Need advice for investing 5L for short time (i.e) less than 6 months

[jermichael]

We have 5lakhs in hand which needed to be invested as we don't have any need to spend it right now but within 6 months we have to take and use it for a upcoming family function. Due to short period I don't think FD and RD not appropriate hence we require your guidance for good investing option.

Note: We are not looking for High Risk/high return investments.

 

[rasmus2]

@jermichael Liquid Debt funds

 

[jermichael]

@rasmus2 Thanks for your suggestion, is there any liquid funds that you can suggest?

 

[rasmus2]

@jermichael I parked some money in ICICI Prudential All Season Bond Fund which was doing quite well till around 2 months ago. Returns are a little slow now. Haven't researched too much about it so not sure about other alternatives.

 

[mikejones56]

@rasmus2 Better go with ICICI short term fund instead, the expense ratio is less, returns are almost the same with the all season fund. Modified duration is also less meaning less fluctuations to interest rate change. That's why the all season fund is not performing so well since the bond yield has spiked in the last two months, while the shirt term fund wasn't affected that much.

 

[graceandjoy]

@jermichael Any liquid fund will do. If you see a recognizable name infront of it, you should be fine. I personally prefer ultra short term funds than liquid funds though. These short term debt funds are pretty safe unless something like covid hits.

But eitherway, I don't think the return will be substantial in 6 months, you can leave it in your savings itself. I mean if you invest in ultra short term fund you will get 2500 rupees approx, vs liquid fund you will get 1250. Out of which you have to give tax end of year. Not sure whether it's worth the effort. And yes liquid funds are more safe than ultra short term if you don't want any risk at all. Keeping in a savings account is safest as the amount of 5L is insured in bank.

 

[martalookingforanswers]

@rasmus2 I would like to invest some money starting from 2024. I would like to diversify my funds (e.g. some in FD, and some in other moderate risk). Could you suggest me some blog or other website which gives clear information on various investment options (without asking my phone number and email) for a not financially expert person?

(for example I did not know about Liquid Debt fund before this post). Thanks!

 

[mew]

@martalookingforanswers you should spread them far and wide. Invest in index funds, small/mid/large cap based on their fundamentals (you look up the basic scores and see open screener that will help you shortlist the data in a matter of seconds), blue chips and commodities. eg 20% each. there are multiple financial books that say a)diligence is king, b) intelligence is king and c)compound is king... and i say "to be the emperor, arm yourself with all". Education is cheap, easy and strangely quicker than you'd think. The rest is a matter of practice and diligence

 

[mew]

@martalookingforanswers For moderate risk such as FD, i'd suggest you check based on tenure.(often shorter tenure makes more sense since the compounding factored into it) PSU banks usually give the best rates (some of them don't have great services)

Other than this there are many applications that help you find the right investment avenue. the amount of risk and calculation of return will be mentioned

 

[j2049]

@jermichael If you aren't looking for high risk, then either FD or some sort of gold ETF. Both carry low risk. Anything is equity carries significant risk and you should be prepared to lose invested capital

 

[jermichael]

@j2049 Is there any FD available in market that have quick disbursal (i.e) if we take out the capital prior to agreed period of time still they give interest upto that point?

 

[j2049]

@jermichael Invest in shorter maturity FD in case you don't want to pay premature withdrawal fees.

 

[lenkin]

@jermichael Yes, it will come with 1-2% premature closure charges with a clause depending upon the period of FD and its subjective from banks to banks

 

[belmonty]

@jermichael Paytm bank does that, no cancellation charges but I wouldn’t suggest putting the whole amount over there. If you wouldn’t require the whole amount in a single shot split it across banks.

 

[resjudicata]

@jermichael Check Arbitrage funds. Returns are superior to FD. And the capital gain is taxed at 15% if you withdraw within 1 year.

 

[periwinklegwu]

@resjudicata Could you recommend which one ?

 

[resjudicata]

@periwinklegwu https://www.valueresearchonline.com...brid-arbitrage/?plan-type=direct&tab=snapshot

You can sort them by returns and pick one. There isn't much difference between the top 5 funds. I've observed SBI and Nippon to be consistent ones.

 

[lionofthesun]

@jermichael Liquid mutual funds are best way to park money not required immediately and it earns interest.Redemption is within one working day typically

 

[jermichael]

@lionofthesun Could you please mention some of the best liquid mutual funds according to you?

 

[lionofthesun]

@jermichael You can download App like ET money , Groww where you will get an idea of the good liquid funds also you can invest via ET money like i have done where you get into direct mutual funds so you end up saving commission charged by people like icici securities if you go via them.

They also have a referral program where i get some incentive so DM me your details like email id and i can send you the link to start investing..