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IDBI PRINCIPAL Introduces AEP


IDBI PRINCIPAL has introduced an AEP (Auto Earnings Payout) option in its Income and Government Securities Funds namely IDBI PRINCIPAL Income, IDBI PRINCIPAL Income STP, IDBI PRINCIPAL GSF Savings, IDBI PRINCIPAL GSF Investment and IDBI PRINCIPAL Monthly Income Plan.

The amount of outgo (redemption) under the AEP would be close to the dividend declared in the respective scheme. The payout would be calculated by applying the dividend rate (in percentage) declared in the Dividend Plan to the outstanding investment value at his credit. While under SWP (Systematic Withdrawal Plan) the amount of withdrawal is fixed, redemption under AEP is linked to the dividend declared and hence there is no possibility of the payout being more than the appreciation. And no exit load will be applicable on the payouts through AEP.

The AEP option will be effective from July 2, 2002. And there will be no separate NAV for the AEP option, the growth plan NAV will be applicable to the AEP option.

This is in response to the changed tax structure proposed in the Budget -- dividends from Mutual Fund are now taxed in the hands of the investors at the marginal tax rates applicable to them.