Topic: Post office savings into mutual funds?

This message was edited 1 time. Last update was at 04/07/2008 11:17:36

Should I invest my savings placed in Post Office monthly investment scheme since 2004 into mutual funds?

Typically, post office mis gives you an interest of 8%. Premature closure of the account is permitted any time after the expiry of a period of one year of opening the account. you can withdraw money before three years are completed, but a discount of 5%. closing of account after three years will not have any deductions.

Post office MIS has many tax advantages like the interest income accruing from a post-office mis is exempt from tax under section 80l of the income tax act, 1961. Moreover, no TDS is deductible on the interest income. And the balance is exempt from wealth tax.

I would suggest that you consider withdrawing from the MIS only after considering the implications on your personal tax liability and the risk that you are willing to take on the principal amount.

If you are in the lower tax bracket and are indifferent on the taxes and have a long term horizon on your investment you can consider investing in mutual funds through a SIP.

Learn more about mutual funds in India

I really appreciate you for sharing this information...........Hoping you will be there with more updates on tax savings and SIP.

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