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India's forex reserves shrink the most since Lehman Brothers fall economictimes.com
India's foreign exchange reserves have had the steepest three-week fall since the collapse of Lehman Brothers Holdings in 2008, as the Reserve Bank of India wages a half-hearted battle to arrest the currency's fall amid turbulence in the international financial markets. Read more>>
RBI wants cos to hedge forex risk before fresh borrowings - financialexpress.com
On top of Wednesdays series of measures to arrest the rupees fall, the Reserve Bank of India has advised companies to take fresh foreign currency exposure only after implementing the hedging policies adopted by their respective boards. An advisory has been sent through banks, said a senior RBI official engaged in forward market development. Read more>>
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Investors should remember that excitement and expenses are their enemies - Warren Buffet
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ELSS is still the best bet to save tax despite higher rates on NSC, PPF economictimes.com
As we approach the annual taxsaving investment season, the landscape of available avenues has changed decisively. As things stand, I would expect investments for tax-breaks to be biased heavily in favour of the government's small savings schemes as opposed to an equity-based tax-saving option like ELSS mutual funds. Read more>>
Investors should remember that excitement and expenses are their enemies - Warren Buffet
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Fixed Maturity Plan is a type of debt mutual fund in which funds are invested for a fixed duration, just like bank FDs the units of this plan mature on a predefined date (and therefore the name Fixed Maturity Plan).
The money collected is invested in fixed-income instruments. It can be money market instruments like CPs, CDs, corporate bonds and even bank fixed deposits.
This lock-in rate is often presented to investors as indicative return. This return is not guaranteed but the fund manager expects to earn that much return based on the investment made. Returns offered by FMPs are usually better than bank FDs.
Expense Ratio: FMPs usually have expense ratios between 0.25% and 1%. Exit Load: FMPs invest for a fixed tenure. So, stability of funds is important for them. Thus, to discourage early redemptions, the exit load is usually high from 1% to 3%.
FMPs invest in debt having different levels of risk. But they usually stick to relatively low-risk debt issues. Any short term capital gain from FMPs is added to you income for that year, and is taxed as per the applicable income tax brackets / slabs.
Any long term capital gain is taxed at a special rate 10% without the benefit of indexation, or 20% with the benefit of indexation.
Fixed Maturity Plan (FMP) Offered by Safety Duration of investment Mutual Funds (MFs) less safe compared to FDs 1 month to 3 years Money market instruments, corporate bonds and bank FDs Generally return is better than bank FDs
Fixed Deposit (FD) Banks Very safe, safer than FMPs 15 days to 10 years
Money invested in
NA
Rate of return Rate of return (at the time of investment) Expense Ratio Exit Load
Guaranteed
0.25% to 1% per year Practically there is no exit option Dividend: Tax free Short term gain: Clubbed with that years income, and
Interest earned is clubbed with that years income, and is taxed as per the applicable IT slabs.
Investors should remember that excitement and expenses are their enemies - Warren Buffet
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