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Ramalingam Kalirajan |6240 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jul 23, 2024

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

Question by Gagandeep on Jul 23, 2024Hindi

Hello sir Gagan Here, Hope you are doing well, In section 80c pls i have invested in Elss 60k, PF 43200, Remaing 48k where to invest with better return pls suggest,

Ans: Gagan,

You have invested Rs 60,000 in ELSS and Rs 43,200 in PF. You have Rs 48,000 remaining to invest under Section 80C. Here are some insights on where you can invest this amount for better returns.

Investment Options under Section 80C
Public Provident Fund (PPF):

PPF offers a fixed return and has a lock-in period of 15 years.
It is suitable for risk-averse investors looking for steady returns.
National Savings Certificate (NSC):

NSC has a five-year lock-in period.
It offers a fixed return and is backed by the government.
Sukanya Samriddhi Yojana (SSY):

SSY is for the girl child and offers a higher interest rate.
It has a lock-in period until the girl child turns 21 or gets married.
Senior Citizens Savings Scheme (SCSS):

SCSS is for senior citizens above 60 years.
It offers a high fixed return with a five-year lock-in period.
Life Insurance Premiums:

Premiums paid for life insurance policies are eligible for deduction.
It provides financial security to your family in case of an unfortunate event.
Five-Year Fixed Deposits:

Fixed deposits in banks with a five-year lock-in period qualify under Section 80C.
They offer guaranteed returns but generally lower compared to other options.
Evaluating the Options
Risk Appetite:

Consider your risk appetite. If you prefer low risk, PPF and NSC are good options.
For higher returns and moderate risk, ELSS remains a strong choice.
Investment Horizon:

Align your investment horizon with the lock-in period of the instrument.
For short-term needs, five-year fixed deposits or NSC might be suitable.
Return Expectations:

ELSS typically offers higher returns due to equity exposure.
Fixed return options like PPF and NSC provide stability but lower returns.
Optimizing Returns
Diversification:

Diversify your investments across different options.
This balances risk and return, ensuring stability and growth.
Regular Review:

Regularly review your investment portfolio.
Adjust based on changes in financial goals and market conditions.
Benefits of Professional Guidance
Certified Financial Planner (CFP):
Consulting a CFP can provide tailored advice.
They help in optimizing your investment portfolio for maximum benefits.
Insight into Investment Choices
Actively Managed Funds:

Avoid index funds. Actively managed funds, selected by experts, often outperform the market.
These funds offer better growth potential, especially when chosen through a CFP.
Regular Funds via MFD:

Avoid direct funds. Regular funds through a Mutual Fund Distributor (MFD) with CFP credentials provide better guidance.
They offer personalized advice and regular updates, ensuring your investments are well-managed.
Final Insights
Consider All Options:

Evaluate all options under Section 80C to make an informed decision.
Choose based on your risk tolerance, investment horizon, and return expectations.
Professional Help:

Seek advice from a Certified Financial Planner.
They ensure your investments are aligned with your financial goals and offer the best returns.
Summary
Invest remaining Rs 48,000 considering your risk appetite and investment horizon.
Diversify across different options under Section 80C.
Consult a Certified Financial Planner for personalized advice and optimal portfolio management.
Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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.