8. Mutual Funds Vs. Other Investments Product Return Safety Liquidity Tax Benefit Conven- ience Bank Deposit Low High High No High Equity Instruments High Low High or Low No Moderate Debentures Moderate Moderate Low No Low Fixed Deposits by Companies Moderate Low Low No Moderate Bonds Moderate Moderate Moderate Yes Moderate
9. Mutual Funds Vs. Other Investments Product Return Safety Liquidity Tax Benefit Conven- ience RBI Relief Bonds Moderate High Low Yes Moderate PPF Moderate High Low Yes Moderate National Saving Certificate Moderate High Low Yes Moderate National Saving Scheme Moderate High Low Yes Moderate Monthly Income Scheme Moderate High Low Yes Moderate
10. Mutual Funds Vs. Other Investments Product Return Safety Liquidity Tax Benefit Conven- ience Life Insurance Moderate High Low Yes Moderate Mutual Funds (Open-end) Moderate Moderate High No High Mutual Funds (Closed-end) Moderate Moderate High Yes High
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15. Fund Structure Fund Sponsor Trustees Asset Management Company Depository Custodian Agent
34. Public Provident Fund (PPF) Features: 1) Rate of Interest 8% compounded Annually. 2) Minimum deposit is 500/- & Max Rs. 70,000/- in a financial year. Pros Cons 1) Lowest Risk Possible 1) Interest rates change. (12% to 8%) 2) Tax Rebate (20% under Section 88) 2) Lengthy lock-in period. (15 yrs/16) 3) Great Returns (8% compounded) 3) Interest calculated on lowest balance. (5 th to last date) 4) No tax on interest (sec 10(11) income tax) 4) Lack of Liquidity. 5) Flexibility of Investment. (max Rs.60k, min Rs. 500) 6) Exempt from wealth tax
