I normally commerce f&o (principally writing) and have capital of just about 10 Lakh. Now I need to park this fund after which pledge for collateral and commerce utilizing that fund. So what are the very best devices the place I can park cash? Devices must be debt oriented and I don’t want this cash for atleast a 12 months so liquidity isn’t an issue though I can let go some bps for liquidity
Possibility 1 : Bharat BondsLiquidity is nice, Yield is best however may be pledged as non-cash part. being Non-cash, you’ll be able to’t make the most of full pledged worth for in a single day positions. Intraday you should utilize full for choice promoting.Expense ratio can also be vey low, if you’re buying from secondary market, you’ll be able to pledge virtually instantly. If you’re purcahsing instantly, say from edelweiss, it could take per week for attending to demat and pledge bla bla bla…Possibility 2 : G-Sec or SGBsLiquidity could be very very low, Yield is determined by the script. (6.5 to 7% simply), may be pledged as money equivqlent part so in a single day/intraday can be utilized for full worth.Possibility 3 : Mutual funds/ETFs/Liquidfunds and so on etcLiquidity could be very superb. yeild varies case to case.
Hope it has helped a bit.I’ve parked 6L in Gsecs. as i wished to make use of for over evening positions additionally.
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Any Gsec to advocate. I additionally considered Gsecs, however confused which one to speculate it as there are hell lot of Gsecs and I don’t know which one is pladgeable. By which Gsecs you’ve gotten invested? What about taxation in GSEC?
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Refer Accredited checklist of Securities at Zerodha. – Google SheetsUnder Money part sheet, All pledge ready G-Secs are listed.
There are G-Sec obtainable that are going to Expiry within the 12 months 2050+, Relies upon up on for a way lengthy you’ll be able to wait… you’ll be able to select…Each Tuesday RBI requires public sale of already issued G-sec. You may apply in COIN or you’ll be able to instantly purchase from secondary market like Kite, Indiabonds, bonds india and so on and so on…
I’ve invested in 738GS2027-GS and bought in kite at premium of 103.45. Successfully i get yield of just about 7%. i don’t wished go for greater than 5 years. so i select that.I purcahsed in kite as i dont wated to attend for 1 week for pledge.
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Nearly 75% hikes are already accomplished(as per estimates market cycles) can put money into medium,long run ,gilt mutual funds
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However need to pay tax on curiosity acquired in Gsecs, proper? As I’m already in highest tax bracket, that can eat lots in curiosity alone. Something extra environment friendly tax clever in order that I can have good return publish tax
For those who’re on the lookout for a purely debt fund, then a medium-term gilt fund makes probably the most sense. Perhaps, purchase the 2027 or 2028 gilt index fund and maintain it till April 2026. You’ll be taxed at 20% LTCG with 4 years of indexation profit, so successfully you’ll be paying little or no to no tax, relying on the returns and inflation index.
For those who’re keen to take extra threat, then a ten 12 months fixed period fund can be considered. Most gilt funds are thought of money equivalents, so that you’ll not have to fret about 50-50 money and collateral necessities in your in a single day positions.
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In case your tenure is 1 12 months – all debt devices are taxable.
To get indexation profit it’s essential to watch for 3 years for Debt. mutual funds.
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Together with gilt funds above which have period threat, in the event you don’t need to take that threat then in a single day(most secure) / liquid / cash market funds can be used. All of them offers you indexation after 3 years holding.
However these funds have low yield, isn’t it? Additionally I don’t know about cash market fund
Please counsel some
The yield curve could be very flat proper now, so even the cash market funds are yielding round 7%, give or take.
In a single day yield is above 6% now so its fairly near long run gilts which for some motive usually are not shifting up. Unfold isn’t that a lot so until you suppose charges will fall, i would favor to not take the period threat. It is determined by what you want, buying and selling returns are way more and taking threat for small yield distinction doesn’t appear value it to me.
I added cash market as a result of another person makes use of them right here ( jason perhaps). They appear just like liquid, from what i keep in mind ( could possibly be incorrect) they make investments and maintain until maturity and so their period retains on decreasing.
Each liquid and cash market could have some small credit score threat too which may present up if say a AAA bond goes to default instantly ( ILFS … ) however thats very uncommon. Proper now, i simply use in a single day for nearly all of my invested buying and selling capital.
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Equally like in a single day fund there may be ICICILIQ- Liquid ETF to park idle funds
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Agreed! ICICI Liquid ETF is the very best in a single day ETF on the market.Low expense ratio as in comparison with Liquidbees and also you get curiosity each month in your checking account.