October 15, 2010 8:44 am
current FD rates are 7 to 7.6 per annum. I would like to invest 5 lakhs for minimum of one year. Is there any plan other than FD which gives minimum 10% returns and less risky.
Reliance MIP is good, even HDFC MIP is good but incase of crash your investments would suffer too but not up to 20%. They can give you average returns of 12-15 % per annum. If you want to take minimum risk you can invest in Birla savings MIP plan 5. This fund only invest 5% in equity, you can expect returns between 8-10%.
Thank u for ur reply n advice.
I would like to choose reliance MIP which says max 20% will be in equity.
if the market crashes alot, Will this 20% in equity also impacts capital fund? or returns will be less than current FD rate 7% ?
I would like to take risk even if the returns are minimum 5% with MIP and not inpacting the capital.
just as an information. If you are thinking strictly for 1 year then please be little careful before taking decision. If you are thinking that “Minimum 5% return” or “protected capital” then that may not be the case(though the probability is less). For example, if you look at returns in Reliance MIP- G for the period of 28-Oct-2007 to 28-Oct-2008 then the returns were -2.2% (source – Moneycontrol.com return calculator). although if somebody would have waited after that for just 2 months till 28-Dec-2008 then the returns were 10% which is really nice.
So take your call accordingly. Be little flexible at the time of withdrawal.
You can try FMP’s but they wont provide you 10% , It would be slightly better than FD , but comes with a bit of default risk , 1 yrs is a short period and is not suitable from growth point of view , If you are aggresive , then you might try MIP’s which have 15-20% equity allocation , but if market drops in coming months (which is very likely) . you will be in negative .
Manish, are you still sticking with your belief of Nifty PE going to 30 and then reversing?
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