MF Investments vs FD - Q & A Forum

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Dipa asked 10 years ago

Hi I have 5 lacs to invest. I have gain little knowledge about mutual fund. Equity fund, debt fund , balanced fund etc. 1) My father and his friends suggest to give person to person on 1% interest of month so every month I'll get 5k. 2) Bank manager suggest me go for mutual funds 3) some old bank employee suggest don't go for mutual funds you'll lose money and its risky go for FD. I am so confused what do to. Kindly give me suggestion. And advantage and disadvantage of all of these.

5 Answers

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Sreekanth Staff answered 10 years ago

Hi, It is a dangerous thing 'to consult too many people' regarding Personal Finances :) Kindly read below articles: http://www.relakhs.com/bank-deposits-aware-one-interesting-fact/ http://www.relakhs.com/avoid-fixed-deposits-rds-for-long-term/ http://www.relakhs.com/mutual-funds-subject-market-risks/ http://www.relakhs.com/personal-financial-mistakes/ May I know your financial goals, time-frame and investment objectives?

Dipa replied 10 years ago

Hi thank you so much for reply. I have read all your articles and really liked the 5 personal financial mistakes

I am single. Right now i haven’t any future goal. I just want to make money from my idle money kept in my bank account instead of just getting 4% of saving account.

I may not required the fund atleast for 3 5 yrs

You are right asking so many advice is creating more confusion.

But as i haven’t proper knowledge i am beginner in this field.

And friends of my father (one of them is bank manager) say dont put money on banks youll have to pay more tax . withdraw and put it at home.

But keeping money at home is that not more risky?

I find earning money is difficult but where to invest your money is equally difficult.

I found your blog and learning.

But just advice me mf vs lending money (which shows big no from ur article of 5 mistake) vs FD

What option you would choose?

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Dipa answered 10 years ago

Also 1more thing. I read ur article of tax on mutual funds which says after 1yr or more returns are tax free? So why there is category of : tax saving mutual fund? What that mean?

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Sreekanth Staff answered 10 years ago

Hi, 1 - If your time-horizon is 3 to 5 years and would like to test waters/take risk, you may consider investing in one balanced fund and in one MIP fund. Ex - HDFC Balanced fund & Birla Sunlife MIP II Wealth 25 plan. There can be periods of negative returns due to volatility. But stay invested and do monitor the Funds' performances. Kindly read: http://www.relakhs.com/investment-planning-investment-plan/ http://www.relakhs.com/best-mutual-fund-scheme-risk-ratios/ http://www.relakhs.com/my-mutual-fund-portfolio-mf-picks/ http://www.relakhs.com/top-best-balanced-mutual-funds-returns/ http://www.relakhs.com/best-monthly-income-plans-india-mutual-funds/ 2 - When investing in tax-saving ELSS funds, the invested amount can be claimed as tax deduction under section 80c. This is not applicable in other equity oriented funds. Whereas, at the time of redemption, any gains on Equity oriented funds are tax-free after holding the units for more than 12 months. Kindly read: http://www.relakhs.com/mutual-funds-taxation-rules-capital-gains-tax-rates-on-mfs-fy-201516/ http://www.relakhs.com/tax-treatment-taxation-rules-investments-eee-eet/

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Dipa answered 10 years ago

Hi sir thanks again. I read many of ur suggested article. I have one query about sbi bluechip fund. In most website i saw this fund is at top rank. Also is the lumpsum calculator on this website : mfmantra.com/content.php?ide=17 shows correct value ? if so then thr sbi bluechip gives very good return in 3 years compare to many other funds so why this fund is less suggested in most mutual fund sites? Thanks

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Sreekanth Staff answered 10 years ago

Hi, Most of the rankings or ratings are based on the recent performance of a fund. It is a good fund. As long as a fund is consistent in its performance over longer period say >10 years, can be considered.