'Mid-cap funds are a good investment option' | india | Hindustan Times
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'Mid-cap funds are a good investment option'

india Updated: Aug 22, 2010 21:17 IST

Hindustan Times
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Mint, Hindustan Times and NDTV, bring you a personal finance show, "Let's Talk Money". The weekly call-in show, anchored by Monika Halan, editor, Mint Money, and Manisha Natarajan, senior anchor, NDTV, aims to answer viewers' questions about money-related issues. Here are edited excerpts from the show that aired over the weekend on NDTV Profit and NDTV.

Tanushree Saha, 27, engineer from Mumbai asks:

I am a mechanical engineer with 6 years of experience. I have a monthly income of R90,000. Expense is around R30,000 and the rest goes into savings. The breakup of my investments is: stocks (R28,000), mutual funds (R2.8 lakh), Ulips (R75,000), bank savings (R6 lakh).

I will be pursuing my 1-year MBA from the UK from next month and have been granted a loan of R30 lakh payable at an interest rate of 4% over 9 years. I have a dependent mother and brother. My family will be using my bank savings for 1 year when I am not in India. Can you suggest me some regular income mechanism from my bank savings, which will help my family get a fixed return per month, and also avoid my savings from reducing in value?

Halan: You have R6 lakh as your bank savings and what you need is just R2.4 lakhs for a year, R20,000 per month. I will suggest you open a sweep account, which is a savings account that sweeps into a fixed deposit; its a 2-in-1 account — keep most of your money there, your mother can withdraw whatever she needs. It's always good to leave a bit of cushion over R2.4 lakh. You still have 2 lakh left — put that into mutual funds, especially mid-cap funds.

Abhimanyu Veer Singh, 35, MNC employee: I am about to file for divorce. What are the things I need to keep an eye on after my break-up and how can I secure my parents (They have R30 lakh in fixed deposits)?

Natarajan: All joint account needs to be closed, all double credit cards need to stopped. I believe once the divorce process is over, you will need legal help to understand...the assets that you build up during this time, who they belong to. You will have to be careful about investing at this point of time while you are still halfway through the process

I think it's very safe right now to secure your parents' future. The R30 lakh can be put in the senior citizens savings scheme, which yields a 9% return. They will get R25,000 a month. Each elderly couple can put in R15 lakh and this can be bought from ICICI Bank or SBI .