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FIXED MATURITY PLANS BEAT NRE / NRO YIELDS |
Comparative Income Analysis of NRO, NRE V/s FMP's (Fixed Maturity Plan)
|
Particulars |
NRO 1
Yr. Deposit |
NRO Savings |
NRE 1
Yr. Deposit |
NRE Savings |
ICICI
Pru. Mutual Fund FMP |
TATA
Mutual
Fund FMP |
|
Return
(p.a.) |
9.50%
|
3.50% |
4.17% |
3.50% |
8.75% |
9.00% |
|
Tax
rate * |
33.66%
|
33.66% |
NIL |
NIL |
11.33% |
22.66% |
|
Net |
6.30% |
2.32% |
4.17% |
3.50% |
7.76% |
6.96% |
|
Tenure |
1
Yr. |
Min.
1 mnth. |
1
Yr. |
Min.
1 mnth. |
370
Days |
13
Mnths |
|
Lock
in period and Liquidity |
1
yr. |
Min.
1 mnth for Interest |
1
Yr. |
Min.
1 mnth for Interest |
^redemptions
made during repurchase facility period |
^Redemption
before maturity |
|
Repatriation |
Not |
Not |
Repatriable |
Repatriable |
Repatriable |
Repatriable |
|
Tax
status Interest/Dividend |
Taxable
|
Taxable |
TAX
FREE |
TAX
FREE |
Subject
to Max. 10% Tax |
Subject
to Max. 10% Tax |
Salient Features of Fixed Maturity Plan
1 Initial investment is made in Indian Rupee Fixed Maturity Plan of leading Mutual Funds like Standard Chartered, Franklin Templeton Mutual Fund, Tata Mutual Fund and others.
02 The principal amount and fixed returns are both guaranteed.
03 The gains are taxed after indexation.
04 Annualized yield for NRI investor after tax ranges to 9.90 % to 10.10 %.
05 The Principal amount as also gains are fully repatriable.
List of Current FMPs :
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Sr. No. |
Scheme Name |
Date |
Indicative Yield |
Application forms |
|
1. |
TATA FIXED HORIZON FUND SERIES - 20 Scheme B |
3rd November'08 - 15th December'08 |
9.45% |
|
|
2. |
UTI Fixed Term Income Fund Series V - IX (13 months) |
1st November'08 - 15th December'08 |
9.50% |
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Current FMPs |
|
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TATA FIXED HORIZON FUND SERIES - 20 Scheme B Indexation Benefit Available! Opens on: 03rd December'08 Closes on: 15th December'08 |
|
|
Type of scheme |
A Close Ended Debt Fund |
|
New fund offer price |
Rs.10/- per unit |
|
Allotment Date |
19th
December, 2008 |
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Maturity Date |
19th April, 2010 |
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Tenor of the scheme |
16 Months |
|
Indicative Yield |
Retail Plan: 9.45% Institutional Plan: 10.40% |
|
Entry Load |
Nil |
|
Exit Load |
1% if redeemed before maturity, Nil on maturity. |
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Minimum application amount |
Retail Plan: Rs.10,000/- and in multiples of Re.1/- thereafter. Institutional Plan: Rs. 1,00,00,000/- and in multiples of Re.1/- thereafter. |
|
Investment objective |
The investment objective of the scheme is to generate income and / or capital appreciation by investing in wide range of Debt and Money Market instruments. |
|
Options available |
(I) Growth (II) Dividend - Dividend Payout |
|
UTI Fixed Term Income Fund Series V - IX (13 months) Indexation Benefit Available! Opens on: 01st December'08 Closes on: 15th December'08 |
|
|
Type of scheme |
A Close Ended Income Fund |
|
New fund offer price |
Rs.10/- per unit |
|
Allotment Date |
18th
December, 2008 |
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Maturity Date |
18th January, 2010 |
|
Tenor of the scheme |
13 Months |
|
Indicative Yield |
Retail Plan: 9.50% Institutional Plan: 10.30% Super-Institutional Plan:10.45% |
|
Entry Load |
Nil |
|
Exit Load |
3% before maturity |
|
Minimum application amount |
Retail Plan: Rs 5,000 Institutional Plan: Rs 1 Crore |
|
Investment objective |
The scheme aims to generate stable returns by investing in a portfolio of fixed income securities normally maturing in line with the maturity period of plan. However, the scheme does not guarantee /indicate any returns. There can be no assurance that the fund's objective will be achieved. |
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Options available |
(I) Growth (II) Dividend - Dividend Payout - Dividend Reinvestment |
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Fixed Maturity Plans (FMPs)- BASICS |
Safe,
predictable and better post-tax returns than bank FDs Rising
interest rates not only mean rising EMIs but also offer an opportunity to earn
higher returns. Debt schemes are now offering attractive returns with short-term
rates in the region of 8-10%. Call money rates have been moving higher to about
7.5-8% due to tight liquidity conditions. With the RBI deciding to raise the
cash reserve ratio (CRR), liquidity conditions have worsened. Tightness in the
money markets is expected to continue till the end of the current financial year
and investors can consider investing in short term options like FMPs or floating
rate schemes. Fixed
maturity plans, or FMPs as they are popularly called, are close-ended funds with
a fixed tenure and invest in a portfolio of debt products whose maturity
coincides with the maturity of the product. The
primary objective of a FMP is to generate income while protecting the capital by
investing in a portfolio of debt and money market securities. The tenure can be
of different maturities, ranging from one month to five years.
Benefits of FMPs
FMPs offer many benefits like tax efficiency, fixed tenure and low sensitivity to interest rates. The minimum investment amount is usually Rs 5,000, which a retail investor can easily invest.
Capital protection: FMPs have less risk of capital loss than equity funds due to their investment in debt and money market instruments.
Low interest rate sensitivity: As the securities are held till maturity, FMPs are not affected by interest rate volatility. The actual returns are more or less close to the indicative returns declared at the scheme's launch.
Lower cost: FMPs involve minimum expenditure on fund management, as there is no requirement for a time-to-time review by fund managers to buy/sell the instruments constituting the fund. Since these instruments are held till maturity, there is a cost saving in respect of buying and selling of instruments.
Tax benefits: FMPs score over fixed deposits because of their tax efficiencies both in the short-term as well in the long-term.
** If you wish to open new NRE / NRO bank account, please inform.
However, if you do not have the Permanent Account Number (PAN) and Know Your Customer (KYC) compliance which is mandatory and if you wish to avail, we will provide professional assistance for application of Permanent Account Number (PAN) and Know Your Customer (KYC) compliance.
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MF Equity Schemes & BSE, NSE, FTSE, Dow 1 / 2 / 3 Years Performance as on 31.10.2008 |
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| Rank | 1 year - Gain | 2 years - Gain | 3 years - Gain | |||
| Fund Name | Gain % | Fund Name | Gain % | Fund Name | Gain % | |
| 1 | Uti - Spread Fund | 8.91% | Principal Focussed Advantage Fund | 33.21% | Reliance Diversified Power Sector Fund | 107.29% |
| 2 | Jm - Arbitrage Advantage Fund | 8.57% | Uti Leadership Equity Fund | 29.88% | Principal Focussed Advantage Fund Growth Plan | 93.06% |
| 3 | Lotus India Arbitrage Fund | 8.34% | Reliance Index Fund | 27.08% | Reliance Index Fund - Sensex Plan | 92.78% |
| 4 | Hdfc Arbitrage Fund | 8.20% | Reliance Diversified Power Sector Fund | 22.80% | Reliance Index Fund - Nifty Plan | 73.96% |
| 5 | Sbi Arbitrage Opportunities Fund | 7.58% | Reliance Index Fund | 21.60% | Uti Equity Fund | 62.10% |
| 6 | Kotak Equity Arbitrage Fund | 7.46% | Uti - Spread Fund | 19.40% | Birla Tax Plan '98 | 61.17% |
| 7 | IDFC Arbitrage Fund - Plan B | 7.36% | Jm - Arbitrage Advantage Fund | 19.01% | Sundaram BNP Paribas Select Focus | 59.10% |
| 8 | IDFC Arbitrage Fund - Plan A | 6.82% | Kotak Equity Arbitrage Fund | 17.69% | DSP BlackRock Top 100 Equity Fund | 57.68% |
| 9 | Principal Focussed Advantage Fund | 1.44% | Uti Equity Fund | 14.36% | ICICI Prudential Infrastructure Fund | 56.63% |
| 10 | Aig Infrastructure And Economic Reform Fund | N.A. | Birla Tax Plan '98 | 6.68% | Tata Infrastructure Fund | 47.45% |
| 11 | Bsl Pure Value Fund | N.A. | IDFC Premier Equity Fund | 6.26% | HDFC Growth Fund | 46.84% |
| 12 | Bsl Special Situations Fund | N.A. | Reliance Banking Fund | 3.14% | Franklin India Prima Plus | 43.84% |
| 13 | Bsl Tax Relief'96 Fund-elss | N.A. | Aig India Equity Fund Institutional Growth | N.A. | IDFC Premier Equity Fund | 43.76% |
| 14 | Franklin Asian Equity Fund | N.A. | Aig India Equity Fund Regular Growth | N.A. | Sundaram BNP Paribas Tax Saver | 43.49% |
| 15 | Franklin India TAXSHIELD'95 | N.A. | Aig Infrastructure And Economic Reform Fund | N.A. | Uti Growth Sector Fund | 41.36% |
| 16 | FT India Pe Ratio Fund | N.A. | Birla Long Term Advantage Fund | N.A. | Uti Thematic Large Cap Fund | 40.39% |
| 17 | Hdfc Infrastructure Fund | N.A. | Bsl International Equity | N.A. | HDFC Top 200 Fund | 39.86% |
| 18 | Hsbc - Emerging Market Fund | N.A. | Bsl Pure Value Fund | N.A. | Kotak 30 Equity Scheme | 38.92% |
| 19 | Hsbc - Small Cap Fund | N.A. | Bsl Special Situations Fund | N.A. | Reliance Growth Fund | 38.74% |
| 20 | Icici Prudential Fusion Fund | N.A. | Bsl Tax Relief'96 Fund | N.A. | Dws Investment Opportunity Fund | 38.70% |