Liquid funds - exit loads

[gourimaya]

Hello Friends,

I have some money which I like to park somewhere for a month. If I invest this amount in a liquid fund for a month, after deducting exit loads will there be a any net gain ?

 

[sanjosedesi]

I have some money which I like to park somewhere for a month. If I invest this amount in a liquid fund for a month, after deducting exit loads will there be a any net gain ?

Liquid funds usually do not have an exit load, although it might vary from fund to fund. Some good liquid funds have returns in the range of 8-9%, so if you keep it for 1 month, you should get about 0.8%. If they really have exit load, you end up losing money. Check the prospectus and apply.

 

[gourimaya]

Thanks for your reply.

I have one more small question.
Short term capital gain Tax applied to Liquid funds also ?

 

[asterix24]

Thanks for your reply.

I have one more small question.
Short term capital gain Tax applied to Liquid funds also ?

I am not sure if Liquid Funds qualify for STCG. For any equity or equity based instrument to be called a Capital Gain, there is a minimum of 70% allocation in equity required.

Liquid funds don't have this luxury and hence, I feel that your gains will be added to your income.

Happy Investing !!

 

[sanjosedesi]

Yes Liquid funds will require full regular income tax.

 

[bpr]

In LIQUIDBEES I always see the price as 1000.0 how to do profit in it?
Can somebody put some light in to it on how it works??
I heard that all extra money in your account should be parked in LIQUIDBEES

 

[sanjosedesi]

In LIQUIDBEES I always see the price as 1000.0 how to do profit in it?
Can somebody put some light in to it on how it works??
I heard that all extra money in your account should be parked in LIQUIDBEES

Even though it is a liquid etf, I would not call it a fund ! The difference being that liquid bees is traded on exchanges but liquid funds go through the mutual funds route ... IMO. Liquid bees transaction will incur both side brokerage, STT and what not ... Please do check those before you park your funds there for a short term.
Liquid bees value is always 1000, but they give you partial units everyday upto 3 decimal places so your capital grows as a result of these partial units. I heard that y ou can only trade full units so any partial units are waste unless you are keeping a large amount of money in liquid bees.

Yes, you should put the 'extra' money in a liquid funds, but you need to figure out what your cash needs and keep at least that much in trading account. If using liquid bees, and after counting a loss because of transaction costs, it does not make sense to use it for less than a month, if that. Liquid funds through mutual funds route through your bank ... Keepi g it even for 3 days might be worth it, but if your bank gives 6 percent, then that's almost equally good as it saves 2 days of processing time (1 day inward, 1 day outward)

 

[bpr]

But I heard brokrage and transaction cost is waived off for LIQUIDBEES.
Somebody please clarify who uses LIQUIDBEES.

 

[sanjosedesi]

But I heard brokrage and transaction cost is waived off for LIQUIDBEES.
Somebody please clarify who uses LIQUIDBEES.

Just incidentally I bought liquid bees on Friday for the first time, and my contract shows brokerage, service tax and other charges (which I think is stamp duty). This is a new account (to separate different trades) and I probably should read its terms and conditions, but I think the broker is going to charge his cut !!

 

[sanjosedesi]

http://www.traderji.com/equities/35362-ask-etfs-indexing-queries-here-2.html#post390525

Actually check the above link. Might depend on the broker.