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High-Cost MFs at 24: Is My Broker Harming My Future?
Ramalingam Kalirajan |9758 Answers |Ask -Follow
Mutual Funds, Financial Planning Expert - Answered on Jun 02, 2025
Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
Asked by Anonymous - May 24, 2025Hindi
Hi I am 24 years old,Workign in tech MNC , net in hand salary 31,900 . I am investing 10k in MF SIP monthly. For emergency I have a FD of 40k . As I was doing this through a broker so after 1 year I realized that my money is invested in regular plans which can impact long term amount. My portfolio 1. Bajaj finserv large cap regular plan growth :(invested lumpsum one time) expense ratio : 2.10% 2. Edelweiss mid cap regular plan growth : expense ratio : 1.73 % 3. nippon india small cap fund - regular plan growth : expense ratio : 1.44% 4. quant active fund regular plan : expense ratio : 1.66% I do SIP in last 3 funds since nov 23. I have few questions in which i need help from you. q1. Is my portfolio up to the point as I will be investing for long term 25-30 years. q2. In next two months I will be switching my job to SBI with a higher salary. So I am planning to start direct fund SIP with the increased amount through zerodha plateform and keep that 10k SIP going on ?? q3. Currently I am using two accounts one HDFC(salary account) and one PNB (SIP deduction) . When I will join SBI I would be opening a new salary account . So should I keep 2 accounts or 3 accounts. I am planning to keep 3 accounts. SBI ( main salary only for yono ) , HDFC (for expenses) , PNB ( SIPs). what will you suggest?? q4. I am also planning to start SIP in gold ETF through zerodha. can you suggest sime good etfs with lower expense ratios??
Ans: You are working in a tech MNC with a take-home salary of Rs. 31,900.
You are already investing Rs. 10,000 monthly in mutual fund SIPs.
You also have an emergency FD of Rs. 40,000. That is a very good start.
It is rare to see such clarity and discipline at your age. Very encouraging.
Now, let’s go step-by-step and answer all your questions with full assessment.
Your Mutual Fund Portfolio Assessment
You are investing in 4 mutual funds.
Let us understand the portfolio construction:
Bajaj Finserv Large Cap Regular Plan (lumpsum) – Expense Ratio: 2.10%
Edelweiss Mid Cap Regular Plan (SIP) – Expense Ratio: 1.73%
Nippon India Small Cap Fund (SIP) – Expense Ratio: 1.44%
Quant Active Fund (SIP) – Expense Ratio: 1.66%
These funds are good for long-term growth.
Your exposure is aggressive. But you are young. That is fine.
But there are few observations and suggestions:
You are using regular plans. But asking about direct plans.
You are thinking direct plans give better returns.
But that thinking is not fully correct.
Direct plans have lower expense ratio.
But they do not come with guidance and review.
You need proper fund review and rebalancing every year.
A Certified Financial Planner helps you here.
If you invest directly, you won’t get this monitoring.
In long term, wrong fund selection affects returns more than expense ratio.
Direct plans have high exit risk when markets fall.
People stop SIPs due to fear. They have no coach.
That leads to poor long-term wealth building.
Regular plans through Certified Financial Planner avoid these issues.
So your current fund selection is acceptable for now. But maintain it with professional help.
Long-Term Suitability (25–30 Years Investment Horizon)
You are planning to invest for 25–30 years. That is excellent.
This gives you full advantage of compounding.
Your current funds cover large, mid, small and flexi-cap.
This is a diversified portfolio.
For now, you may continue same funds.
But every year review it.
Some funds may underperform in 3–5 years.
Do not stick to old funds just because you started them.
You may also add a balanced fund later.
That will reduce risk after 10 years.
Right now, you are in pure equity.
It is suitable for your age.
But as salary increases, diversify more.
Not just equity, use hybrid funds too.
That improves stability of your portfolio.
Your Emergency Fund Planning
You have Rs. 40,000 FD for emergency.
That is a good habit.
But your monthly expenses may be around Rs. 15,000 to Rs. 18,000.
You must keep at least 6 months of that.
Target Rs. 1 lakh in emergency fund over time.
Use liquid mutual fund, not just FD.
Liquid funds offer better returns than savings account.
Keep this fund separate.
Never touch this amount for SIPs or purchases.
This is only for real emergency.
It gives you peace of mind and avoids loan dependence.
Your Upcoming Job Shift to SBI
You are about to shift to SBI. Your salary will increase.
You are planning to continue Rs. 10,000 SIP.
You want to start new SIPs in direct plans via Zerodha.
That is a risky thought.
Direct plans look attractive on surface.
But they lack rebalancing and professional review.
Zerodha is a platform, not a planner.
If your job is busy, you will skip fund monitoring.
That will hurt your long-term wealth.
Continue existing SIPs.
Start new SIPs in regular plans only.
Use help of Certified Financial Planner.
That gives you strategy, goal mapping, and emotional support.
Without proper planning, even good SIPs underperform.
Your current planner should also explain fund selection every year.
Using Three Bank Accounts
You are using HDFC (salary), PNB (SIP), and soon SBI.
You plan to keep all three accounts.
This is acceptable, but needs clarity.
Use SBI only for salary and bill payments.
Use HDFC for daily expenses like UPI, ATM, card use.
Use PNB only for SIPs. Keep auto debit active.
That way, your SIPs won’t fail even if job shifts again.
But do not let balances lie idle in all three accounts.
Transfer all extra amount to liquid funds.
Also review account charges every year.
If any account is not used for 6 months, close it.
Too many accounts create confusion later.
About Investing in Gold ETF
You want to start SIP in gold ETF.
You are thinking about lower expense ratio.
But please understand some key points:
Gold ETF is not regular mutual fund.
It does not give compounding returns.
Gold gives only 6% to 7% CAGR over long term.
Equity gives more than 11%–12% CAGR over same period.
Gold is good only for 5–10% of portfolio.
It is useful only during crisis or for diversification.
If you want gold for marriage or gifting, use physical gold.
If it is just for investment, avoid ETF.
There are other better options like gold mutual funds.
But even that should not exceed 10% of portfolio.
SIP in gold ETF is not a long-term wealth strategy.
Do not fall for gold’s emotional value.
Equity builds real wealth over 25 years.
Mutual Fund Tax Rules You Must Know
For equity mutual funds:
LTCG (after 1 year) above Rs. 1.25 lakh is taxed at 12.5%
STCG (before 1 year) is taxed at 20%
For debt funds: All gains taxed as per income slab
So keep equity funds for long term.
Avoid frequent switching.
Tax reduces your real return.
Plan SIPs with goal. Not for experiments.
Finally
You have done a great job at just 24.
Your discipline is rare and deserves appreciation.
But now focus on structure and long-term clarity.
Avoid direct funds. Use regular funds with Certified Financial Planner.
Track SIPs, goals, risk, and rebalancing every year.
Increase emergency fund slowly.
Avoid gold ETF as SIP. It is not needed now.
Continue same SIPs and add hybrid funds later.
Avoid making fund decisions based only on expense ratio.
Real success comes from staying invested and adjusting yearly.
Keep building, step by step. That is real wealth creation.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
You are already investing Rs. 10,000 monthly in mutual fund SIPs.
You also have an emergency FD of Rs. 40,000. That is a very good start.
It is rare to see such clarity and discipline at your age. Very encouraging.
Now, let’s go step-by-step and answer all your questions with full assessment.
Your Mutual Fund Portfolio Assessment
You are investing in 4 mutual funds.
Let us understand the portfolio construction:
Bajaj Finserv Large Cap Regular Plan (lumpsum) – Expense Ratio: 2.10%
Edelweiss Mid Cap Regular Plan (SIP) – Expense Ratio: 1.73%
Nippon India Small Cap Fund (SIP) – Expense Ratio: 1.44%
Quant Active Fund (SIP) – Expense Ratio: 1.66%
These funds are good for long-term growth.
Your exposure is aggressive. But you are young. That is fine.
But there are few observations and suggestions:
You are using regular plans. But asking about direct plans.
You are thinking direct plans give better returns.
But that thinking is not fully correct.
Direct plans have lower expense ratio.
But they do not come with guidance and review.
You need proper fund review and rebalancing every year.
A Certified Financial Planner helps you here.
If you invest directly, you won’t get this monitoring.
In long term, wrong fund selection affects returns more than expense ratio.
Direct plans have high exit risk when markets fall.
People stop SIPs due to fear. They have no coach.
That leads to poor long-term wealth building.
Regular plans through Certified Financial Planner avoid these issues.
So your current fund selection is acceptable for now. But maintain it with professional help.
Long-Term Suitability (25–30 Years Investment Horizon)
You are planning to invest for 25–30 years. That is excellent.
This gives you full advantage of compounding.
Your current funds cover large, mid, small and flexi-cap.
This is a diversified portfolio.
For now, you may continue same funds.
But every year review it.
Some funds may underperform in 3–5 years.
Do not stick to old funds just because you started them.
You may also add a balanced fund later.
That will reduce risk after 10 years.
Right now, you are in pure equity.
It is suitable for your age.
But as salary increases, diversify more.
Not just equity, use hybrid funds too.
That improves stability of your portfolio.
Your Emergency Fund Planning
You have Rs. 40,000 FD for emergency.
That is a good habit.
But your monthly expenses may be around Rs. 15,000 to Rs. 18,000.
You must keep at least 6 months of that.
Target Rs. 1 lakh in emergency fund over time.
Use liquid mutual fund, not just FD.
Liquid funds offer better returns than savings account.
Keep this fund separate.
Never touch this amount for SIPs or purchases.
This is only for real emergency.
It gives you peace of mind and avoids loan dependence.
Your Upcoming Job Shift to SBI
You are about to shift to SBI. Your salary will increase.
You are planning to continue Rs. 10,000 SIP.
You want to start new SIPs in direct plans via Zerodha.
That is a risky thought.
Direct plans look attractive on surface.
But they lack rebalancing and professional review.
Zerodha is a platform, not a planner.
If your job is busy, you will skip fund monitoring.
That will hurt your long-term wealth.
Continue existing SIPs.
Start new SIPs in regular plans only.
Use help of Certified Financial Planner.
That gives you strategy, goal mapping, and emotional support.
Without proper planning, even good SIPs underperform.
Your current planner should also explain fund selection every year.
Using Three Bank Accounts
You are using HDFC (salary), PNB (SIP), and soon SBI.
You plan to keep all three accounts.
This is acceptable, but needs clarity.
Use SBI only for salary and bill payments.
Use HDFC for daily expenses like UPI, ATM, card use.
Use PNB only for SIPs. Keep auto debit active.
That way, your SIPs won’t fail even if job shifts again.
But do not let balances lie idle in all three accounts.
Transfer all extra amount to liquid funds.
Also review account charges every year.
If any account is not used for 6 months, close it.
Too many accounts create confusion later.
About Investing in Gold ETF
You want to start SIP in gold ETF.
You are thinking about lower expense ratio.
But please understand some key points:
Gold ETF is not regular mutual fund.
It does not give compounding returns.
Gold gives only 6% to 7% CAGR over long term.
Equity gives more than 11%–12% CAGR over same period.
Gold is good only for 5–10% of portfolio.
It is useful only during crisis or for diversification.
If you want gold for marriage or gifting, use physical gold.
If it is just for investment, avoid ETF.
There are other better options like gold mutual funds.
But even that should not exceed 10% of portfolio.
SIP in gold ETF is not a long-term wealth strategy.
Do not fall for gold’s emotional value.
Equity builds real wealth over 25 years.
Mutual Fund Tax Rules You Must Know
For equity mutual funds:
LTCG (after 1 year) above Rs. 1.25 lakh is taxed at 12.5%
STCG (before 1 year) is taxed at 20%
For debt funds: All gains taxed as per income slab
So keep equity funds for long term.
Avoid frequent switching.
Tax reduces your real return.
Plan SIPs with goal. Not for experiments.
Finally
You have done a great job at just 24.
Your discipline is rare and deserves appreciation.
But now focus on structure and long-term clarity.
Avoid direct funds. Use regular funds with Certified Financial Planner.
Track SIPs, goals, risk, and rebalancing every year.
Increase emergency fund slowly.
Avoid gold ETF as SIP. It is not needed now.
Continue same SIPs and add hybrid funds later.
Avoid making fund decisions based only on expense ratio.
Real success comes from staying invested and adjusting yearly.
Keep building, step by step. That is real wealth creation.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
Asked on - Jun 06, 2025 | Answered on Jun 06, 2025
Can you give me a break up of my salary 75k in hand once I join SBI. 10k MF, I have 40k FD then how to increase emergency fund. Should I do FD every month of lets say 4k?? How to build emergency fund?
Ans: Salary Allocation (Monthly)
SIP in Mutual Funds: Rs. 10,000 (continue as is)
Expenses (rent, food, transport): Rs. 35,000 (adjust as per your lifestyle)
Emergency Fund via FD: Rs. 4,000 per month
Emergency Fund via Liquid Mutual Fund: Rs. 2,000 per month
Remaining Savings Buffer: Rs. 24,000 (for short-term goals or occasional spends)
How to Build Emergency Fund
Your target should be Rs. 1.25 lakh (minimum 6 months of essential expenses)
You already have Rs. 40,000 in FD
Add Rs. 4,000 monthly in a short-term FD
Add Rs. 2,000 monthly in a liquid mutual fund
In about 12 months, you will reach around Rs. 1.2 lakh total emergency reserve
This method gives you both safety and liquidity. Use FD for fixed base, and liquid fund for quick access. Do not use this money for any SIPs or purchases. It should only be used in a real emergency like job loss or health issue.
Best Regards,
K. Ramalingam, MBA, CFP
Chief Financial Planner
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
SIP in Mutual Funds: Rs. 10,000 (continue as is)
Expenses (rent, food, transport): Rs. 35,000 (adjust as per your lifestyle)
Emergency Fund via FD: Rs. 4,000 per month
Emergency Fund via Liquid Mutual Fund: Rs. 2,000 per month
Remaining Savings Buffer: Rs. 24,000 (for short-term goals or occasional spends)
How to Build Emergency Fund
Your target should be Rs. 1.25 lakh (minimum 6 months of essential expenses)
You already have Rs. 40,000 in FD
Add Rs. 4,000 monthly in a short-term FD
Add Rs. 2,000 monthly in a liquid mutual fund
In about 12 months, you will reach around Rs. 1.2 lakh total emergency reserve
This method gives you both safety and liquidity. Use FD for fixed base, and liquid fund for quick access. Do not use this money for any SIPs or purchases. It should only be used in a real emergency like job loss or health issue.
Best Regards,
K. Ramalingam, MBA, CFP
Chief Financial Planner
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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