load, you would have better return from debt fund STP. From tax point of view, both would be same.
(Oct 10 '12 at 16:47) Pankaj Batra

Know someone who can answer? Share a link to this question via Email, Twitter, or Facebook

Your answer
toggle preview

Follow this question

Once you sign in you will be able to subscribe for any updates here

Markdown Basics

  • *italic* or __italic__
  • **bold** or __bold__
  • link:[text]( "title")
  • image?![alt text](/path/img.jpg "title")
  • numbered list: 1. Foo 2. Bar
  • to add a line break simply add two spaces to where you would like the new line to be.
  • basic HTML tags are also supported



Asked: Oct 03 '12 at 23:06

Seen: 2,117 times

Last updated: Oct 10 '12 at 16:47