Deciding Whether to Continue with your Current Investment or to Switch
As earning individuals, we all face a variety of opportunities to make money, in addition to the monthly salary and/or income received. While leveraging these opportunities is important, it is also necessary that we make smart decisions regarding our finances and plan for growth. A part of this is investing money in vehicles we trust and are comfortable with, such as:
1. Fixed deposits or other related products offered by banks and Non-Banking Financial Companies (NBFCs)
2. Stocks
3. Bonds
4. Mutual funds and related products
The options cited above are diverse and have different features. Here is a comparison- fixed deposits provide fixed returns as per the rate decided by the bank or NBFC on the sum deposited by an individual. These involve the lowest risk of all investment options and provide safe returns, irrespective of market conditions. Mutual funds, on the other hand, involve a fund manager investing pooled funds from multiple individuals on a number of objects like stocks and bonds. They are flexible, economic and have a diversified risk factor.
Switching between investment options is considered by many to maximize profits and/or to minimize risks.
Individuals can switch between mutual fund plans through a one-time plan, Systematic Transfer Plan as well as Triggered Switches. There are tax considerations here as acquiring a new fund is followed by redemption from another which is taxable. Here, one also needs to consider entry and exit loads and the time duration prior to switching between funds.
Have a look common questions for investors which help you to get more knowledge about the investment and help to become good investor.
1. Fixed deposits or other related products offered by banks and Non-Banking Financial Companies (NBFCs)
2. Stocks
3. Bonds
4. Mutual funds and related products
The options cited above are diverse and have different features. Here is a comparison- fixed deposits provide fixed returns as per the rate decided by the bank or NBFC on the sum deposited by an individual. These involve the lowest risk of all investment options and provide safe returns, irrespective of market conditions. Mutual funds, on the other hand, involve a fund manager investing pooled funds from multiple individuals on a number of objects like stocks and bonds. They are flexible, economic and have a diversified risk factor.
Switching between investment options is considered by many to maximize profits and/or to minimize risks.
Individuals can switch between mutual fund plans through a one-time plan, Systematic Transfer Plan as well as Triggered Switches. There are tax considerations here as acquiring a new fund is followed by redemption from another which is taxable. Here, one also needs to consider entry and exit loads and the time duration prior to switching between funds.
Have a look common questions for investors which help you to get more knowledge about the investment and help to become good investor.
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