POSTED BY Jig ON January 31, 2012 1:14 am COMMENTS (7)

Hello Manish,Ashal and all financial experts,
I am an NRI working in MIddle east. recently we NRIs are offered very attractive FD rate upto 9.25 upto 10 year which ultimately yield is nearly 15% and that is also tax free.
Now if i am having 3 lac liquid amount in hand,
Should i invest in such FD
Should i go with equity mf
or should i invest in small real estate/land?

I have already 1 LAC in NRO and 1 LAC in NRE FD with 2 yr & 5 Yr period respectively.
I have 14000 pm investment through SIP.
almost 2.5 lac in direct equity.

7 replies on this article “FD,MF OR REAL ESTATE”

  1. Dear Jig, You may increase the same 8K Rs. in the form of added SIP on different dates in the same funds you are investing already.



  2. Jig says:

    My current 14500 SIP details are as under:

    HDFC TOP 200- 5000
    BIRLA SUNLIFE 95- 2000

    Above all for my Child Higher education, and marriage goal. I have to plan retirement with more 8000 per month.

    Can anybody please explain considering my very first question and including this one, what is my asset allocation and how i can rebalance to achieve my goal?
    My main goal are as under:
    Child Higher Education
    Child marriage
    Wealth generation

  3. Dear Jig, For MFs, you w’d have to just notify your change of status from NRI to RI. that’s it. No problem. In case of FDs as these are NRE, in case you lose your NRI status, in my opinion, you w’d have to preclose the NRE FDs & then you w’d have to reopen the RI FDs. Please get this matter clear from your bank also.



  4. Jig says:

    Thanks once again for your time and valuable inputs.

    If after few years my NRI status changed to Resident, How it will effect the FD investment as well as MF investments?



  5. Dear Jig, In case of land, a lot Ifs & buts are involved. Market may crash from the current level. No hike in prices from current level for next 5-7 years. The Govt. policy change may impact positively or negatively your land & it’s price. As you are not in India, who ‘ll take care of your land & what ‘ll happen if some one encroaches upon your land?

    If you are confident enough for your purchase decision. Please go ahead & purchase. Else, opt the FDs.



  6. Jig says:

    Thanks ashal for your reply,
    If i can manage to get small land with this amount, still i should go with FD?


  7. Dear Jig as you are already investing through SIPs as well as having direct Eq. exposure. I w’d not ask you to put more money in Eq. as an asset class. For the amount you want to mention, from a guaranteed return point of view as well as liquidity & Taxation benefit, the NRE FD scores over Real estate. Also the ticket size is very small so I doubt you ‘ll be able to get a decent deal of property for that price point.



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