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Top Blue Chip Funds For Investment 2023 – Up to 18% return in 1 Year

Mutual Funds

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May 12, 2023

Blue Chip Stocks and Blue Chip Funds are widely used in the stock market terminology. You might have also heard about blue-chip funds. Blue Chip funds invest money in the stock of well-established and financially sound companies that have given very good performance in the past.

Blue Chip funds are becoming an attractive investment option. Blue Chip Funds are comparatively safe investment options that can yield returns higher than fixed deposits. If you are new to the stock market and interested to make money with low risk you can opt for blue-chip funds.

What is Blue Chip Fund?

Blue Chip Funds means large-cap funds that invest their corpus in well-established and cash-rich companies. In the Indian context, names like Tata Group, HDFC Bank, SBI, Reliance, Hindustan Unilever, etc are classified as a blue chip.

The primary category of blue chip funds is large cap however as they primarily invest in blue chip companies. Many large-cap mutual funds also include blue chips in their names such as Axis Blue Chip, SBI Blue Chip, ICICI Pru Blue Chip, Kotak Blue Chip, or Franklin Blue Chip.

These types of funds face less volatility. Staying invested in blue chip funds for the long term could help mitigate risks and help generate inflation-beating returns for the long run.

Benefits of Investing in Blue Chip Funds

Blue chip funds offer the following benefits to the investors.

#1 Stable returns

Blue chip companies are typically well-established, financially sound, and have a proven track record of delivering consistent returns over the long term. This makes blue chip funds a relatively safe investment option that can provide stable returns over time.

#2 Diversification

By investing in blue chip funds, investors gain exposure to a diverse range of industries and sectors. This can help reduce the risk of losses that may occur if one industry or sector experiences a downturn.

#3 Long-term growth potential

Many blue-chip companies have a long history of steady growth and innovation. By investing in blue chip funds, investors can potentially benefit from the long-term growth potential of these companies.

#4 Professional management

Blue chip funds are managed by experienced professionals who have a deep understanding of the market and the companies they invest in. This can provide investors with peace of mind knowing that their money is being managed by experts.

#5 Dividend

Most of the blue-chip stocks are high dividend and consistent dividend-paying stocks and that works in favor of the fund holding these stocks. This means these types of funds are likely to generate a better return for the investors.

Top Blue Chip Funds For Investment 2023

#1 SBI Blue Chip Fund

SBI Blue Chip Fund is one of the best-performing funds in 2023. SBI Blue Chip Fund has 93.98% investment in domestic equities of which 67.08% is in Large Cap stocks, 8.79% is in Mid Cap stocks, and 0.81% in Small Cap stocks.SBI Blue Chip Fund has generated 18% returns for the investors in the last 1 year. It is 4 stars rated fund by CRISIL.

This fund is suitable for investors who are looking to invest money for at least 3-4 years and looking for high returns.

Expense Ratio: 1.59%
AUM: ₹35770 Cr
Minimum Investment: ₹5000
Minimum SIP Investment: ₹500
Annualised 3-Year Returns: 27.2%
Annualised 5-Year Returns: 11.03%

#2 Kotak Blue Chip Fund

Kotak Blue Chip Fund is the next-performing fund in the blue-chip category. Kotak Blue Chip Fund makes 98.53% investment in domestic equities of which 74.16% is in Large Cap stocks, 9.1% is in Mid Cap stocks, and 4.04% in Small Cap stocks. Kotak Blue Chip Funds has given 14.5% returns to the investor in the last 1 year. CRISIL has given a 4-star rating to this fund.

Expense Ratio: 1.8%
AUM: ₹5633 Cr
Minimum Investment: ₹1000
Minimum SIP Investment: ₹100
Annualised 3-Year Returns: 25.4%
Annualised 5-Year Returns: 11.52%

#3 ICICI Prudential Blue Chip Fund

ICICI Prudential Blue Chip Fund is next on the list of best-performing blue-chip funds. This fund has given 15.2% returns to the investors in last 1 year. This fund has 89.13% investment in domestic equities of which 79.09% is in Large Cap stocks, 4.78% is in Mid Cap stocks, and 0.33% in Small Cap stocks.

Expense Ratio: 1.63%
AUM: ₹35876 Cr
Minimum Investment: ₹100
Minimum SIP Investment: ₹100
Annualised 3-Year Returns: 27.25%
Annualised 5-Year Returns: 11.75%

#4 Canara Robeco Blue Chip Equity Fund

Canara Robeco Blue Chip Equity Fund is one of the top-performing blue-chip funds. This fund has 95.91% investment in domestic equities of which 75.13% is in Large Cap stocks, and 5.48% is in Mid Cap stocks. This fund has generated 14.1% returns for the investor in the last 1 year. CRISIL has given a 3-star rating to this fund.

Expense Ratio: 1.74%
AUM: ₹9277 Cr
Minimum Investment: ₹5000
Minimum SIP Investment: ₹1000
Annualised 3-Year Returns: 22.97%
Annualised 5-Year Returns: 13.2%

#5 Baroda BNP Paribas Large Cap Fund

Baroda BNP Paribas Large Cap Fund has given very good returns to investors in the past. This fund has 94.43% investment in domestic equities of which 72.34% is in Large Cap stocks, 10.28% is in Mid Cap stocks, and 1.94% in Small Cap stocks. In the past 1 year this fund has generated 14.68% returns for the investors.

Expense Ratio: 2.15%
AUM: ₹1407 Cr
Minimum Investment: ₹5000
Minimum SIP Investment: ₹1000
Annualised 3-Year Returns: 22.55%
Annualised 5-Year Returns: 11.64%

The Critical Illness Calculator: A Misleading Tool That Could Cost You

Health Insurance

Shitanshu Kapadia

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May 10, 2023

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Some insurance providers provide consumers with the Critical Illness Calculator to help them determine how much coverage they could need for critical illness insurance. This insurance is designed to provide financial support for a major sickness like cancer, a heart attack, or a stroke.

The Critical Illness Calculator, multiple experts have cautioned, may be deceptive and cost consumers money. Therefore, this article will describe how the critical illness calculator functions and why it is a misleading tool.

Click to learn about the life insurance calculator uk.

How Does the Critical Illness Calculator Work?

A critical illness calculator is a tool used to calculate the probable expenditures linked to an acute disease. This is how it usually works:

1. The user begins by entering some primary data, such as their gender, age, and whether or not they smoke.
2. The customer then chooses the essential diseases to factor into the computation. Cancer, heart attacks, and stroke are often the most prevalent critical diseases covered, although other conditions may also be.
3. Based on the user’s age, gender, and current smoking habits, the calculator then calculates the risk that they would contract one of the chosen severe illnesses using statistical data and predictive models.
4. The calculator will calculate the related expenditures after estimating the probability of a severe illness. Medical bills missed wages, and other associated costs may be included.

The calculator will also provide the user a rough estimate of the entire cost of a critical illness, which they may use to decide whether to get critical illness insurance or another type of financial security.

Limitations of Critical Illness Calculator

They Provide Estimates Only

Calculators for critical illnesses offer estimates of probable expenditures related to acute disease and are based on statistical models and actuarial data. Depending on a person’s specific circumstances, such as the illness’s severity and where they are receiving treatment, the actual expenses might vary considerably.

Limited Scope

Most critical illness calculators concentrate on a few acute diseases and might not account for all potential expenditures related to a particular sickness.

Lack of Customization

Although some parameters, such as age and smoking status, may be available on critical illness calculators, they fail to account for unique elements that might affect critical illness costs, like pre-existing illnesses or family medical history.

It may Not Account for Insurance Coverage

The individual’s insurance policy, which might significantly influence the expenditures connected with a critical illness, may not be considered by essential disease calculators.

No Guarantee of Accuracy

There is no assurance that the figures presented by critical illness calculators will be correct; they are based on predictive models and statistical data and may not precisely reflect the expenditures connected with a particular sickness.

Factors that Affect the Estimates of Critical Illness Calculator

The actual costs associated with a critical illness can vary from what a critical illness calculator estimates for several reasons, including:

Illness Severity

The expense of an illness depends on how serious it is. Higher expenditures might arise from a more severe illness requiring extensive care and extended hospital stays.

Treatment Type

The cost of a given sickness can also be affected by the type of therapy needed. Some medical procedures, like chemo for cancer, can be pretty pricey.

Treatment Place

The care price might also differ based on the site where it is provided. For instance, the cost of medical treatment may be higher in a large city than in a rural region.

Insurance Coverage

The expenses may also differ depending on the person’s insurance policy, including co-payments, deductibles, and out-of-pocket maximums.

Additional Costs

A critical illness calculator may not consider other costs related to an acute illness, such as nursing care at home or travel costs.

Conclusion

If you’re thinking about getting critical illness insurance, you should do your homework on your alternatives and consult with a competent insurance specialist who can help you determine your needs and suggest the right policy. Additionally, it’s critical to thoroughly study the policy’s terms and conditions and comprehend any exclusions or limits.

The choice to obtain critical illness insurance is ultimately personal, so people should think carefully about their particular circumstances and risk factors before making a choice.

Sending Money at Foreign – Tax Collection at Source Increased from 5% to 20%

Incometax

Shitanshu Kapadia

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May 9, 2023

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Sending Money at Foreign Cost You More. Parents have to shell out more money for sending kids abroad to study. Tax Collection at Source (TCS) for Foreign Remittance is about to grow to 20% from the current 5%.

The Union Budget 2023 proposed to increase Tax Collection at Source (TCS) on Foreign Remittances under LRS (Liberalised Remittance Scheme) from 5% to 20%. The TCS rule is applicable to foreign trips, sending money abroad, and other personal remittances, except for education and medical purposes. This means money sent by parents for living and other essential expenses will now face a TCS of 20%. This new rule will come into effect from Jul 1, 2023. Before the said changes, 5% TCS was applicable on Foreign Remittances above ₹7 Lakhs in a Financial Year.

At present, under LRS, remittances made for foreign education, via an education loan paid abroad, attract a TCS of 0.5 percent for the amount transferred beyond Rs 7 lakh. This will not change going forward either. However, if the source of funding is not an education loan, then money remitted overseas even for education attracts TCS at 5 percent if the amount is above Rs 7 lakh.

Key changes for Tax Collection at Source

Remmitence using Education Loan under Section 80E

If the amount being remitted overseas is a loan obtained from any financial institution as defined in Section 80E. 0.5% of the amount or the aggregate of the amount over ₹7 lakhs in a Financial Year.

Remmitence For Education and Medical

If remittance is for education & medical in that case 5% of the amount or the aggregate of the amounts over ₹7 lakh in a Financial Year.

Remittance for Overseas tour package

Earlier this limit was 5%. This means that ₹5 lakh equivalent of the tour package will incur a TCS of ₹25,000. Once a new rule is applicable this limit is changed to 20%. This means that ₹5 lakh equivalent of the tour package will incur a TCS of ₹1,00,000.

Remittance for all other cases/ purposes

Earlier this limit was 5% of the amount or the aggregate of the amounts over ₹7 lakh. This means ₹10 Lakhs equivalent amount remitted will incur a TCS of ₹15,000. (TCS applied on ₹3 Lakhs, excess of the ₹7 lakh threshold limit @ 5%, will be ₹15,000.)

Now once the new rule is applicable limit is changed to 20% without any threshold limit. This means ₹10 Lakhs equivalent amount remitted will incur a TCS of ₹2,00,000. (Flat 20% TCS will be applicable for all other purposes except Education and Medical.)

In case parents want TCS at 5% they need to provide proofs for education expenses.

Please note that TCS is not a tax by itself. It is just tax paid on the transaction. This TCS can be adjusted against the tax liability of the taxpayer.

Example –

Suppose a taxpayer’s total remittance is Rs 100000. At a 20 percent rate, a TCS of Rs 20000 will apply to the amount. If his tax on the total income is Rs 50000, he has to pay only Rs 30000 and the rest Rs 20000 will be adjusted against TCS balance.

The taxpayer will get a deduction or refund at the time of filing the ITR. However, an increase in TCS means an impact on the cash flow.

How to Save Tax by Investing in Mutual Fund

Mutual Funds

Shitanshu Kapadia

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May 3, 2023

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Investing in mutual funds can be a great way to save tax. Mutual funds are an investment vehicle that pools money from many investors and invests it into stocks, bonds, or other securities. By investing in mutual funds, you can diversify your investments while minimizing risk. In addition, the taxes you pay on your investments can be reduced depending on the type of mutual fund you choose. This guide will explain what types of mutual funds are available and how they can help you save taxes when investing. It will also provide tips for maximizing your returns and reducing risk when investing in mutual funds. With this knowledge, you can make more informed decisions about your investments and enjoy greater financial freedom as a result. Ready to get started? Let’s dive in!

What are the Best Tax-Saving Mutual Funds?

When it comes to tax-saving mutual funds, there are many options available. Each type of fund has its own benefits and drawbacks, so choosing the right one will depend on your financial goals. Generally speaking, ELSS or Equity Linked Savings Scheme funds are one of the most popular tax-saving mutual funds. These funds invest mainly in equities, making them a high-risk but potentially rewarding choice.

Tax Benefits of Investing in ELSS

Investing in ELSS mutual funds can help you save tax under Section 80C of the Income Tax Act, 1961. You can claim annual tax deductions for investments up to Rs. 1,50,000. However, investments exceeding this amount will not be eligible for deductions.

If your total long-term capital gains from equity-oriented mutual funds or equity shares exceed ₹1,00,000 in a year, you will be subject to a 10% long-term capital gains tax on the returns generated from ELSS funds. If you choose the dividend option, the dividends you receive will be taxable, and the mutual fund will deduct TDS at a rate of 10% for resident investors and 20% (plus applicable surcharge and cess) for non-resident investors. However, when filing their annual returns, investors can claim a tax credit for the TDS deducted.

Therefore, ELSS funds can be considered as one of the best tax-saving investment options due to their high return probability and shorter lock-in period compared to other alternatives.

Things to Consider While Investing in ELSS

Goal Setting:

Before investing in ELSS, setting your goals and determining the right asset allocation is important. Do you want to invest for a short period, or are you looking at long-term investments? Answering these questions will help you decide on the right investment option.

Risk Tolerance:

While investing in mutual funds, it is important to consider your risk tolerance level. Mutual funds come with different risk profiles and returns, so make sure that you choose one which suits your needs and financial objectives.

Low Expense Ratio:

Mutual funds often have high expense ratios due to their management fees and other charges. It is important to look for a fund with a low expense ratio to maximize your returns.

Investment Period:

When investing in ELSS, it is important to consider the lock-in period of the fund. Generally speaking, ELSS funds have a three-year lock-in period, meaning you cannot redeem or sell your investment until the completion of this time frame.

How to Choose an ELSS Fund?

Research:

Do your research and familiarize yourself with the various ELSS funds available in the market. Read their performance history, expense ratio, and risk profile to better understand which will suit your needs best.

Compare Funds:

Compare different funds’ returns, expenses, and other factors before making a decision. Also, consider the past performance of different funds to get an idea of how they are likely to perform in the future.

Invest Wisely:

Once you have decided on a fund, begin by investing small amounts at regular intervals over a period of time. This is known as rupee cost averaging and can help minimize losses due to market fluctuations while maximizing returns from your investments.

The Bottom Line

By investing in ELSS funds, you can enjoy the benefits of tax savings while making potentially rewarding investments. Make sure to do your research before choosing a fund, and invest wisely to maximize returns on your investments. With the right strategy and disciplined approach, you can maximize your investment in ELSS funds. Good luck!