Save entry load on SIPs

Beginning August 1, 2009, the Securities and Exchange Board of India (Sebi) has said, there will be no entry load for any mutual fund scheme and the upfront commission to distributors will be paid directly by the investor.

Did you know you could be still paying an entry load even after Aug 1, 2009?

Here’s how — if you started investing via systematic investment planning (SIP) before Aug 1, 2009 then you will be paying the entry load on each SIP amount every month even AFTER Aug 1, 2009 till the term end of your SIP. Most funds deduct an entry load of 2.25% on each SIP installment.

Now, no one told you about this, right? Hmm, well there’s a way to handle this to ensure that you could still continue with SIPs but do away with the entry load.

You simply could stop your existing SIPs and start fresh ones so they can figure in the “registered on or after August 1, 2009″ category.

However, have a word of caution here — Look at what are the conditions and clause before stopping the SIP — whether there is load for withdrawing or minimum number of SIPs to be invested.

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Author: Austin Comments: 0 comments Date: 15 Aug 2009
Categories: Mutual Funds Tags: , ,
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