I am a NRI aged 42 years and all my investments are in equity funds. Investing through SIPs in equity funds for taking care of my retirement goal.
My next goal is to plan for my daughter’s higher education, which is 9 years away. My equity funds can manage 60% the education cost.
I have to plan for the balance 40%. I was planning for more SIPs in equity funds for 9 years. I don’t have any FDs or debt investments.
My friend is suggesting that, it is not a good idea. What he is suggesting is to go for recurring deposits now (RD) for the remaining balance 40% and gradually re balance the portfolio.
I found RD has low interest rates like 6.5% and may decrease further. As I am a NRI, my returns are not taxable.
He is telling 100% equity is not a good idea.
Is there any alternative to RD for better returns or RD should be the answer.
1 Answers
Hi,
Your friend's suggestion of re-balancing and gradually switching to 'relatively' safer avenues is a right investment strategy.
But, 9 years, I believe is a pretty long-way to go, and may be it is too early to invest 40% of your investible surplus in RDs which are tax in-efficient (if you become Resident Indian in case) and may not beat inflation (considering the fact that education inflation is very high in India).
If you do not have an Equity oriented balanced fund in your Portfolio, you may add it.
Or, at least you may have a look at aggressive MIP Funds.
Kindly read:
https://www.relakhs.com/best-monthly-income-plans-india-mutual-funds/
https://www.relakhs.com/best-mutual-fund-schemes-2017/
https://www.relakhs.com/list-of-best-investment-options-schemes-in-india/
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