Topic 4: Tips to Build a Diversified MF Portfolio, NPS Withdrawal Norms
Experts advise investing in mutual funds only after understanding the schemes and their functioning in the light of one’s investment needs and risk appetite.
Over the years, investing in mutual funds has emerged as a popular option among a vast population of investors with varied incomes and risk appetites as mutual funds have outperformed most investments avenues in last few years. However, there are many myths or misconceptions related to mutual fund investment which may result in a wrong investment decision.
If you have been investing in National Pension Scheme and waiting for the clarity on the withdrawal norms, here is how much and how to withdraw from the NPS.
As per the guidelines a subscriber can make partial withdrawal for the following purposes:
Being the start of the new year, many salaried individuals are in a hurry to invest their money to save income tax. But don’t jump the gun and avoid these mistakes. Instead make a more informed decision while investing to save income tax.
Source: moneycontrol.com
Over the years, investing in mutual funds has emerged as a popular option among a vast population of investors with varied incomes and risk appetites as mutual funds have outperformed most investments avenues in last few years. However, there are many myths or misconceptions related to mutual fund investment which may result in a wrong investment decision.
- Everyone who tends to invest in mutual funds first looks at the historic performance of the fund and then decides to make the investment. Therefore, we can clearly say everyone feels the future performance will be linked to the previous performance and will fall in line. If future was based on past, every analyst would have made money thick & fast which is clearly a myth.
- Commonly believed that when the NAV is lower, the fund is cheaper and hence will provide higher returns. NAV is nothing but the current market value of the portfolio today. Older the fund, higher is the NAV as the market value grows over a period.
- When someone suggests a mutual fund, the first question asked is whether it is “long-term " investment. The fact is it's good if you invest for a very long term, as you reap the benefits of compounding, but one who needs money sooner can also invest with a view of getting the better return than other asset classes. There are multiple schemes to choose from that suit different types of investors
- A common myth among investors is everyone feels one must have many funds to invest in a mutual fund. But the ground reality is that you can start investing in a fund with as small as Rs 500 only.
If you have been investing in National Pension Scheme and waiting for the clarity on the withdrawal norms, here is how much and how to withdraw from the NPS.
As per the guidelines a subscriber can make partial withdrawal for the following purposes:
- For higher education of his or her children including a legally adopted child
- For marriage of his or her children, including a legally adopted child
- For purchase or construction of residential house of flat in his or her own name or in a joint name of his or her legally wedded spouse. In case, the subscriber already owns either individually or in the joint name a residential house of flat, other than ancestral property, no withdrawal under these regulations shall be permitted
- For treatment of specified illness
- The subscriber shall have been in the NPS at least for a period of 3 years from the date of joining
- The subscriber shall be permitted to withdraw accumulations not exceeding 25% of the contributions made by him or her and standing to his or her credit in his or her individual pension account, as on the date of application of withdrawal
- FREQUENCY: The pension regulator has said that a subscriber shall be allowed to withdraw only a maximum of 3 times during the entire tenure of subscription under the NPS. The request for withdrawal shall be submitted by the subscriber along with relevant documents to the Central record-keeping agency or the NPS Trust for processing of such withdrawal claim through their nodal office. However, if the subscriber is suffering from any of the specified illnesses, the request for withdrawal may be submitted through any family member of the subscriber
Being the start of the new year, many salaried individuals are in a hurry to invest their money to save income tax. But don’t jump the gun and avoid these mistakes. Instead make a more informed decision while investing to save income tax.
Source: moneycontrol.com