Investors with a 6 to 12 month horizon may consider them. They should align their holding period with the fund's maturity profile and prefer schemes with a lower expense ratio.
NPS Vatsalya offers a disciplined investment avenue that parents can use to create intergenerational wealth by contributing even small sums.
Rediff explains why the system, not the Budget, is the problem.
The Reserve Bank of India (RBI) on Tuesday announced a fresh round of liquidity measures through open-market operations (OMOs) and a foreign exchange buy-sell swap, under which it will inject close to Rs 3 trillion into the banking system. The central bank said it would purchase Government of India securities worth Rs 2 trillion through OMOs, spread across four tranches of Rs 50,000 crore each to be conducted on December 29, January 5, January 12 and January 22.
With deposit growth remaining sluggish and the credit - deposit ratio of commercial banks crossing 80 per cent, banks have ramped up their borrowing in the certificate of deposit (CD) market. In the fortnight ended November 14, CD issuances climbed to nearly Rs 55,000 crore - double the borrowings of the preceding two fortnights and the highest since the September 19 fortnight.
'There are no additional benefits for banks and market participants to use CBDC...'
Officials from both India and the US in the recent past have indicated that a "fair deal" will be concluded soon, with Indian officials holding that more formal rounds of talks are not needed.
'Having a separate healthcare corpus is extremely important even for those already covered by health insurance.'
'Maintain a balanced approach with a preference for short-to medium-duration funds.'
'They are positioned as defensive products and can potentially give marginally higher returns than liquid funds.'
MMFs invest in fixed-income instruments maturing in less than one year, minimising interest-rate risk.
JioBlackRock Asset Management Pvt Ltd, a 50:50 joint venture between Jio Financial Services Limited (JFSL) and BlackRock, on Monday announced closure of its maiden New Fund Offer (NFO), recording a total investment of Rs 17,800 crore ($2.1 billion).
Despite similar tax treatment, debt MFs enjoy certain advantages over FDs.
The Reserve Bank of India (RBI) has extended the trading hours for the interbank call money market from July 1, and that of repo and tri-party repo markets from August 1. Market participants said the decision is intended to help reduce the large Standing Deposit Facility (SDF) balances held by banks with the RBI, thereby addressing liquidity mismatches.
Banks have been borrowing heavily from the Tri-Party Repo (TREPS) market and deploying those funds into the Standing Deposit Facility (SDF) of the Reserve Bank of India (RBI), which is offering higher interest rate than the former, leading to increased volumes in the SDF window. The weighted average TREPS rate was trading at 5.66 per cent on Monday, 9 basis points lower than the SDF rate which currently stands at 5.75 per cent.
'India has the potential to grow at more than 7%, with the monetary policy providing a supportive hand.'
The Indian economy could remain less affected by global trade wars than other countries because the two engines of domestic growth - consumption and investment - are likely to face a limited impact from such headwinds, according to an article on the 'State of the Economy' in the Reserve Bank of India's (RBI's) bulletin, released on Tuesday.
With the RBI infusing Rs 7.5 lakh crore in liquidity -- and possibly more in the future -- the short- to medium-term corporate bond market is expected to benefit.
Debt-oriented mutual funds witnessed an outflow of Rs 6,525 crore in February, a sharp reversal from the strong inflow of Rs 1.28 lakh crore in the preceding month, chiefly due to redemptions in short-duration funds. Notably, 10 of 16 debt mutual fund categories reported net outflow during the month, data with Association of Mutual Funds in India (Amfi) showed.
The Reserve Bank is planning to extend wholesale Central Bank Digital Currency (CBDC) for transactions for interbank borrowing or call money market, sources said on Tuesday. The pilot in the wholesale segment, known as the Digital Rupee -Wholesale (e-W), was launched on November 1, 2022, with the use case being limited to the settlement of secondary market transactions in government securities. "RBI is now planning to go into the interbank borrowing market.
'As the Budget has taken some measures to spur growth, similar action from the MPC may be expected.'
Among the 11 equity sub-categories, thematic funds received the highest net inflows at Rs 9,017 crore, followed by smallcap funds at Rs 5,721 crore and flexicap funds at Rs 5,698 crore.
While liquidity in the banking system has turned surplus in the last few weeks, it could go back to deficit again, mainly due to corporate advance tax outflows. The net liquidity surplus of the banking system rose to touch Rs 1 trillion on Tuesday on the back of government spending, according to the data released by the Reserve Bank of India.
'They are ideal for short-term financial goals like children's education or a down payment for a house.' 'They are also useful for transitional savings, such as during job switches or while starting a business.'
Widespread use of crypto assets, including stablecoins, can have a negative impact on the macroeconomic and financial stability of a country, the Reserve Bank of India (RBI) said on Monday. In its Financial Stability Report (FSR), the banking regulator highlighted that excessive use of crypto assets can reduce effectiveness of monetary policy, worsen fiscal risks, circumvent capital flow management measures, divert resources available for financing the real economy and threaten global financial stability.
Debt mutual fund (MF) schemes are set to register the best calendar year (CY) performance in the last four years despite no changes in the interest rate. An analysis of one-year performance of debt funds show that many of the schemes are set to deliver double-digit returns in CY 2024.
To ease the potential liquidity stress, the Reserve Bank on Friday slashed Cash Reserve Ratio (CRR) by 50 basis points to 4 per cent, a move that would unlock Rs 1.16 lakh crore bank funds. The RBI on May 4, 2022 had raised CRR to 4.5 per cent from 4 per cent in an off-cycle Monetary Policy Committee (MPC) meeting, with effect from May 21 the same year.
Returns of liquid funds are meant only for the short term and don't help investors create wealth over the long term, as equity funds do.
The liquidity will move into deficit after advance tax payments and GST outflows. It will rebound in October because of government spending.
Equity mutual funds witnessed an inflow of Rs 35,943 crore in November, marking a drop of 14 per cent on a month-on-month basis, amid heightened volatility in stock markets driven by various macroeconomic factors, geopolitical events and US election results. Despite this, it marked the 45th consecutive month of net inflows into equity-oriented funds, reflecting the growing popularity of mutual funds among investors, according to data from the Association of Mutual Funds in India (AMFI) released on Tuesday.
MMFs are a good option for the current environment, observes Sarbajeet K Sen.
'The RBI's MPC will maintain the current policy rates (6.50%) at the policy meeting, given ongoing inflationary pressures.'
The Rs 84,000 crore domestic fund of funds (FoFs) space, which was in the doldrums over the past 18 months, has now caught the attention of investors due to a change in the tax structure in Budget 2024. The broader category, which includes offerings across equity, debt and commodities, has seen a spike in the inflows over the past two months. FoFs typically deploy the pooled capital in one or multiple MF schemes rather than investing directly into equities, debt or commodities.
The RBI is fully aware that the high-cost loans and high indebtedness of the borrowers could pose financial stability risks, if not addressed by these NBFCs. Governor Shaktikanta Das has issued a stern warning, saying the RBI is closely monitoring these areas and will not hesitate to take appropriate action, if necessary, if the culprits don't opt for self-correction. Watch out for some action, soon, notes Tamal Bandyopadhyay.
While the minimum holding period for LTCG taxation has now been lowered, the tax outgo could be a bit higher under the new structure.
'Opportunity is there in each segment of the market. There is opportunity in affordable and specifically governed by government initiatives as well as for housing for all.'
Small firms raising deposits in disguise of advances for unknown projects referred to as money market companies in common parlance.
Indian money market liquidity has started picking up in the past few days, likely due to government spending, a senior banking source told Reuters on Friday.\n\n\n\n
The ability of banks to continuously tap funds through the central bank's Liquidity Adjustment Facility lowers their need to raise cash in the markets, which has thwarted the development of a proper money-market yield curve.
The big test will come at the end of March when the fiscal year ends and banks tend to hold on to cash.
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