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POSTED BY ON April 8, 2012 1:49 pm COMMENTS (12)
I have 1 lac in my savings account(SBI Savings Plus with 9.25 % interest). I need it after 2 years for personal use. Shall I keep it in savings plus account or invest in FD or some other risk free investment scheme? please suggest.
Can i create multiple FDs say of 30 K each so that return is tax free?
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@ Vaibhav
Check out this article..
http://jagoinvestor.dev.diginnovators.site/2011/03/auto-sweep-bank-account.html
Whats a sweeping FD account?
I hav approx 2 lakh Rs, n want to invest. Can anybdy please suggest me to where to invest it for 1 to 2 years n get max out of it?
Possible but extremely unlikely. The more likely scenario is that you will get wiped out.
Schwab and the other large companies have safe and secure places to purchase secured mutual funds without big risks. Look at their stats to see how much they have fluctuated and any associated costs.
SBI is the Best Mutual Fund to invest.it will good returns on your investment.
Interest from FDs would be taxable. However, if you are in 0% of 10% tax bracket, then the best instrument to invest is FDs for 2 year period in multiple denominations.
@ Ashal – the interest on saving bank account would quickly drop based upon the market interest rates. Hence it may be a good idea to invest into FDs.
Regards
BFA
Dear BanyanFA, the money is already in to FDs. SBI’s Saving Plus account is a Sweeping FD account. That’s why I asked to stay put.
Thanks
Ashal
AB,
Its not worth taking the pain of maintaining several FD’s. The best option i can think of is, invest the amount in your parents name.
If you are in lower tax bracket. LVB is best options among banks.
Dear AB, you are already earning a good interest on your saving plus account, where is the need to go for elsewhere? If you are making 30K FD in the same bank (even if in different branches), the TDS ‘ll become applicable as your PAN ‘ll be there to track your investment with the same bank.
In case to ‘avoid’ (I’m using the word ‘avoid’ & not ‘saving’) Tax, you are opening multiple FDs of 30K Rs. in different banks. my dear friend, it’s not tax saving but avoiding of Tax. In case your practices are deducted by Income Tax people, you w’d have to pay a penalty along with the due tax.
If you are in 10% slab, FDs are better than Debt MFs. For higher Tax slabs, you may opt Debt funds.
Thanks
Ashal
If you are in the 10% tax bracket or lower go for FDs. If in 20% tax bracket and above opt for liquid / short term funds as suggested by cpdhutdmal and opt for, say, monthly or even annual dividend option to make it tax efficient.
Breaking FDs into 30000 each is not going to help you as the total tax outgo is going to be same in both ways.
If you require money after two years, i think it is better to keep the same in some liquid / short term funds as the rate of returns is comparable with FD rates and is more tax efficient.
Keeping the same in FD is also okay considering the fixed rate of returns and high rates offered by banks now.