Dear Investors,
It’s a known fact that Bank FD’s are safe and provide assured returns. Equity markets provide much higher returns, but they come with much higher risks. How about investing in a product, which gives you assured returns, protects your capital and gives you the additional benefit of enjoying Nifty 50’s positive returns?
Well, we at Richvik, are glad to launch an FD- beating product for our low-risk bearing clients, with assured returns of 6 p.a. and complete protection of your principal amount.
What is the product about?
This product, launched by Edelweiss and supported by State Bank of India, aims at providing a fixed minimum return of 6% p.a. to the investors, with assured capital protection.
What is the benefit here?
The best part here is, the Investments are market linked i.e. linked to Nifty Index. The Investor gets returns at par with Nifty returns, with minimum 6% p.a. So if Nifty Index performs well, you get 100% of the growth value. In the past 3 years, Nifty Index has given a growth of 22.30% p.a. There are chances of Nifty index performing equally well in the future, thus resulting your investments providing you a return of much more than 6% p.a.
How are the returns taxed?
The added benefit here is the TAXATION benefit. The coupons received at 6% p.a. are taxed at flat rate of 10%. Thus if your income falls under the 20% of 30% tax bracket, this product will help you save your taxes to a lot extent.
Is there any Lock-in?
Yes, there is a lock-in period of 36 months, and 6% p.a. coupon would be received every year till the end of the product or till the maturity of the product.
Thus, to summarize, we can say the product has following benefits-
- Fixed Annual Returns @ 6% p.a. (Minimum),
- Assured Capital Protection,
- Flat tax rate of 10% on gains,
- Returns can be equivalent to Nifty Index (which has provided 22.3% p.a. in the past)
- Minimum Investment value- Rs. 25 Lakhs.
- Monthly reports would be sent to the client to track the performance.
- Low liquidity of investments, however, in urgency, interim exit can be facilitated.
- At the end of 36 months, if Nifty returns are below the fixed returns of 6%p.a., then fixed returns of 6% p.a. are paid out for all the three years.
The following table will help us understand this product better:
| PARTICULAR | FIXED DEPOSITS | DIRECT EQUITIES | CAPITAL PROTECTED EQUITY WITH FD RETURNS |
| ISSUER | Banks- AAA Rated | Not Applicable | Edelweiss- AA rated |
| FIXED YIELD PRE-TAX P.A. | 6.5% -7.25% | Not Applicable | 6.00% |
| CAPITAL PROTECTION | Yes | No | Yes |
| UPSIDE | Not Applicable | 100% | 100% |
| TAXATION | 30% | 10% | 10% |
| FIXED YIELD POST TAX P.A. | 4.5%-5.10% | Not Applicable | 5.30% |
| TDS | TDS applicable | No TDS | No TDS |
| SECURITY | Upto 1 Lakh | Not Applicable | Collateral up to 100%Principal+ Product return; is kept with an independent Trustee |
Thus, we at Richvik, strongly recommend our investors to invest in this FD beating product, for a long term horizon, so as to have maximum benefit of safety and assured returns.
To know more about this, feel free to contact us at Richvik.