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  #1  
Old 19th February 2013, 07:58 AM
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Default UTI (and Birla) Rajiv Gandhi Equity Savings Scheme



UTI is coming up with RGESS NFO with face value of Rs 10 after Govt. announced this RGESS scheme.

What you guys think should we invest in this NFO ?

Also Birla Sun Life is coming up with this scheme.

What you guys think?

Should we lock in lump-sum amount in the above NFOs for a period of 3 years?

Considering the following:

1) have a good mutual fund portfolio through SIP,

2) no tax saving needed as already exceeding the tax limit,

3) Excess PPF limit.

One more thing is this NFO is better than purchasing National Savings Certificate (NSC)?

regards,

Reks
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  #2  
Old 19th February 2013, 10:10 AM
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Originally Posted by reks View Post
2) no tax saving needed as already exceeding the tax limit,
If you are not going to get any tax benefit, why don't you invest in regular mutual funds?

Quote:
Originally Posted by reks View Post
One more thing is this NFO is better than purchasing National Savings Certificate (NSC)?
The two are not comparable.

One is an equity mutual fund, the other is a debt instrument backed by the government.

The risk of investing in equity mutual funds is significantly higher than investing in NSCs.

NSCs come with zero risk as they are form of central government debt.
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Old 19th February 2013, 01:35 PM
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NSCs come with zero risk as they are form of central government debt.
NSCs come with zero risk but guaranteed loss (if inflation and tax are taken into account.)

Risk means uncertainty, more risk more loss/profit.

Zero risk means certainty, but then it can be certain loss or certain profit.
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Old 19th February 2013, 02:03 PM
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In my opinion, you should take risk and lock part of your amount if you have surplus money in RGESS.

This would be better than NSCs if you hold for a long time of period.

I am sure fund managers would try to make it to list above NFO price initially at least.

NSCs give you nothing after inflation (-7-9 %) and tax deduction (-?) .

People in INDIA still will feel that RGESS is better option other than tax saver mutual funds available in market.

Happy Investing !
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