Investing in PPF via liquid funds

POSTED BY Gopinath ON September 15, 2013 9:24 pm COMMENTS (5)

As advised in the following link https://www.jagoinvestor.com/2012/02/how-ppf-interest-is-calculated-video.html, investing a big amount during the start of the financial year, will return a  good interest.

As advised, I am depositing a good amount in the start of financial year(April). But currently am depositing it in ppf by transferring this huge amount from my savings a/c.

So, instead of doing this i need to keep an amount separately as SIP on a monthly basis and need to invest in the start of every financial year.

So,Could you please suggest me whether liquid funds is the good approach for this, so that i can deposit this amount ( Rs. 4000/5000) every month in liquid funds and transfer it to PPF during the start of the financial year?

Please let me know your thoughts /negatives (if any) on this approach.

Thanks and Regards,

Gopinath.

5 replies on this article “Investing in PPF via liquid funds”

  1. ashalanshu says:

    Dear Gopinath, please try to understand what dear JGM is saying to you. You are earning merely 4% interest in a SB account, whereas you may earn 6-8% in liquid fund. For simplicity, i’m not discussing taxation here.

    thanks

    Ashal

  2. Gopinath says:

    Dear Ashal,

    Could you kindly provide your inputs?

    Regards,
    Gopinath.

  3. Gopinath says:

    Dear Ashal,

    Thanks for the input. Could you kindly clarify whether do i have advantages of investing in Liquid funds over Savings a/c, as i am little confused now after reading the comment posted by a friend “Justgrowmymoney”.

    Regards,
    Gopinath.

  4. ashalanshu says:

    Dear Gopinath, please park money in Liquid fund.

    Thanks

    Ashal

  5. Justgrowmymoney says:

    I would recommend you to look at a more holistic perspective. Money must sit where it works the hardest.

    Assuming a liquid fund returns 8.5% and since your withdrawal period would be less than 1 year and assuming you are in 30% tax bracket then net return is about 5.95%. And in today’s scenario interest on Saving accounts up to Rs. 10k is tax free. This is equivalent of getting 5.71% and paying 30% tax on it. Thus your money is working harder in a Liquid fund.

    Do your simple math based on personal circumstances and take a call and update us what you did!

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