Article

Dividend Option
June 07 , 2012

In dividend option of mutual funds, any rise in value of the fund is removed from the fund and assigned for payment to the investor. They may be actually paid out, or may be ploughed back into the fund. If paid, this transfers the gains to the investor. It is called as Dividend Payout option. If not, it is reinvested in the fund and is called Dividend Reinvestment option.

The payout option is somewhat like periodically going to the bank and taking out your interest earned. In either case, you are very likely to spend it, so you may not want this option unless you really need the money! It seems bizarre as to why you would take the dividend and put it back immediately in the fund (reinvestment), but there are a few practical reasons for this, quirky tax laws being one of them.

Fintotal Knowledge the best place to learn more on personal finance.

The language is simplified and written specially for non finance background individuals.


Explore more in a easy manner.

Table of Contents

Table of Contents

  • No Article Listed
  • No Article Listed
  • No Article Listed
  • No Article Listed
  • No Article Listed
  • No Article Listed
  • No Article Listed
  • No Article Listed
  • No Article Listed
  • No Article Listed

Get the all financial products under one roof only at

you will NEVER GO WRONG with us!

Unbiased . Best Deals . Appropriate Products . No Mis-selling