Growth Option

Most Mutual Fund schemes have a Growth Option and an IDCW (Income Distribution cum Capital Withdrawal) Option. A Growth Option in Mutual Funds does not distribute its profits to the unit holders but reinvests them back in the fund. The power of compounding comes into play here. The NAV of a Growth Option is higher than the IDCW Option. When you need money you can redeem units. You will pay tax on capital gains.

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