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FIXED MATURITY PLANS BEAT NRE / NRO YIELDS |
Comparative Income Analysis of NRO, NRE V/s FMP's (Fixed Maturity Plan)
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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% |
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Net |
6.30% |
2.32% |
4.17% |
3.50% |
7.76% |
6.96% |
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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 |
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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.
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Currently no FMPs are available.
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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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INDIA - the global investment destination
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MF Equity Schemes & BSE, NSE, FTSE, Dow 1 / 2 / 3 Years Performance as on 31.01.2010 |
| Rank | 1 year - Gain | 2 years - Gain | 3 years - Gain | |||
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Fund Name |
Gain % |
Fund Name |
Gain % |
Fund Name |
Gain % | |
| 1 | DSP BlackRock Micro Cap Fund | 139.30% | Franklin PHARMA FUND | 85.49% | Reliance Diversified Power Sector Fund | 100.68% |
| 2 | DBS Chola Midcap Fund | 132.91% | Franklin INFOTECH FUND | 31.81% | IDFC Premier Equity Fund | 87.26% |
| 3 | DSP BlackRock Small and Mid Cap Fund | 129.52% | ICICI Prudential Discovery Fund | 31.24% | Reliance Banking Fund | 86.91% |
| 4 | Birla Sun Life Midcap Fund | 129.43% | Birla Sun Life Dividend Yield Plus | 29.28% | Baroda Global Fund | 66.67% |
| 5 | Canara Robeco Emerging Equities Income (Dividend) Fund | 128.18% | Franklin FMCG FUND | 26.15% | Franklin PHARMA FUND | 62.07% |
| 6 | Canara Robeco Emerging Equities Bonus Fund | 127.89% | ING Dividend Yield Fund | 22.50% | ING Dividend Yield Fund | 58.85% |
| 7 | Canara Robeco Emerging Equities Auto Repurchase | 127.85% | Birla Sun Life MNC Fund | 22.00% | BARODA PIONEER Diversified Fund | 57.72% |
| 8 | Canara Robeco Emerging Equities Growth Fund | 127.85% | BSE | 17.99% | Birla Sun Life Dividend Yield Plus | 55.52% |
| 9 | DSP BlackRock Technology.com Fund | 121.48% | HDFC Equity Fund | 15.76% | BARODA PIONEER GROWTH FUND | 52.23% |
| 10 | Birla Long Term Advantage Fund | 120.76% | Reliance Banking Fund | 14.31% | HDFC Top 200 Fund | 51.73% |
| 11 | Birla Sun Life India Opportunities Fund | 118.62% | JM Mid Cap Fund | 14.31% | Birla Sun Life Midcap Fund | 49.34% |
| 12 | Birla Sun Life Midcap Fund | 114.51% | HDFC Top 200 Fund | 13.60% | NSE | 48.47% |
| 13 | NSE | 110.86% | Jm - Arbitrage Advantage Fund | 12.81% | Reliance Growth Fund | 48.20% |
| 14 | Dbs Chola Small Cap Fund | 106.77% | Kotak Equity Arbitrage Fund | 12.61% | ICICI Prudential Discovery Fund | 46.97% |
| 15 | DBS Chola Opportunities Fund | 104.06% | Hdfc Arbitrage Fund | 12.50% | DSP BlackRock Top 100 Equity Fund | 46.70% |
| 16 | Canara Robeco Equity Diversified | 102.53% | DSP BlackRock Equity Fund | 12.50% | Birla Sun Life Frontline Equity Fund | 45.76% |
| 17 | Birla Sun Life Infrastructure Fund | 101.26% | ICICI Prudential - Blended | 11.78% | HDFC Equity Fund | 45.12% |
| 18 | BSL Tax Relief'96 Fund- (ELSS U/S 80C of IT ACT) | 101.18% | IDFC Arbitrage Fund - Plan B | 11.22% | HDFC Growth Fund | 43.29% |
| 19 | DBS Chola Tax Saver Fund | 99.72% | IDFC Premier Equity Fund | 10.94% | DWS INVESTMENT OPPORTUNITY FUND | 43.16% |
| 20 | Birla Sun Life Basic Industries Fund | 98.54% | Birla Sun Life Buy India Fund | 10.75% | ICICI Prudential Infrastructure Fund | 42.54% |
| 21 | Bsl Special Situations Fund | 79.64% | HDFC Capital Builder Fund - Growth | 1.83% | Hsbc Tax Saver Equity Fund | 26.44% |
| 22 | BSE | 73.57% | NSE | -7.31% | BSE | 16.09% |
| 23 | DOW JONES | 20.53% | FTSE | -11.75% | FTSE | -16.36% |
| 24 | FTSE | 20.02% | DOW JONES | -36.75% | DOW JONES | -20.24% |
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