POSTED BY January 20, 2011 11:18 pm COMMENTS (8)ON
Everybody has a Periodic annual expenditure, if we plan to save monthly for such fixed recurring Periodic annual expenditure such as insurance term/car,vacations,ulips etc ?
where do we invest/save the money for better utilisation & returns………
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8 replies on this article “Where do we invest / keep money saved monthly for recurring Periodic annual expenditure such as insurance term/car,vacations,ulips etc ?”
i think, best for the purpose is a good liquid mutual fund scheme from any reputed amc as hdfc, bsl, quantum etc., as the return for any period would be almost uniform, whether for 15 days or 6 months.
Thanks for your valuable suggestions guys
@ Ramesh ………i read the link given by you, kindly you suggest a few debt mutual fund funds in which i could invest through SIP to meet my annual expenses.
@Mukesh thanks for your detailed suggestion, what you mentioned is exactly what im planning to do…….lets see . Now the question remain what should i opt…..Bank RD/Debt fund/Liquid fund/ cash in savings account.
@Atul ……wil chk for sure the FD rates & penalties
Its very good to plan for the yearly such expenditure. I prefer you to open RD account in bank for 1 year for those expenses, but remember the will not give you more return as it is very short term(max 6%-6.5%), but whatever they give is good for us as we are easily able to pay our regular expenditure . For example your
Insurance premiun is is due in March 2012 of Rs 12,000, Then start saving on Feb2 011 Rs 1000 pm which matures on feb-2012. You can par easily.
Car Insurance Premium on july 2012 of Rs 6000, Invest rs 500/pm from june 2011 which matures on june 2012.
You can also invest like this for your yearly fixed expenditure as per there requirement.
By doing this you r not only benifited from paying lumsum expenditure but aslo earn some intrest. but our first motive is to pay yearly fixed expenses.
One more thing is , while paying premium if you had extra cash then dont break the RD account continue for the second year.
Example- Your Insurance premium is due on March2012 of rs 12000 and you are able to pay from your cash in hand , then dont break RD account. Its also a good idea to earn more intrest.
Since the time horizon is less than 12 months I think its best to have as FD for 6 months. Please check with banks if there is charge for breaking FDs early if required. Some banks do charge.
Any MIP or short term fund are volatile and you will get decent returns only if you invest for 3-5 years.
Short-term funds are also a good bet. SIP into them.
Which is more advantageous – RD or SIP???
Am not sure about the minimum no. of years one needs to be invest in SIP, before he can get back the returns…
Also go through this.
Bank RD – And to coincide with the month of the expected payment