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POSTED BY ON July 29, 2012 3:51 am COMMENTS (2)
Hello, can you tell me what would be most viable option if I opt for Fixed Deposit option for my parents who are senior citizen? I just do not want to fix it for so many years. I would like to go for 12months or 18months duration, then again re-invest it if needed. My father is asking about Govt. organization but i think all are more or less same in this regard.
At the same time, is there any other suitable option to use the amount for next 12months or 18 months? I am not at all after any mutual fund or related stuff. I need it to be as it is, no RISK play, but instead of keeping it idle in savings account want to fix it or looking for any other option.
Regards.
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Saurabh,
It all depends upon the amount of the FD and the total cost of living for your parents. I do agree that you would want to take very minimum risk on your portfolio. However, it would be best to invest your FDs on a quarterly / monthly interest payment. If you have a FD tenure for 10 years, then you would be able to lock in the interest rates for 10 years. Any interest over and above the required monthly expense of the family may then be reinvested in line with your risk profile. If you want zero risk -go for further FDs, PPF. If you want little risk – invest the remaining into Monthly Income Plan (with 20% Equity) via SIPs. If you are okay for more risk, go for higher Equity SIPs for the balance amount.
Regards
BanyanFA
Dear Sourabh Das, you may put in FDs of banks where you parents do have accounts. My personal choice ‘ll be to go for multiple FDs of 12-15-18-24-30-36-42-48-60-72-84-96-108-120 months’ duration.
Reason, the current High interest rates may not be there when your normal FDs ‘ll mature in 12-18 months as per your original choice.
Thanks
ashal