Related Questions
What about Taxes applicable in the Growth Option versus the Dividend Option in Mutual Fund schemes?
How should I choose between the Growth and Dividend Option of Mutual Fund Schemes?
How do I look for schemes with Dividend options?
Should I not choose the Dividend Option if I need regular cash flows from the investment?
Which Mutual Fund should I invest in?
Why is the Growth Option better than the Dividend Option for Mutual Fund schemes?
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fund data
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Answer
The growth option reinvests the gains over and over again and the returns are compounded, resulting in higher proceeds at the time of maturity.
In the dividend payout, you lose on compounding returns, as the dividend you receive is not re-invested either by the scheme or the investor. The dividend payment doesn't assure payments if the fund fails to generate any surpluses.
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