Does doing SIP gives back lumpsum Money ??

[msivask]

Hi Friends

I have been investing in SIP with as much research as I can do to invest in good funds and my intention is to keep investing in longterm for different long term Goals . Going through some of the blogs/threads here I am worried whether it really makes sense .

Here is my query

I start investment in June 2003 for a period of 3 years at 2000 Rs per month . I was under the impression that at the end of June 2006 I would get atleast 80K ( assuming 13 % interest ) . But i got to know that in June 2006 I will be eligible to take out only the number of units I bought for Rs 2000 in June 2003 and every month thereafter the units for Rs 2000

I am wondering how does this help in achieving long term goals ...

Please help me understand ..

Thanks
Siva M

 

[yodlee99]

Can you post which funds did you invest in? From your description, it looks like these funds have 3 year lock-in period (eg., ELSS funds or tax saving funds). If this is the case, the SEBI rules stipulate a 3-year mandatory lock in period. I guess you can sell within 3 years, if someone is ready to buy, but at the same NAV that you bought it = 10Rs... is that right?

For general diversified funds, there is no such rule. You should be able to buy and sell anytime.
For most people, one consideration for selling within 1 year is the short term capital gains tax. This is also about to change with the new DTC coming up in Apr 2011. Lets see what Pranab da has to say next.

 

[msivask]

I have DSP Top 100 , HDFC Equity and HDFC TOp 200 funds and when I bought it through ICICI direct , I mentioned a period of 3 years

 

[rajivnc]

I have DSP Top 100 , HDFC Equity and HDFC TOp 200 funds and when I bought it through ICICI direct , I mentioned a period of 3 years

All the three funds are NON ELSS funds. you can redeem those units at any time. There is no lock-in period for these funds. I think someone is trying to cheat you. Ask him to show the clause in the offer document.

 

[URPradhan]

Do not be confuse. If you have invested in the non-ELSS funds then you can REDEEM the part/whole units from your portfolio. And as you said you had subscribed through ICICI direct, its easy to redeem. Goto Mutual Fund -> Unit Foldings -> Redeem -> Select the radio button for "ALL". Thats it.

 

[msivask]

Thanks a lot friends :clap:

.. I am a lot relieved now . I do not plan to go for ELSS .. I have sufficent plans for tax coverage already and I do not want to link my investment plans with tax plans ..

Thanks to your help , Now I can safely take my next step ..:thumb:

pls have a look at my thread and post your valuable suggestions

http://www.traderji.com/mutual-funds-discussion-forum/43587-planning-my-personal-finance.html