Home > Money > Question
Need Expert Advice?Our Gurus Can Help
Nikunj

Nikunj Saraf  | Answer  |Ask -

Mutual Funds Expert - Answered on Dec 15, 2022

Nikunj Saraf has more than five years of experience in financial markets and offers advice about mutual funds. He is vice president at Choice Wealth, a financial institution that offers broking, insurance, loans and government advisory services. Saraf, who is a member of the Institute Of Chartered Accountants of India, has a strong base in financial markets and wealth management.... more
Nitish Question by Nitish on Dec 15, 2022Hindi
Listen
Money

I want to create a corpus of 5-10 cr in next 10 years. I started some sips in 2018 of small amount of 2k with a PPF of 1.5L annually. With this amount I have still now 19L as saved amount. Now I have paused my previous sips and started new sips with a financial firm. They are listed below:

1-  IIFL focused Equity fund(G) - 130000 one time deposit from redemption of one earlier sips which was not performing well.

2-  Canara Bluechip Equity fund(G) - 130000 one time deposit from redemption of one earlier sips which was not performing well.

3-  SBI Contra(G) - 130000 one time deposit from redemption of one earlier sips which was not performing well.

4-  IIFL focused Equity fund(G) - 25000rs SIP monthly started

5-Canara Bluechip Equity fund(G) - 25000rs SIP monthly started 6-SBI Contra (G) - 20000rs SIP monthly started

7- SBI Smal cap fund (G)- 10000rs SIP monthly 8- Canara Roberco Small cap- 10000rs SIP

I intend to save 90K to 1 L a month. What is the maximum corpus I can create with this saving in next 10 years?

Also PPF of 1.5L annually. I have a lump sum of 25L to 30L annual salary. Please suggest and guide me if I can do something more better. I have not redeemed all of my previous sips and effect of compounding is still on. With the withdrawal ones I have 9L plus 8.40L if PPF. Right now I'm 32 years and plan to retire at 45 to 50 looking for retirement planning. Please guide.

Ans: Hello Nitish Kumar. Depending on your goal of creating 5 crore of corpus, you can increase the amount of your SIP up to 1.59 Lakh. With current investment values of SIP and Lump sum, you may be able to achieve a corpus of 3.2 crore. Regarding your current investment, it appears that you have thoroughly researched the mutual fund market. A fine selection of schemes is made. I would suggest diversifying your portfolio by AMC and category. For future SIPs, you may introduce midcap, flexicap, and largecap categories.

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.
Money

You may like to see similar questions and answers below

Ramalingam

Ramalingam Kalirajan  |9412 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 01, 2024

Listen
Money
Hi Sir Sangayya hear from Karnataka my age is 43 from last 3 years I started my SIP details r as below 1 ELSS - 5 sips each 1k 2. Large & mid cap fund - 3 sips 1k each 3. Thematic fund - Franklin India opp - 5k 4. Multi asset allocator - Tata 5k 5.Flexi cap fund - 2 Sips 1k each 6. Dynamic Asset - Edelweiss balanced Adv fund 1k 7. Small cap - Nippon India 1k Total monthly 22k is my investment kindly suggest I want to build my corpus 1cr in another 10 year & how much I have to invest more to achieve Target
Ans: Hello Sangayya, it's great to see your commitment to building your financial future through SIP investments. Let's break down your goal of reaching a corpus of 1 crore in 10 years and assess your current investment approach:

Review Current Investments: Evaluate the performance of your existing SIPs relative to their benchmarks and peers. This will help you understand if adjustments are needed to optimize your portfolio for growth.
Assess Required Monthly Investment: To reach a corpus of 1 crore in 10 years, you'll need to calculate the required monthly investment based on your expected rate of return. This depends on factors like the type of funds you're investing in and prevailing market conditions.
Consider Increasing SIP Amount: If your current monthly investment of 22k isn't sufficient to reach your goal, you may need to increase your SIP amounts or explore additional investment avenues. A Certified Financial Planner can help you determine the optimal investment strategy based on your risk tolerance and financial goals.
Stay Consistent and Patient: Building a substantial corpus takes time and discipline. Stay committed to your investment plan, continue SIPs regularly, and avoid making emotional decisions based on short-term market fluctuations.
Regular Portfolio Review: Periodically review your portfolio's performance and make adjustments as needed. Rebalancing your investments and exploring new opportunities can help you stay on track towards achieving your financial goals.
Remember, while setting ambitious targets is commendable, it's essential to ensure that your investment strategy is realistic and aligned with your risk tolerance and financial capacity. With careful planning and perseverance, you can work towards building a significant corpus over the next decade.

..Read more

Ramalingam

Ramalingam Kalirajan  |9412 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 16, 2024

Asked by Anonymous - Jun 16, 2024Hindi
Money
Hello sir, I want to save a corpus of 1crore in next 10 years. Currently I am investing 6k in UTI nifty 50 index fund and 5k in parag Parikh flexicap growth fund. Can you tell me by how much I need to increase SIP and do I need to change these plans
Ans: Evaluating Your Current Investment Strategy
First, congratulations on setting a clear financial goal and already taking steps towards it by investing regularly. Your dedication to saving and investing will pay off in the long run. Currently, you are investing Rs. 6,000 in the UTI Nifty 50 Index Fund and Rs. 5,000 in the Parag Parikh Flexicap Growth Fund. Let's examine these investments and assess how you can achieve your goal of Rs. 1 crore in the next 10 years.

Understanding Index Funds
Index funds, like the UTI Nifty 50 Index Fund, are designed to replicate the performance of a specific index, in this case, the Nifty 50. While they offer low-cost exposure to a broad market, they also come with limitations. Index funds are passive investments and do not attempt to outperform the market. They strictly follow the index, which means they can underperform during market downturns or periods of high volatility.

Benefits of Actively Managed Funds
Actively managed funds, such as the Parag Parikh Flexicap Growth Fund, aim to outperform the market through strategic stock selection and portfolio management. These funds offer the potential for higher returns as fund managers actively seek out opportunities and manage risks. Given the market's potential fluctuations over the next decade, actively managed funds might provide better risk-adjusted returns compared to passive index funds.

Evaluating Your Current SIPs
Currently, your total monthly SIP investment is Rs. 11,000. To achieve a corpus of Rs. 1 crore in 10 years, it's essential to evaluate whether this amount is sufficient or if it needs to be increased. Considering an average annual return, it's likely that you may need to increase your SIP contributions to meet your goal.

Calculating the Required SIP
Let's consider the need to increase your monthly SIP to achieve your goal of Rs. 1 crore in the next 10 years. Without diving into specific calculations, generally speaking, increasing your SIP amount will help you reach your target more comfortably.

Increasing SIP Contributions
Based on general growth projections, you may need to increase your monthly SIP to around Rs. 15,000 to Rs. 20,000. This estimate assumes an average annual return that actively managed funds can potentially deliver.

Phased Increase Approach
If an immediate increase to Rs. 20,000 per month is challenging, consider a phased approach. Gradually increase your SIP amount every year. For example, start with Rs. 15,000 and increase it by a certain percentage annually. This method helps manage the impact on your monthly budget while progressively moving towards your goal.

Diversifying Your Investment Portfolio
Exploring Other Actively Managed Funds
While the Parag Parikh Flexicap Growth Fund is a solid choice, consider diversifying into other actively managed funds. Diversification helps spread risk and enhances potential returns. Look for funds with strong track records, experienced fund managers, and consistent performance.

Sector-Specific and Thematic Funds
Sector-specific or thematic funds can provide higher returns by focusing on growing industries. For example, technology, healthcare, or renewable energy funds have shown strong growth potential. However, these funds come with higher risks due to their concentrated exposure, so they should only form a small part of your portfolio.

International Equity Funds
International equity funds invest in global markets, providing exposure to international companies and economies. These funds offer diversification benefits and reduce country-specific risks. Including a small portion of international funds can balance your portfolio and enhance returns.

Reviewing and Rebalancing Your Portfolio
Regular Portfolio Review
Review your portfolio at least once a year to ensure it aligns with your financial goals and market conditions. Regular reviews help identify underperforming investments and rebalance your portfolio as needed.

Rebalancing Strategy
Rebalancing involves adjusting the allocation of your investments to maintain your desired asset mix. For example, if one fund significantly outperforms, it may become a larger portion of your portfolio than intended. Rebalancing ensures you maintain your risk tolerance and investment strategy.

Monitoring Fund Performance
Keep track of the performance of your funds. Compare their returns against benchmark indices and peer funds. Consistently underperforming funds should be reviewed and possibly replaced with better-performing alternatives.

Tax-Efficient Investment Strategies
Utilising Tax Benefits
Maximise contributions to tax-saving instruments like Equity Linked Savings Scheme (ELSS) for Section 80C benefits. Tax-efficient investing enhances your overall returns and reduces your tax liability.

Long-Term Capital Gains
Investing with a long-term perspective (more than one year) can benefit from lower capital gains tax rates. Holding investments for the long term also helps ride out market volatility and compound returns effectively.

Building a Comprehensive Financial Plan
Setting Clear Financial Goals
In addition to your Rs. 1 crore corpus goal, set other financial goals like retirement planning, children's education, or buying a home. Having clear goals helps in creating a structured financial plan.

Budgeting and Saving
Create a detailed budget to track your income and expenses. Identify areas where you can cut unnecessary costs and redirect those savings towards your investments. Budgeting ensures disciplined saving and investing.

Emergency Fund
Maintain an emergency fund equivalent to 6-12 months of living expenses. An emergency fund provides a financial cushion during unexpected situations, preventing you from liquidating long-term investments prematurely.

Engaging Professional Guidance
Certified Financial Planner Expertise
Engaging a Certified Financial Planner (CFP) can provide valuable insights and personalised advice. A CFP can help you create a comprehensive financial plan, considering your goals, risk tolerance, and time horizon. They can also assist in selecting suitable investment options, monitoring performance, and making necessary adjustments.

Risk Management
A CFP can help identify and manage risks associated with your investments. They can recommend appropriate insurance coverage, asset protection strategies, and contingency plans to safeguard your financial future.

Retirement Planning
In addition to your Rs. 1 crore goal, consider long-term retirement planning. A CFP can help you estimate the corpus needed for retirement and create a plan to achieve it. Investing in a mix of equity, debt, and other instruments can provide a balanced retirement portfolio.

Leveraging Digital Tools and Resources
Investment Tracking Tools
Use digital tools and apps to track your investments, monitor performance, and manage your portfolio. These tools provide real-time updates and insights, helping you stay on top of your financial goals.

Educational Resources
Educate yourself about investing and financial planning through online courses, webinars, and articles. Understanding the basics of investing empowers you to make informed decisions and manage your portfolio effectively.

Automated Investing
Consider using automated investment services that offer robo-advisory. These platforms provide algorithm-based investment advice, portfolio management, and rebalancing, making investing simpler and more accessible.

Final Insights
Achieving a corpus of Rs. 1 crore in 10 years is a realistic goal with disciplined investing and strategic planning. Increasing your SIP contributions and diversifying your portfolio into actively managed funds can help you reach your target. Regularly review and rebalance your investments to ensure they align with your financial goals. Utilise tax-efficient strategies and maintain a comprehensive financial plan that includes budgeting, emergency funds, and long-term retirement planning.

Engaging a Certified Financial Planner can provide personalised advice and ongoing support. Leverage digital tools and educational resources to enhance your understanding of investing and stay informed about market trends. Your commitment to saving and investing is commendable, and with a structured approach, you can achieve your financial goals and secure a stable financial future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |9412 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 06, 2025

Asked by Anonymous - Jul 05, 2025Hindi
Money
Hello Sir, I am 42 year old , have parents, wife and 2 daughter. monthly take home is 2.25 lakh, current savings are- 1- MF - 25lakh 2- PPF- 8 lakh 3- stocks 80k 4- NPS- 1 lakh 5- PF - 24 lakh 6- Sukankya Samridhi - 1 lakh have a house loan of 36lakh, give EMI of 50k per month. I am planning for retirement by 50 years. any suggestion for any fix on current investment. I am single earner in my family, any suggestion on my current investment to make it better.
Ans: You are 42 years old with a solid monthly income of Rs. 2.25 lakh. You are managing family responsibilities for wife, two daughters, and parents. You are also repaying a home loan with Rs. 50,000 EMI monthly. You have already built up a strong savings base, which shows discipline. You plan to retire at 50. That gives you only 8 years. This is an ambitious goal. But with the right approach, it's possible.

Let us now go step by step to assess and improve your current investments. This will be a full-circle view covering risk, returns, liquidity, taxes, and future goals.

Your Current Investment Snapshot
From what you’ve shared, your assets are spread across:

Mutual Funds: Rs. 25 lakh

PPF: Rs. 8 lakh

Stocks: Rs. 80,000

NPS: Rs. 1 lakh

EPF: Rs. 24 lakh

Sukanya Samriddhi: Rs. 1 lakh

House Loan: Rs. 36 lakh (EMI Rs. 50,000 per month)

This is a very good base to start with. There is growth, safety, and diversification. But you also have responsibility as a single earner. Let us now do a 360-degree assessment.

Family Protection First
Since you are the only earner, protection is very important.

Suggestions:

Term insurance should be at least 15 times your yearly income.

In your case, it should be around Rs. 4 crore or more.

Don’t mix investment with insurance.

Avoid ULIPs or traditional endowment plans.

Surrender such policies if already taken. Reinvest in mutual funds.

Health insurance:

Ensure your entire family is covered.

Buy a family floater plan with Rs. 10 lakh cover or more.

Also buy personal accident cover.

Add critical illness policy for long-term protection.

This protection is needed to secure your savings from any health shocks.

Understanding Your Retirement Goal at 50
You have just 8 years left for retirement.

That means:

You have to build a retirement corpus fast.

You need to cover expenses for 30+ years post retirement.

Medical inflation and daily expenses will rise.

Your current retirement assets:

PF + NPS = Rs. 25 lakh

Mutual Funds: Rs. 25 lakh

PPF (part can be used)

Stocks, Sukanya and home equity are not ideal for retirement

Your home is not an investment unless sold. EMI is a cash outflow.

So, retirement corpus must come mainly from mutual funds, EPF, and NPS.

Mutual Fund Investments – Review Needed
You have Rs. 25 lakh in mutual funds.

Suggestions:

Review fund selection carefully.

Are they active funds or index funds?

Don’t go for index funds. They follow the market blindly.

Actively managed funds adjust based on market cycles.

That gives better protection in falling markets.

If you are using direct funds:

It may save cost, but it gives no guidance.

Wrong fund selection will cost more than saved expense.

Always go for regular plans via Mutual Fund Distributor with CFP credential.

You get professional support, handholding, reviews, and behaviour coaching.

This service is valuable, especially near retirement.

Monthly Investment Strategy
After paying Rs. 50,000 EMI, you still have Rs. 1.75 lakh.

Let us plan your monthly surplus wisely.

Suggestions:

Keep Rs. 20,000 for monthly emergency fund top-up.

Allocate Rs. 80,000 into mutual fund SIPs.

Invest another Rs. 25,000 in NPS Tier I for tax saving and retirement.

Use Rs. 30,000 to prepay part of the home loan (optional).

Rest can be kept for family needs and flexible savings.

Your SIP should include:

Large-cap actively managed fund

Flexi-cap fund

Hybrid aggressive fund

Balanced advantage fund

Each fund should match your risk profile and goal duration.

Debt Instruments Review
You have:

EPF – Rs. 24 lakh

PPF – Rs. 8 lakh

Sukanya Samriddhi – Rs. 1 lakh

NPS – Rs. 1 lakh

Analysis:

EPF and PPF are safe, long-term, and tax-free.

They offer low but guaranteed growth.

Don’t invest more into PPF now. Returns are slow.

Instead, increase NPS contribution for tax benefit and retirement.

For daughters:

Sukanya Samriddhi is good. Continue yearly contribution.

Don't go overboard. Fund their education through mutual funds also.

Equity Stocks – Handle with Caution
You hold Rs. 80,000 in direct stocks.

Suggestions:

Keep direct stocks only if you have time and knowledge.

Otherwise, shift funds to equity mutual funds.

Let experts manage stocks through mutual funds.

Don’t depend on stock tips or social media suggestions. Stay focused on long-term wealth building.

Home Loan Strategy
Your outstanding loan is Rs. 36 lakh. EMI is Rs. 50,000.

Suggestions:

Don't rush to close the loan unless you are nearing retirement.

Interest rates are now moderate.

Prepay small amounts yearly if you have excess cash.

But don’t compromise retirement corpus to close the loan early.

It’s better to invest and earn 11-12% than save 8% on loan interest.

Retirement Income Strategy
From age 50, your income will stop. Your savings must generate monthly income.

Suggestions:

Shift mutual fund investments slowly to balanced or hybrid funds.

Use Systematic Withdrawal Plan (SWP) from mutual funds.

Avoid annuities. Returns are poor, and capital is locked.

Keep 3 years’ worth expenses in safe liquid mutual funds.

Don’t rely only on pension. Mix growth and income wisely.

Build a portfolio that can support you till 85-90 years.

Emergency and Liquidity Planning
As single earner, emergency fund is important.

Suggestions:

Keep 6 to 9 months of expenses in liquid mutual funds.

Don’t lock all money in long-term options.

Have a separate account for emergency cash.

Update all nominations. Keep documents handy.

Tax Efficiency Strategy
You are in the highest income tax slab.

Suggestions:

Use Section 80C through EPF, NPS, Sukanya, and ELSS.

Invest in NPS for Section 80CCD(1B) extra benefit.

Use mutual funds wisely to avoid unnecessary taxes.

Sell equity mutual funds after 1 year. LTCG above Rs. 1.25 lakh taxed at 12.5%.

Avoid short-term gains. They are taxed at 20%.

Mutual funds give flexibility. But use them smartly.

Goal-Based Investing for Daughters
Education and marriage are two important goals.

Suggestions:

Open separate SIPs for education and marriage goals.

Use aggressive hybrid or flexi-cap funds for education.

Use multi-cap and balanced funds for marriage.

Shift to debt funds slowly as the goal comes near.

Keep goals separate. Don’t mix them.

Review and Rebalancing
You must not ignore this step.

Suggestions:

Do yearly review with a Certified Financial Planner.

Check if asset allocation is as per goal timeline.

Shift from equity to debt slowly near goal years.

Don’t invest emotionally or by watching the market.

Stick to your plan. Avoid over-trading.

Final Insights
You are in a strong position. Income is good. Investments are spread well.

You have clear goals. You are serious about retirement. That’s a very positive sign.

But you need to act now. Because time is short. You want to retire in 8 years.

Start monthly SIPs in right mix of mutual funds. Use regular plans with CFP-backed distributor support.

Avoid index funds. They are passive. No decision-making during market changes.

Avoid direct plans. No guidance leads to wrong fund selection. That spoils the outcome.

Review your portfolio yearly. Rebalance as needed. Don’t let emotions decide investments.

Keep protection strong. Life and health insurance must be updated.

Separate your goals. One fund, one goal strategy works better.

Keep investing. Stay disciplined. And stay focused on your end goal – peaceful and early retirement.

Best Regards,
K. Ramalingam, MBA, CFP
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

...Read more

Nayagam P

Nayagam P P  |8039 Answers  |Ask -

Career Counsellor - Answered on Jul 06, 2025

Asked by Anonymous - Jul 06, 2025Hindi
Career
I got 90.97 ile in mht cet and 81 ile in jee mains can i get into good colleges in cs or AIML ?
Ans: With a 90.97 percentile in MHT CET (approximate closing ranks between 1,500–4,000 for AI/ML and 9,000–12,000 for CSE in Maharashtra) and an 81 percentile in JEE Main (All-India rank ~200 000), these ten institutes offer achievable CS or AI/ML seats, all NBA/NAAC-accredited with PhD-qualified faculty, specialized labs, active placement cells (75–90% branch-wise placements over the last three years), robust industry tie-ups and mandatory internships:
PICT Pune Computer Engineering (1500–1540 rank) offers strong CS fundamentals; PICT AI & DS (1400–1450 rank) provides data-science specialisation; DJ Sanghvi College of Engineering Mumbai AI & ML (1600–1650 rank) focuses on machine-learning labs; VIT Bibwewadi Pune CSE (AI) (2900–2950 rank) integrates robotics and AI modules; Thadomal Shahani Engineering College Mumbai AI & DS (3750–3800 rank) emphasises analytics projects; Pimpri Chinchwad College of Engineering Pune AI & ML (3950–4000 rank) offers cloud-computing internships; Vishwakarma Institute of Technology Bibwewadi Pune CSE (AIML) (3950–4000 rank) blends software engineering and AI; Fr. C. Rodrigues College of Engineering Mumbai AI & DS (2250–2300 rank) has dedicated AI research centres; SPIT Mumbai CSE (12 000–14 000 rank) balances software and hardware domains; and JSPM Narhe Technical Campus Pune CSE (7 500–9 700 rank) features IoT and AI accelerators.

Recommendation:
For the best mix of CS breadth and AI specialisation, recommendation is PICT Pune CSE & AI & DS for its dual-track labs and ~85% placements. As strong alternatives, choose DJ Sanghvi AI & ML, PICT AI & DS, and VIT Bibwewadi CSE (AI) based on your preferred focus. All the BEST for Admission & a Prosperous Future!

Follow RediffGURUS to Know More on 'Careers | Money | Health | Relationships'.

...Read more

Ramalingam

Ramalingam Kalirajan  |9412 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 06, 2025

Asked by Anonymous - Jul 05, 2025Hindi
Money
Sir im paying 65000 emi for a 80 lac home loan. If i pre pay 5lacs this yr. Will it deduct my principal amount or interest. Whats the advantage of prepayment. This is 2nd yr of my loan term of 20 yrs.
Ans: Understanding Home Loan EMI Structure

Every EMI has two parts: interest and principal.

In early years, interest portion is very high.

Principal repayment is low in the beginning.

Over time, interest reduces and principal increases.

Impact of Prepayment in 2nd Year

Prepayment goes directly towards principal.

It does not reduce the interest directly.

But it reduces total interest over the loan period.

After prepayment, your outstanding balance drops.

So future EMIs have lower interest burden.

Benefits of Prepaying Rs. 5 Lakhs Now

Reduces overall loan tenure or EMI outgo.

Saves a lot of future interest payments.

Helps build home equity faster.

Reduces total liability early in the loan cycle.

Option 1: Keep EMI Same, Reduce Tenure

Loan gets closed earlier than 20 years.

Maximum interest saved with this method.

Good if you can manage the same EMI.

Option 2: Reduce EMI, Keep Tenure Same

Monthly burden reduces.

Interest saved is lesser than Option 1.

Useful if you need more cash flow.

Which Option is Better?

Reducing tenure saves more interest.

Recommended if you can continue same EMI.

Better from wealth creation view also.

How Much Interest Can You Save?

You will save lakhs over the long term.

The earlier you prepay, the better the savings.

Interest saved is more in initial years.

Loan Amortisation Works in Reverse

Interest is front-loaded in a home loan.

So early prepayments have bigger impact.

Later prepayments have lesser benefit.

Should You Consider Prepayment Regularly?

Yes, make partial prepayments every year if possible.

Even Rs. 1–2 lakhs annually helps a lot.

It brings down total interest drastically.

How Prepayment Affects Tax Benefits

Interest deduction under Section 24(b) remains Rs. 2 lakhs per year.

Principal deduction under Section 80C is Rs. 1.5 lakhs per year.

Prepayment doesn’t reduce these deductions.

But faster closure means fewer years of tax benefit.

When to Avoid Prepayment?

If you have higher-interest debt, clear that first.

If liquidity is low, build emergency fund first.

Don’t use investments earning higher than home loan rate for prepayment.

Don’t compromise long-term goals like retirement for loan closure.

Consider These Before Prepaying

Keep at least 6–9 months’ expenses as emergency fund.

Don’t withdraw from PF or PPF for this.

Don’t redeem mutual funds with high potential return.

Prioritise financial goals first, then prepay.

Should You Continue or Increase EMI?

If income rises, consider increasing EMI too.

Every EMI hike reduces tenure further.

Combine prepayment with EMI increase for best results.

Long-Term Financial Impact of Prepayment

Reduces liability pressure in later years.

Helps you become debt-free early.

Creates mental peace and financial stability.

Frees up income for other investments later.

Common Misunderstandings About Prepayment

Some think interest gets adjusted directly. That’s incorrect.

Prepayment reduces the principal, not the interest.

But this reduces future interest outflow.

Some think small prepayment doesn’t help. Even small amounts matter.

Best Practices for Home Loan Management

Prepay more in first 5–7 years.

Avoid loan tenure extensions unless critical.

Avoid missing EMIs to protect credit score.

Don’t refinance unless rate benefit is over 0.5%.

Why Prepayment Is Smart in 2nd Year

Your interest share is very high now.

Every rupee paid now saves more than later.

Reduces the overall cost of the loan.

Also brings financial discipline.

Track Your Loan Statements

See how your prepayment reduces principal.

Track updated amortisation schedule.

It will show new tenure or EMI post-payment.

Ask bank to issue revised repayment schedule.

Should You Use Investments for Prepayment?

Avoid using the following:

PPF or EPF (long-term and tax-free).

High-performing mutual funds (higher return potential).

Emergency funds (keep intact for safety).
Use these instead:

Idle cash in savings account.

Low-return FDs (especially if post-tax return is less than loan rate).

Bonuses or windfalls.

Final Insights

Prepayment reduces interest and tenure.

Most useful when done in early years.

Use surplus cash without disturbing goal-based investments.

Choose tenure reduction over EMI reduction for maximum benefit.

Keep monitoring and prepay strategically over the years.

Do not over-leverage your liquidity for home loan closure.

Best Regards,
K. Ramalingam, MBA, CFP
Chief Financial Planner
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

...Read more

Ramalingam

Ramalingam Kalirajan  |9412 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 06, 2025

Asked by Anonymous - Jul 05, 2025Hindi
Money
Dear Sir, My age is 44 , I have two kids(daughters) of 8 and 5 years , I have one health insurance policy , One term insurance policy. Currently getting salary of 45,000/- Pm , Got own house, No loans as of now. I have investment of of 5 lakhs in FD , 5 lakh in PPF , 2 lakh bank balance. I want to plan my retirement daughters education and marriage. wanted to invest in stocks mutual and any other investment which will secure my future.
Ans: Your current situation reflects a solid foundation. At 44, with no loans, steady income, own house, good savings, insurance coverage, and two young daughters, you're ahead of many. You’re thinking ahead – retirement, daughters’ education, and marriage. That’s smart and responsible. Now, let’s look at a detailed, all-round financial strategy from all angles, keeping your goals in mind.

Understanding Your Present Financial Setup
You’re earning Rs. 45,000 per month. That’s your key cash inflow.

You’ve got:

Rs. 5 lakh in Fixed Deposit

Rs. 5 lakh in PPF

Rs. 2 lakh in bank savings

One term insurance policy

One health insurance policy

Own house

No loans

This is a clean and stable starting point. Your financial risks are low. That’s commendable.

But your investments are more in fixed return options. This will not beat long-term inflation. Let us now look at planning your future needs and aligning your money to each.

Priority Goals to Address
You have three clear financial goals:

Retirement

Daughters’ education

Daughters’ marriage

Each needs a different strategy. Let us plan for each goal separately.

Retirement Planning
You are 44 now. You may have around 16 years to plan for retirement.

Challenges:

You will not have salary after retirement.

Medical expenses may increase.

You need money for day-to-day life after 60.

Suggestions:

Avoid keeping too much in FDs. They don’t beat inflation.

PPF is safe, but it grows slowly and has a lock-in.

You need higher returns for long-term goals.

Action Steps:

Start monthly SIPs in actively managed mutual funds.

Keep investing till you reach retirement.

Increase SIPs every year as salary increases.

Combine large-cap, flexi-cap, and balanced advantage fund categories.

Don’t go for index funds. They just copy market. No flexibility.

Actively managed funds adjust during market fall. That gives safety.

Get help from a Mutual Fund Distributor who is a Certified Financial Planner (CFP).

Don’t go for direct mutual funds. No one will guide you. Mistakes can be costly.

With regular plans via CFP-MFD, you get full support. Also behavioural coaching.

Stick to funds with strong track record. Don’t change often.

Education Planning for Daughters
Your daughters are 8 and 5. You have 10-15 years before higher education.

Challenges:

Education costs are rising fast.

Inflation is higher in education sector.

You need money lump sum at that time.

Suggestions:

Begin separate mutual fund SIPs for each daughter.

Again, go for actively managed funds.

Avoid mixing insurance and investment.

Do not invest in child plans. They offer poor returns.

Keep FD and PPF for emergencies, not for education.

Action Steps:

You can use balanced advantage funds or multi-cap funds.

Review investments every 12 months.

Use SIPs. Start small. Increase yearly.

Have one goal-based investment for each daughter.

Avoid ULIPs or endowment plans. They are not fit for this goal.

Marriage Planning for Daughters
You may need funds in 15 to 20 years.

Challenges:

Not a fixed date like education. So, flexibility is needed.

Emotionally, you may not want to take risk close to that time.

Suggestions:

Use long-term mutual funds now.

Slowly move to low-risk options as the event gets closer.

Do not use gold schemes or traditional insurance for this.

Action Steps:

Start SIPs in diversified equity funds.

Around 5 years before marriage, shift from equity to hybrid funds.

Final 2 years, move fully to safe instruments like ultra-short funds.

Protecting Your Family
You have a term plan and health insurance. That’s good.

Check the following:

Term insurance must be at least 15 times your yearly income.

Health cover should include entire family, with Rs. 10 lakh coverage.

Add critical illness cover if not already there.

Avoid:

Insurance-cum-investment policies.

LIC traditional plans or ULIPs. Surrender them if you have any.

Reinvest surrender value in mutual funds via SIP.

Emergency Fund and Liquidity
Your Rs. 2 lakh bank balance is a good emergency buffer.

Suggestions:

Keep 6 months' expenses as emergency fund.

Keep this in liquid mutual fund or sweep-in FD.

Don’t invest emergency money in equity.

Tax-Saving Strategy
You already invest in PPF. That gives Section 80C benefit.

Suggestions:

Avoid locking entire 80C in one product.

Invest part in ELSS mutual fund through regular plan with CFP help.

ELSS gives better long-term returns than PPF.

Don’t go overboard with insurance for tax saving.

Rebalancing and Monitoring
Many people ignore this part. But it’s very important.

Suggestions:

Review portfolio once a year.

Rebalance asset allocation as per goal timelines.

If equity markets are too high or too low, make necessary shifts.

This prevents losses and manages risk.

Monthly Budget Discipline
Rs. 45,000 salary is decent, but needs wise handling.

Suggestions:

Track all expenses every month.

Follow 50:30:20 rule. (50% needs, 30% wants, 20% saving)

Slowly increase savings portion.

Don’t take personal loans or credit card loans.

Avoid investing in real estate again. It blocks liquidity.

Asset Allocation Guidance
You must divide money based on risk and goal timing.

Suggested mix:

Emergency Fund: Bank + Liquid fund

Short-Term Needs (

...Read more

Nayagam P

Nayagam P P  |8039 Answers  |Ask -

Career Counsellor - Answered on Jul 06, 2025

Asked by Anonymous - Jul 06, 2025Hindi
Career
Hello sir, My son scored AIR 7493 in JEE mains, AIR 9900 in JEE Advance, K-CET rank 138, MHT-CET 99.85 percentile, BITSAT 286 marks. Karnataka home state for 12th grade, parents with Maharashtra domicile. He got IIT Patna Mechanical engineering in JoSAA councilling. He may get BITs Goa or Hyderabad ECE. He may get CSE in Karnataka 's and Maharashtra's good private or Govt. engineering colleges. Which branch and college should be preferred for good future academic and professional growth? Please advise.
Ans: IIT Patna’s B.Tech Mechanical Engineering, an NBA- and NAAC-accredited programme, is delivered by PhD-qualified faculty in advanced manufacturing, CAD/CAM and thermofluids labs, integrates mandatory internships and records an 81.5% placement rate for Mechanical students over the past three years. BITS Pilani’s ECE at Goa and Hyderabad campuses, NBA-accredited with state-of-the-art VLSI, communications and IoT labs, sustains an ~81% overall placement consistency, with ECE cohorts typically matching this trend. CSE programmes in top Karnataka and Maharashtra institutes—such as COEP Pune, VJTI Mumbai, PESCE Mandya and DSCE Bengaluru—combine NAAC A+/NBA accreditation, specialized AI/ML and data-science facilities, strong corporate tie-ups and 80–90% branch-wise placement records. Accreditation ensures quality and global recognition; faculty expertise drives rigorous curricula; modern infrastructure (labs, makerspaces) underpins hands-on learning; industry collaborations and internships bolster employability; and consistent placement rates reflect sustained recruiter confidence.

Recommendation: (Order of Preference)
Given your son’s All-India ranks and state quotas, recommendation is IIT Patna (if location is OK for your son) Mechanical for its strong core-engineering training and reliable 81.5% placements. Next, choose BITS Goa/Hyderabad ECE for cutting-edge electronics exposure and ~81% placement consistency. For market-facing computing roles, consider COEP Pune CSE, VJTI Mumbai CSE, and RVCE-Bengaluru CSE in that order, leveraging their 85–90% branch placements and premier labs. All the BEST for Admission & a Prosperous Future!

Follow RediffGURUS to Know More on 'Careers | Money | Health | Relationships'.

...Read more

Nayagam P

Nayagam P P  |8039 Answers  |Ask -

Career Counsellor - Answered on Jul 06, 2025

Nayagam P

Nayagam P P  |8039 Answers  |Ask -

Career Counsellor - Answered on Jul 06, 2025

Asked by Anonymous - Jul 05, 2025Hindi
Career
My daughter got 54.67 in jee and in 12 she has got 76 percent want to do btech cse.what college she will get. Advice me
Ans: With a JEE Main percentile of 54.67854, corresponding to an All-India rank around 200 000–220 000, the following Northern Indian institutes typically close CSE seats within this range under the All-India quota:

College | Location | Approximated JEE Main Closing Rank Range (All-India) | Placement Rate (Last 3 Years):
Sharda University. Greater Noida, UP. 180 000–220 000. 75–85%.
Galgotias University. Greater Noida, UP. 200 000–240 000. 70–80%.
Amity University. Noida, UP. 150 000–200 000. 80–90%.
KIET Group. Ghaziabad, UP. 190 000–230 000. 75–85%.
Manav Rachna International University. Faridabad, HR. 160 000–210 000. 70–80%.
Chitkara University. Punjab. 180 000–220 000. 75–85%.
Chandigarh University. Mohali, PB. 170 000–210 000. 80–90%.
Graphic Era University. Dehradun, UK. 190 000–230 000. 78–88%.
Lovely Professional University. Jalandhar, PB. 150 000–200 000. 85–92%.
JIMS Rohini. Delhi. 180 000–220 000. 70–80%.

recommendation
For the best balance of academic reputation, modern labs and consistent CSE placements, recommendation is Amity University Noida. As strong alternatives, consider Chandigarh University and Lovely Professional University for their higher placement rates and broad recruiter networks. All the BEST for Admission & a Prosperous Future!

Follow RediffGURUS to Know More on 'Careers | Money | Health | Relationships'.

...Read more

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

Close  

You haven't logged in yet. To ask a question, Please Log in below
Login

A verification OTP will be sent to this
Mobile Number / Email

Enter OTP
A 6 digit code has been sent to

Resend OTP in120seconds

Dear User, You have not registered yet. Please register by filling the fields below to get expert answers from our Gurus
Sign up

By signing up, you agree to our
Terms & Conditions and Privacy Policy

Already have an account?

Enter OTP
A 6 digit code has been sent to Mobile

Resend OTP in120seconds

x