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Ramalingam Kalirajan |10881 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jul 02, 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

Asked by Anonymous - Jun 22, 2024Hindi

Hi My salary is 50k and I have started investing 10k in Tanishq golden harvest scheme for future gold. I have savings of almost 11 lakh and something so I am planning to put the whole amount in fd for three years on Bajaj finance fd plan? Is it good? Also I started a sip of 10k monthly in et money quant less fund so I am sure if i should continue it or stop it?

Ans: It's wonderful that you're taking steps to secure your financial future. Let's discuss your current investment choices and how you can optimize them for better returns.

Understanding Your Current Financial Situation
Income and Investments:

Salary: Rs 50,000/month
Tanishq Golden Harvest Scheme: Rs 10,000/month
SIP in ET Money Quant Less Fund: Rs 10,000/month
Savings: Rs 11 lakhs
Planned Investments:

Bajaj Finance FD for 3 years
Evaluating Tanishq Golden Harvest Scheme
The Tanishq Golden Harvest Scheme allows you to save for gold purchases. However, it has some limitations and risks:

Lack of Flexibility:

The scheme is primarily for buying gold, limiting your options.
You might get better returns by investing in more versatile assets.
Gold Price Volatility:

Gold prices can be volatile and may not always increase.
Your returns depend on gold price movements at the time of maturity.
Better Alternatives:

Investing in a diversified mutual fund can provide better returns.
Gold ETFs or mutual funds offer more flexibility and market-linked returns.
Assessing Bajaj Finance FD
Fixed Deposits (FDs) are a safe investment, but they come with their own set of drawbacks:

Low Returns:

FD interest rates are generally low and may not keep up with inflation.
Over time, the real value of your money might decrease.
Tax Implications:

Interest earned from FDs is fully taxable.
This reduces the overall returns from the FD.
Better Alternatives:

Mutual funds offer the potential for higher returns.
They are more tax-efficient, especially for long-term investments.
Evaluating ET Money Quant Less Fund SIP
Your investment in ET Money Quant Less Fund needs careful consideration:

Actively Managed Funds:

Actively managed funds have the potential to outperform index funds.
They are managed by professionals who aim to beat market returns.
Fund Performance:

Regularly review the performance of your mutual fund.
If it consistently underperforms, consider switching to a better-performing fund.
Consult a Certified Financial Planner:

Get personalized advice from a Certified Financial Planner.
They can help you choose funds that align with your financial goals.
Optimizing Your Investments
Let's look at better investment options and strategies to maximize your returns:

Diversified Mutual Funds
Higher Returns:

Diversified mutual funds typically offer higher returns compared to FDs.
They invest in a mix of equities and debt instruments.
Risk Management:

Diversification reduces the overall risk of your investment portfolio.
Choose a mix of large-cap, mid-cap, and small-cap funds for balanced growth.
Power of Compounding:

Start early to benefit from compounding over time.
Reinvest dividends and interest to maximize growth.
Systematic Investment Plan (SIP)
Discipline and Regularity:

SIPs promote regular investing and financial discipline.
They allow you to invest small amounts regularly, reducing market risk.
Rupee Cost Averaging:

SIPs average out the purchase cost of units over time.
This reduces the impact of market volatility.
Long-Term Growth:

SIPs in equity mutual funds can provide significant long-term growth.
They are ideal for building a corpus for future goals.
Gold ETFs and Gold Mutual Funds
Flexibility:

Gold ETFs and gold mutual funds offer more flexibility than schemes like Tanishq Golden Harvest.
They are market-linked and can be bought or sold easily.
Better Returns:

These options often provide better returns compared to physical gold schemes.
They also eliminate storage and security concerns.
Tax Planning and Efficiency
Tax-Efficient Investments:

Equity mutual funds and certain debt funds are more tax-efficient.
Long-term capital gains from equity mutual funds are taxed at a lower rate.
Section 80C Deductions:

Invest in tax-saving instruments like ELSS funds under Section 80C.
This helps reduce your taxable income and saves money.
Emergency Fund Management
Adequate Emergency Fund:
Maintain an emergency fund of 6-12 months of expenses.
Keep it in a high-interest savings account or a liquid mutual fund for easy access.
Final Insights
To achieve your financial goals, consider the following steps:

Reallocate Investments:

Avoid the Tanishq Golden Harvest Scheme and Bajaj Finance FD.
Invest in diversified mutual funds for better returns and flexibility.
Increase SIP Contributions:

Gradually increase your SIP contributions as your income grows.
This enhances your investment corpus over time.
Regular Reviews:

Review your investment portfolio every 6 months.
Adjust your investments based on performance and changing financial goals.
Consult a Certified Financial Planner:

Seek advice from a Certified Financial Planner for personalized investment strategies.
They can help you optimize your portfolio and achieve your financial objectives.
By making informed investment choices and staying disciplined, you can build a substantial corpus and secure your financial future.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

www.holisticinvestment.in

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