Fixed deposit is a good option for a saving term of 2 yrs | india | Hindustan Times
Today in New Delhi, India
Dec 10, 2016-Saturday
New Delhi
  • Humidity
  • Wind

Fixed deposit is a good option for a saving term of 2 yrs

india Updated: Oct 21, 2011 22:28 IST

Hindustan Times
Highlight Story

I am 27-years old and earn Rs 22,000 per month. I want to get married in the next two years. Which investment avenues should I look at? How much life cover should I have? I want to open a PPF account. Can I deposit Rs 70,000 at one go? -Rahul Sharma

The investment avenues will really depend whether you want to use this corpus for your wedding. If yes, then the investments should be liquid enough so that they are available when you need them. Also they should be safe enough as your investment horizon is short-to-medium term. In this case, bank fixed deposits will work best for you.

You can open a PPF but do not deposit the complete amount as this investment will not be accessible in two years. Only in the scenario where you believe you don't need these funds you can consider locking in the entire Rs 70,000. In the future, try to deposit the same in PPF account at the start of each fiscal year to maximise interest benefits.

My husband and I want to save Rs 50,000 per month. We have opted for a mediclaim policy of Rs 5 lakh. We also have monthly systematic investment plan of Rs 10,000 (Rs 5,000 in mutual funds and gold each). How and where should we invest the money over the next 10 years? We have also invested Rs 20 lakh in a property, which will be given out on rent. -Shweta

As you have a long-term horizon, you should take higher exposure to risk and hence equity-based mutual funds should form a majority of your portfolio. You should have four-five funds in your portfolio across categories.

Buy gold exchange-traded funds or a gold fund. But make sure your exposure to gold is not more than 10%. This is because whenever an asset class performs exceedingly well, there is trend of overexposing oneself to that. Hence, the need for asset allocation.

The views expressed are of Surya Bhatia, certified financial planner & principal consultant, Asset Managers