Can SWP+SIP be an alternative for Bank FD?

POSTED BY Shailesh Mukund Bhuskute ON March 27, 2012 1:09 pm COMMENTS (2)

Hi

Is it advisable to invest lump-sum amount (say rs 100000) in SWP plan and start SIP from the withdrawn amount on monthly basis.
I did calculation of using one onlint tool (http://www.mutualfundsindia.com/swp_calculator.asp). I found that using this method 15% return can be generated.

My risk profile is medium. I a looking for alternative for Bank FD. Tenure is 1 year.

Thanking you in anticipation.

Best Regards,
Shailesh

2 replies on this article “Can SWP+SIP be an alternative for Bank FD?”

  1. Dear Shailesh, if the time frame is limited to just 1 Y, please do not inest at all in an Eq. fund either by SIP or STP. Keeping in your medium risk profile in mind, I w’d ask you to invest 50K in bank FD & another 50K in Birla Dynamic Bond fund.

    Thanks

    Ashal

  2. BanyanFA says:

    Hi Shailesh,
    If you have a tenure upto 1 year, you can opt for the following mix :
    1. Around 50K into FMP of 1 year duration;
    2. 25-30K into BSL Dynamic Bond Fund. With interest rate cycle to be on a downturn, such fund would give good return over 1 year cycle;
    3. Park remaining fund into Liquid funds.

    If the objective is 1 year, I would avoid investing into Equity mutual funds by SIP or any other way.

    Regards
    BFA

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