If a person is seeking for safety and moderate returns from investment, then he should invest in nationalized banks, postal savings or any other funds that provide regular returns. Usually youngsters, who have newly joined a company or commenced a new unit, should preferably invest in such financial returns that provide regular returns. Some co-operative societies or companies may provide higher returns or dividends, but are subject to market fluctuations.
An investor can safely invest in any government scheme because they get regular returns. Usually, a person should wisely decide his structure of investment. He should invest some portion of his income in nationalized banks, post savings or any other government securities to ensure regular rate of return. Some portion should be invested in companies, private banks or institutions to gain higher returns. Depending upon his income, age, market conditions, etc, a person should decide to invest in any scheme.
The gilt funds are usually invested in fixed securities that are issued by the Indian government and hence the investor can receive regular returns. These funds are not subjected to any risks and hence any person any invest in these funds. The rate of return is usually 8% to 10 % depending upon the location.
They are safer than the corporate bonds and also offer higher returns than direct investment. If a person invests in gilt mutual funds, then the person can even avail tax concession. For this scheme, a person should invest Rs. 5000 minimum. The Reserve Bank of India manages these funds and hence any investor can feel safe and secure.
Some of the popular gilt funds are:
Edelweiss Government Sec Fund (G)
The rate of investment is 7.89%. It is an open-ended scheme ideal for investors who want to earn returns from low-risk investment schemes. There are nearly 28 schemes provided by these funds. If this scheme is sold after 3 years from the date of purchase, then the person should pay long-term capital gain tax. Presently, the rate of tax applicable for these funds is 10%.
Aditya Birla SL G-Sec Fund
The rate of investment is 9.23% and it is an open-ended scheme. It provides excellent capital growth to the investors who provide medium term to long-term investment. The minimum investment required to invest in the scheme is Rs, 1000. It is one of the largest fund houses in India.
DSP G-sec funds Direct Plan
The rate of return is 8.7% and is an open-ended scheme with Rs, 500 minimum balances. The period of investment is normally 10 years and a person can withdraw Rs. 500 at a time. This fund provides 5 schemes to the investors.
L&T Gilt edged funds Direct Plan
The rate of return is 8.63%. And is an open-ended scheme. If the funds are sold after 3 years after the purchase date, then the investor should pay tax on long-term gains. The rate of tax is 10% and cess charged is not included. The profit gained from this source should be included in total income at a certain rate.
Usually, these gilt-edged funds are secure and yet provide reasonable returns and a person can acquire profit after 10 years.
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