Lumsum investment – 5lacs for 1 to 2 years (not preferring bank or corporate FDs)

POSTED BY Lavanya Thomas ON January 2, 2013 4:23 pm COMMENTS (5)

Dear friends,

I have 5lac rupees which i would like to invest for 1 to 2 years and i have gone through similar posts mostly suggessting on Bank FDs.

Is there any better way to invest this? I am interested in MF investment lumsum which gives us good returns. How about debut fund or income funds? Is it having a gurnteed returns? any other options other than MF is also fine for me.

Thanks for your help & advise.

5 replies on this article “Lumsum investment – 5lacs for 1 to 2 years (not preferring bank or corporate FDs)”

  1. Lavanya Thomas says:

    Thanks Ashal Jauhari.

    Even though tax will be high in FD (which still we can hide interest from tx if we want to) but it has a guaranteed return.

    I would be happy to invest in MF but lumsum will never work (based on my experience in the past).

    Unfortunate that we don’t have any other options in india to invest lum sum money and get more than 10% return in a year or two.

    I am still looking forward to hear some more ideas in this topic.

  2. Dear Lavanya, in case you want to risk a bit for Eq. MIPs like HDFC MIP LTP or Reliance MIP may be an option for you. please try to understand that MF investments are not at all gtd.

    How much more can you get above FDs? Well there is a direct benefit of taxation, if you are in 30% tax slab, the FD interest ‘ll be taxed @ 30.9% whereas your gains from these debt funds (for taxation purpose, MIPs are also classified as debt funds) ‘ll be charged @ flat rate of 10.3% with out indexation after 1Y or 20.6% with indexation.

    In case your next query is for indexation, please google it or search in this forum itself & you ‘ll get your answer.

    Thanks

    Ashal

  3. oh dear! Sorry I mean NOT guaranteed! terribly sorry

    Every debt product has tax ;liability

    The article talks about this, But tax will lower than FDs

  4. Lavanya Thomas says:

    Thanks FFC for your quick response.

    can you please confirm your statement “Note returns are guaranteed in debt funds”? if its true then i will go ahead and invest in debt funds. I hope there is no tax liability in debt or income funds.

    btw.. yes, i am also parking 20% of 5lacs in bank FD.

    Any other options friend?

  5. Yes you can consider debt funds like fixed maturity plans and income funds

    This article answers your question well

    http://businesstoday.intoday.in/story/invest-debt-funds-stock-market-volatility/1/20330.html

    If you want this in 1-2 years stay away from equity funds and spread yourself across a few debt funds.

    Note returns are guaranteed in debt funds. But generally are less riskier then equity. Spread your risk adequately. Choosing a bank FDs for a small % of the money is not a bad idea at all

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