POSTED BY September 15, 2013 9:24 pm COMMENTS (5)
ONAs 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.
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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
Dear Ashal,
Could you kindly provide your inputs?
Regards,
Gopinath.
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.
Dear Gopinath, please park money in Liquid fund.
Thanks
Ashal
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!