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I have invested more than 10000 last year in ELSS and it was accepted as tax saving by the IT Dept.

Options in MF:

Dividend:
Dividend Payout: Based on the Fund's performance, the fund manager decalres a dividend (can be at any time of the year, most of the them decalre during Dec-Mar of every year). This dividend amount is payed out to the unit holder based on the percentage declared on the face value of the unit.
For eg: If XYZ holds 100 units of ABC fund which has a face value of Rs.10 & if ABC Fund Manager declares 60% dividend. Then XYZ gets a cheque of (no. of units * face value)* (60/100) = [(100*10)*(0.6)] = Rs.600/-

Dividend Reinvestment: The dividend amount declared (as per above calculations) is used in buying more units at the current NAV and adding the units to the existing units of the unit holder. So, Rs. 600/- worth of units will be added to the current units (100 units) of ABC in this option.

Drawback of dividend option: Since the profits from the fund are moved towards the unit holder, the NAV rises at a slower pace in most cases.

HDFC Long Term Advantage Fund-Dividend - NAV as on 22 Jan: 41.48 (60% dividend declared for 2 consecutive years)
HDFC Long Term Advantage Fund-Growth - NAV as on 22 Jan: 95.28

(Source for NAVs: www.amfiindia.com)

Growth option:The profits remain with the fund manager and are added to the corpus (money collected from unit holders) and therefore can be invested further. More money is invested and hence the NAV grows faster.

Which one? Growth or Dividend?
I have been told that there is no thumb rule for this, but most of the consultants say:
Short-term investments: 1-3 years, go for Growth option
Long-term investments & ELSS: 3+ years, go for Dividend option

I have followed the above mantra and have found it give good results.

Any idea why one would be better than the others. I thought dividend is when you want some regular income right ?

Dividend is the option when you want regular income - Provided the dividend is regularly declared!!! There is no guarantee that the dividend will be declared.
For eg: I own units units in Franklin India bluechip fund for a long time now. See how erratic their dividend declarations are!
Fund inception year: 1993
DateRate of DividendJan 24, 2006 30 % Jan 19, 2005 25 % Feb 3, 2004 20 % Jul 30, 2003 20 % Mar 18, 2002 10 %
(Source: Mutual Funds India=)

They are yet to declare a dividend in 2007.

Can anyone tell me if one were to purchase a MF from CAMS, to whom and how is the payment for Entry load made ? And do they give proof of investment immediately or does it take time?

My investiment in Mutual funds and LIC/FD/RD etc

Very rarly in real estate

People who invested in the shares 2 years back when sensex was 8000 have really benefited. However the continued levels of Sensex may be hard to sustain. SIPs are also fine as cash withdrawal is easiest.

For Risk takers - Equity investments are best
For conservatives - SIP and Mutual funds along with Tax saving schemes are best
For Rest - A good combination of all schemes is also good. Probaby this is preferred for everybody.

I am looking for a flexible investment option.
Most SIPs etc., turn me off because for this I want something which is low risk.
Another problem is fixed amount.

Every month, savings are different. Some months you may save a lot, and some months none.
I was thinking of putting Savings in 1 year FDs at 10% interest, but then tax problems etc., crop up.

So needs are simple
1. Low risk
2. More return than FD
3. Tax benefit(long term)
4. Variable amount/month, some months I can put nothing.
5. After 3 years I should be able to withdraw whatever I want.

Do pour in your suggestions!

^^
Except for point 5, all requirements are filled by PPF.

a) assured 12.85 % pre-tax returns if you fall in the highest tax slab

b) 100% guaranteed by the Govt. of India,

c) tax rebate while investing, and

d) last but not the least, the returns are tax-free.

It's stocks and mutual funds for me. It all equity for me now and very little debt in my portfolio. Probably, this will start changing in the next 5 years, when I will be close to certain milestones.

Other than PPF, not many options for a regular, safe and tax-free savings scheme. SIP is a good option if you choose the MFs wisely (mix of equity, debt funds).

PPF has a max. investing amount capped at 70000 Rs. per financial year. Which is way too low in today's scenario.

Looking at the present sensex levels, is it wise to enter into ELSS or ULIPS for income tax saving.

I am inclined towards investing about a lakh in ELSS for IT deduction under section 80cfor the next financial year.

Since there is a 3 year lockin period, would it yield a better return than a fixed deposit at the end of 3 years. I know there is a bit of risk invloved but can i take a plunge.

What are the promising mutual funds that one would recomend.

thanks..

You can never know. ELSS+term insurance is ANYDAY better than a ULIP

I feel better to put in some fixed instruments like FD(5 years return 8 to 9 %), PPF( need to open account with Post Office or SBI Return 8.5% last year and gains TAX free), NSC(fixed returns 10K turns to 16.5K in 6 years). Some amount you can put in TAX Saving MF. Check http://www.valueresearchonline.com It may help you to some extent

ULIP is very costly. During the first installment, they deduct like 25% for charges alone. Dont blindly buy into it.