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In Mutual Funds, bonus option means any income distribution announced the investor will received additional units on the number unit/shares holdings at the close of a period i.e. if the management company announces dividend at 10% at par value, your holding would increase by 10% e.g. if you are holding 100 at close of FY you will be issued additional 10 units and your cumulative holding would be 110 units.

The advantage of bonus is that, since no cash payout has been made the bonus units issued would be exempt from with-holding tax.

Over a long-term period, if one does not require any cash from the fund, the bonus option is considered beneficial since the number of units increases at any distribution, thus causing a compounding effect on the initial investment.

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Q: What does bonus option mean under mutual fund scheme?
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What is the Halsey bonus scheme?

First things first, Halsey is the name of a person (F.A. Halsey). The person who invented the Halsey bonus scheme.In coming up with his bonus scheme Halsey observed the lameness by which employers rewarded their employees. Normally employers would set a time/ a deadline for an employee to finish a given job. Since different employees have different abilities some employees would finish up the the job in a shorter time than the allowed while other would finish well past the deadline and get fired others would mark-time on the job an finish it with the exact time.To help solve this Halsey recommended a bonus scheme which rewards employee based on the time they have saved.ExampleIf the allowed time for a job is 3 hours and an employee finishes the job in two hours, and the rate per hour is $10.Under the Halsey bonus the employee will be paid a bonus based on the 1 hour saved (3-2) on top of his normal wage.Earning= (2 x 10) + 50% x (3-2) 100 =20 + 50 = $ 70


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What is the Halsey bonus scheme?

First things first, Halsey is the name of a person (F.A. Halsey). The person who invented the Halsey bonus scheme.In coming up with his bonus scheme Halsey observed the lameness by which employers rewarded their employees. Normally employers would set a time/ a deadline for an employee to finish a given job. Since different employees have different abilities some employees would finish up the the job in a shorter time than the allowed while other would finish well past the deadline and get fired others would mark-time on the job an finish it with the exact time.To help solve this Halsey recommended a bonus scheme which rewards employee based on the time they have saved.ExampleIf the allowed time for a job is 3 hours and an employee finishes the job in two hours, and the rate per hour is $10.Under the Halsey bonus the employee will be paid a bonus based on the 1 hour saved (3-2) on top of his normal wage.Earning= (2 x 10) + 50% x (3-2) 100 =20 + 50 = $ 70


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