The mutual fund is the good one for getting a high return at the end of the maturity period. The users need to pick the best one. You can get different categories in the mutual fund. The dividend reinvestment vs growth comparison is the essential one for the investors who avoid the dividend payouts. The selecting the best category will help you to get high profit.
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What is the difference between the two options?
In the dividend reinvestment option, the financial manager will pick the best scheme for making the deposit for the investors. This means that the dividend amount that is obtained from the scheme is not directly added into the investor’s account instead the fund manager will purchase the more fund units. This reduces the job of the investors and also the fund that is newly purchased will be transferred to the account of the investors. This will give you the chance to improve the number of shares that is available and so the value of the account will be increased.
Whereas with the help of the growth category the investors are allowing the AMC to make the investment of the dividend payment to their account, this will increase the net asset value of the scheme. The dividend category will be the special one for the people when they are making the deposit in the short term liquid funds. This is because the investment in this kind of funds will have the short tenure and so the daily and the weekly basis your dividend payout will be reinvested.
The reinvestment option will be the best one for getting the highest tax slab. This is also good to invest in the debt funds for the limited tenure. The growth option will be the better one for making the more profit even for the long term funds. Both of the categories are similar in case of the repayment procedure. The repayment of the money is directly done in the growth option but in another category, the investment is made as to the dividend by the fund manager. The tax will be deducted from this kind of dividend reinvestment and the so the people will have to choose the best one.
How useful are the instant redemption liquid fund?
The liquid fund is the good one for the investors as they can able to make the deposit at any time they want. This will be a useful one for home to clear any kind of financial problems instantly. The SEBI has introduced the redemption limit for the customers as they can able to get the fifty thousand rupees per day. The liquid funds are less risky and also this will provide a high return at the annual period. Even the people who are not wealthy or want to test this kind of scheme can able to use this liquid fund scheme by investing a hundred rupees. You can able to get the money you want instantly and there is no problem with it.
The many governments and private banks are providing this kind of liquid fund option. Even though you will get the same amount of the return like the fixed deposit this kind of the instant redemption liquid fund is the good one for redeeming the money at any time. Thus you will able to make the money in a limited time without any problem. This will be the best one for new investors who are unaware of the mutual funds. They will not find any risk and also they can able to get the maximum amount in return.
The deposit in the debt and the money market is done with the help of this fund. In both the short term and also for the long term you can able to get the maximum amount in the return. You will get the maximum interest rate than the fixed deposits. You can able to redeem the amount you want and the amount will be credited within two days. You should also have to notice the cut of the time for investing in the liquid fund and this will help you to know about the cut off time.