Hi Sir, My age is 35 years i have a 7 year old daughter, i want to achieve 10Lakhs by the time she reaches to 16 or 17 years. I have 8 years from now, please suggest a best investment option with low risk. I can afford 5 to 7k per month. Thankyou.

Ans: Planning for Your Daughter's Future with Low-Risk Investments
You have a clear goal: achieving Rs. 10 lakhs by the time your daughter is 16 or 17 years old. You have an eight-year horizon and can afford Rs. 5,000 to 7,000 per month. Let's explore the best low-risk investment options to meet this goal.

Understanding Your Investment Horizon
An eight-year horizon provides ample time to grow your investments while managing risks. Given your preference for low risk, it's important to balance growth potential with stability.

Systematic Investment Plan (SIP) in Balanced Funds
What Are Balanced Funds?
Balanced funds, also known as hybrid funds, invest in both equity and debt instruments. This mix provides growth potential from equities and stability from debt.

Why Balanced Funds?
Balanced funds offer moderate returns with lower risk compared to pure equity funds. They are ideal for investors seeking steady growth without high volatility.

Public Provident Fund (PPF)
What Is PPF?
The Public Provident Fund is a long-term savings scheme backed by the government. It offers tax-free returns and a fixed interest rate.

Why PPF?
PPF is a low-risk investment with attractive returns, making it a safe choice for conservative investors. It also provides tax benefits under Section 80C of the Income Tax Act.

Recurring Deposits (RDs)
What Are Recurring Deposits?
Recurring deposits allow you to invest a fixed amount monthly for a predetermined period. They offer fixed returns and are available through banks and post offices.

Why RDs?
RDs are safe and provide assured returns, making them suitable for risk-averse investors. They are easy to manage and provide liquidity when needed.

Mutual Funds for Low-Risk Investors
What Are Debt Mutual Funds?
Debt mutual funds invest in fixed-income securities like bonds, treasury bills, and commercial paper. They aim to provide steady returns with lower risk.

Why Debt Mutual Funds?
Debt mutual funds are suitable for low-risk investors looking for better returns than traditional savings instruments. They offer liquidity and the potential for capital appreciation.

Comparing the Options
Risk and Return
Balanced Funds: Moderate risk and moderate returns. Suitable for a balanced approach.
PPF: Low risk with stable returns. Ideal for conservative investors.
RDs: Low risk with fixed returns. Suitable for risk-averse investors.
Debt Mutual Funds: Low to moderate risk with potential for better returns than RDs and PPF.
Flexibility and Liquidity
Balanced Funds: High flexibility with the option to redeem units anytime. Subject to market risks.
PPF: Limited liquidity with a 15-year lock-in period. Partial withdrawals allowed after the 7th year.
RDs: Fixed tenure with penalties for premature withdrawals.
Debt Mutual Funds: High liquidity with the ability to redeem units anytime.
Suggested Investment Strategy
Step 1: Start with SIP in Balanced Funds
Allocate Rs. 3,000 to 4,000 per month to balanced funds. This provides a good balance between growth and stability.

Step 2: Open a PPF Account
Invest Rs. 1,000 to 2,000 per month in PPF. This ensures a safe, tax-free investment with steady returns.

Step 3: Consider a Recurring Deposit
If you prefer additional security, start an RD with Rs. 1,000 to 2,000 per month. This ensures fixed returns with low risk.

Step 4: Invest in Debt Mutual Funds
Allocate a portion of your monthly investment, around Rs. 1,000 to 2,000, to debt mutual funds. This enhances your portfolio with low-risk, potentially higher returns.

Regular Review and Adjustment
Why Review?
Regularly reviewing your investments ensures they remain aligned with your goals and market conditions. It allows you to make necessary adjustments to stay on track.

How to Review?
Work with a Certified Financial Planner to periodically assess your investment portfolio. This ensures professional guidance and strategic adjustments as needed.

Conclusion
By investing in balanced funds, PPF, RDs, and debt mutual funds, you can achieve your goal with low risk. Regular reviews and adjustments ensure your investments stay on track, providing financial security for your daughter's future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in