Jan 01, 1970 2 min read

RBI Cuts Repo Rate: How to Make the Most of It?

With the change in the repo rate as announced by RBI on Tuesday Oct 4, 2016, there are major changes in the economy. Read this blog to know how mutual funds have been benefited with the changes and how you can make the most of it.
Now, when Reserve Bank of India has liberalised its policy by cutting the repo rate by 25 basic points, the question in everyone’s mind is regarding the benefits they would fetch from this change. So, are you ready to avail the best advantage of this rate cut by investing your money in the mutual funds?

The rates prevailing in the market have a direct impact on the debt mutual funds. So, now, when the repo rate, i.e., the rate at which RBI lends loan to other banks has been reduced, let’s take a look at how we can make the best benefit out of it.

The debt funds benefit from the reducing rates because there is an inverse relationship between the yields and the prices of securities. When the yields fall, the prices of securities go up, and ultimately benefit the investors as they would be able to make more money. In addition, the low-interest rates shall boost up the economic activity leading to enhancing the profits of the companies, which shall result in growing up the monies of investors, put in the stocks of such companies.

The investors in the mutual funds have a lot more to make in the upcoming months as has been observed by the experts all around. It's not the first or the last time of fluctuation; RBI is focussed on benefiting the society in the long run and indulged in the process of making much better policies for the coming years. So, you need not worry if you could not take the benefit instantly. Instead, you must opt for the debt fund schemes to make an investment now so as to gain higher profits in the future. If RBI cuts the rates further, which is expected by everyone around, the yields shall fall more, resulting in a tremendous profit for everyone.

Furthermore, if you consider investing in the long-term debt schemes now, you would be able to generate higher returns with the change, and in case the rates are not reduced in the future, you shall at least be in a position of earning regular returns. Hence, you shall be on the safe side in both the parlances. In addition, for an investment made for at least three years, shall also offer the tax benefits as the added advantage. So, do not wait now, instead take the right action to captivate the best benefit of RBI repo rate change.

Moreover, never forget to be focussed as we know very well that if we take the benefit of market rate changes, we need to be attentive for all the further fluctuations so that we do not lose our money at any cost.

We, at MySIPonline, are ready to assist you in the best manner and can assure you that you shall definitely be benefited with the fluctuating returns if you put your money in the mutual funds now. So, do not wait for any other news, but take the right decision now.

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