India First Free Online Financial Advisory, India First Free On-call Financial Advisory, Best Free Financial Advisory

India First Free Online Financial Advisory, India First Free On-call Financial Advisory, Best Free Financial Advisory

Healthy Portfolio:

High fund management costs can eat into returns. ET Wealth lists six cost-effective alternatives that can help create a healthy investment portfolio.

  • National Pension System (NPS)

NPS offers a low cost retirement savings vehicle with a flexible investment pattern. Further investing in NPS makes you eligible for tax deduction up to 10% of salary (basic + DA) under Section 80 CCD (1) within the overall ceiling of Rs 1.5 lakh under Sec 80CCE. Besides you can also avail an ddditional deduction of Rs 50,000 under Section 80CCD (1B) a year.

How much do you pay?
Lowest fund management fee (0.01%), apart from other charges.

  • ETFS/Index Funds

ETFs are freely tradable like shares while index funds are not. These are passively managed mutual funds with underlying portfolio mirroring the components of a broader market index. They aim to mirror the performance of the benchmark index.

How much do you pay?
Cost is a fraction of actively managed funds. For Index funds it is as low as 0.11% per year while for ETFs it is 0.05% per year.

  • Online Discount Brokers

Online discount brokers is a purely online-based brokerage service providers offer no-frills trading facilities. They leverage technology to deliver services at fraction of cost of traditional brokers.

How much do you pay?
As low as ZERO on delivery based trades, flat Rs 9-Rs 20 per transaction on intra-day/futures & options trades.

  • Online ULIPS

Online ULIPS can help you save on agents’ commission, which are passed on to policyholders in the form of nil or lower premium allocation and other charges. There are limited charges apart from fund management fee which means almost entire premium gets invested unlike in traditional Ulips. How much do you pay?
Lowest cost of 1.35% plus mortality charges. In some cases, additional premium allocation charge and policy administration charge apply (lower than offline Ulips).

  • Gold Bonds

Gold bonds fetch periodical interest income on the principal amount and are completely exempted from capital gains tax if held till maturity. Government issues these bonds denominated in grams of gold, with returns linked to gold price.

How much do you pay?
No exit load or fund management cost. Demat account charges (if bought and sold in secondary market) as applicable.

  • Direct Plans

Direct plans allow investors to bypass the intermediary and buy directly from the fund company and thus save on commission expense. Over time, direct plans yield better return as costs are lower. NAV of the direct plan is different from the regular plan, as latter’s NAV is calculated after including commission expense in expense ratio.

How much do you pay?
Up to 2% less than regular plans.

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