What happens when you switch from one mutual fund to another?

Capital Gains Tax Since switching from regular funds to direct mutual funds is considered as a new investment, the switch can attract tax on capital gains. The applicable taxes can also vary depending on the type of capital gains i.e. long-term or short-term capital gains.

Can you transfer money from one mutual fund to another?

Investors switch their investment from one open ended scheme to another within the same fund house for better financial planning. To switch within the same fund house, fill up a switch form specifying the amount/no. of units to be switched from the source scheme and name of the destination scheme.

What fees are associated with mutual funds?

Mutual fund fees generally fall into two big buckets:

• Annual fund operating expenses: Ongoing fees toward the cost of paying managers, accountants, legal fees, marketing and the like.
• Shareholder fees: Sales commissions and other one-time costs when you buy or sell mutual fund shares.

Is transferring mutual funds taxable?

If you move between mutual funds at the same company, it may not feel like you received your money back and then reinvested it; however, the transactions are treated like any other sales and purchases, and so you must report them and pay taxes on any gains.

How do you transfer mutual funds?

To transfer your mutual fund and other investment holdings, set up a new brokerage account and complete the account transfer request form. The transfer form will ask you where your mutual fund shares are held, at the brokerage or at the mutual fund company.

Is transfer of mutual fund taxable?

At the time of transmission, no tax is involved. “Transmission of mutual fund units refers to transmission of units to the nominee and/or the surviving unitholders after the death of the unitholder.

What is the difference between SIP and STP in mutual funds?

Generally, SIP is chosen by investors who want to achieve a particular investment objective. On the other hand, STP is preferable for investors who have excess idle money in their account. Also, these investors are reluctant to invest entire money at once.

What is STP Systematic Transfer Plan (STP)?

STP Systematic Transfer Plan is where an investor can transfer money from a mutual fund scheme to another scheme. However, one can transfer money from one scheme to another of the same mutual fund house and not of other fund houses. STP helps investors in transferring systematically and periodically.

What is a mutual fund switch and how does it work?

When you decide to move your whole investment or some part of it from one mutual fund scheme to another, it is called ‘switching’. In this case, you are moving funds within the same fund house.

What is an exchange fee in mutual funds?

A mutual fund can impose an exchange fee when a shareholder exchanges shares in one fund for shares in another fund within the same fund family. An exchange is a taxable event, which means that the investor can be liable for any capital gains on the sale/exchange of the shares as well. 3