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Six Investment Avenues for a cost conscious investor

6 Investment Avenues
for a Cost Conscious Investor

national-pension-system-six-investment-avenues-for-a-cost-conscious-investor

National Pension System (NPS)

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 additional 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-six-investment-avenues-for-a-cost-conscious-investor

ETFs/Index Funds

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

Online Discount Brokers



Online discount brokers are purely online brokerage service providers offering very low cost brokerage accounts, some even at zero cost. 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-six-investment-avenues-for-a-cost-conscious-investor

Online ULIPS

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).

cost-conscious-investor-six-investment-avenues-gold-bonds

Gold Bonds

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-cost-conscious-investor-six-investment-avenues

Direct Plans

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.