Short answer: an IDCW payout is not income the fund gives you on top of your investment. It is your own money handed back to you. On the day it is paid, the fund’s NAV drops by exactly the payout amount, so your total wealth does not move by a single rupee. You are no … Read more
Short answer: a new fund offer priced at ₹10 is not cheap, and buying one because the NAV looks low is a mistake. A ₹10 NAV and a ₹500 NAV are identical in value. You just get more units of a smaller size, which changes nothing about your returns. Worse, an NFO asks you to … Read more
Short answer: there is no best date to start a SIP, and any page that promises you one is selling a myth. Long-term backtests across decades of Indian market data all reach the same conclusion. The gap between the best and worst SIP date is around 0.07 to 0.15 percent, which on a ₹12 lakh … Read more
Short answer: education in India inflates at roughly 10 to 12 percent a year, about double the 5 to 6 percent general inflation most people plan with. That gap sounds small, but over 15 years it is the difference between a ₹48 lakh target and an ₹84 lakh reality. Plan your child’s degree at 6 … Read more
Short answer: missing one SIP installment is not a disaster, but it is not free either. Your mutual fund charges you nothing, and your existing investment is completely untouched. The only direct cost is a small bounce fee from your bank, usually ₹250 to ₹500. The two things that actually matter are the rule most … Read more
Short answer: an RD is safer, but a SIP builds far more wealth, and the gap widens sharply once you account for tax. At a 30 percent slab, a recurring deposit paying 7 percent returns only about 4.9 percent after tax, which barely keeps up with inflation. A SIP targets around 12 percent and is … Read more
Short answer: a step-up SIP does build a bigger corpus than a flat SIP, but not for the reason most people think. It wins because you invest much more money, not because each rupee works harder. In fact, each rupee works less hard. Measured by gain per rupee invested, a flat SIP returns about ₹3.16, … Read more
Short answer: redeeming a SIP early costs you twice, and most people never see it coming. First, an exit load, usually about 1 percent, is charged on any units you have held for less than a year. Second, those same recently bought units are taxed as short-term capital gains at 20 percent instead of the … Read more
Short answer: for regular income from mutual funds, an SWP is far more tax-efficient than the dividend (IDCW) option, and it is not close. An SWP taxes only the small gain portion of each withdrawal, while the dividend option taxes the entire payout at your income slab rate. In a representative 15-year example, an equity … Read more
Short answer: CAGR and XIRR are both correct, but they measure different things. CAGR is the right return for a single lump sum that goes in once and comes out once. XIRR is the right return for a SIP, where money goes in on many different dates. Your statement and your SIP calculator seem to … Read more
