Features and Benefits

• Reduces investment risk: Diversification among a number of investments helps reduce the risk.
• Diverse benefits at low cost: Mutual Funds offer you a chance to invest in a diversified, professionally managed basket of securities at a low cost.
• Professionally managed: Investment decisions by Fund Managers are backed by research to generate higher returns.
• Ease of liquidity with open-ended schemes: Hassle-free liquidation of mutual fund investments.
• Benefit of flexibility and transparency: Investment options are available as per investment objective. Information on schemes are available through fact sheets and promotional materials. All Mutual Fund activities in India are well regulated by SEBI.
• Tax efficient investment: Returns over one year from schemes with equity exposure of 65% or more are subject to income-tax at the rate of 10% (without indexation benefit) plus applicable surcharge and 4% cess on the long-term capital gains exceeding Rs. 1 lakh, provided transfer of such units is subject to STT. The dividends received from equity schemes are completely tax-free for unit holders. Short-term capital gains tax @ 15% is payable on the net short-term gains.

In Debt Funds, if investment is held for more than three years, the capital gain is treated as Long Term Capital Gain or LTCG. Investor is entitled to the benefit of indexation on LTCG and the capital gains post-indexation is taxed @20% plus applicable surcharge and 4% cess while short term capital gains in debt mutual funds is taxed as per individual’s income tax slab. The dividends received from debt mutual funds are tax-free for unit holders.

A Systematic Investment Plan (SIP) is a convenient way to accumulate wealth in a disciplined manner over a long-term period. It helps you to invest regularly in small installments and thereby build wealth over a period of time.

Advantages of SIP:

• Power of Compounding: Start investing early to benefit from greater power of compounding with significant impact on wealth accumulation.
• Rupee Cost Averaging: SIP minimises the effects of investing in volatile markets as it helps you average out your cost, thus generating superior returns in the long run.
• Convenience and Regularity: SIP gives you the convenience to pay through ECS or Auto Debit mandate. You can decide the amount and the mutual fund scheme. A fixed amount automatically gets debited from account on a date specified by you.
• Disciplined approach towards investment: : Investing regularly instills discipline in your savings, which leads to wealth accumulation. Disciplined investing is vital to earning good returns over a longer time frame.

Systematic transfer plan (STP) facility allows an investor to invest a sum of money into a mutual fund in a staggered way.

Features of STP :

• In STP, money moves from a one fund into another fund at defined time intervals within the same fund house
• Transfer facility is available on a daily, weekly, monthly and quarterly interval
• The source scheme from where the money moves is called “Transferor Scheme” while the destination scheme where this money gets invested is called “Transferee scheme"

• STP provides periodic transfer of funds from one scheme to another of the same fund house
• Systematic Transfer Plan helps to keep a balance of risk and return
• The money invested in source scheme continues to earn return while the funds are transferred to destination scheme
• An ideal STP is recommended from Debt or Liquid Fund to an Equity oriented Mutual Fund