Grandparent Seeking Investment Advice for Grandchildren's Future

Ans: There is going to be a 20% tax on the capital gains with indexation. Because you want to use this for regular cashflow, there is no other way to save not paying the tax. Deposit the same in Senior Citizen Savings Scheme + LIC PMVVY and if there is remaining money, invest in Debt MF & take 6% SWP.

Ans: You have built a strong financial base. Your rental income, agricultural income, and existing assets give you financial security. Now, let's focus on wealth creation and investment strategies for your son and yourself.

Investment of Rs 50 Lakh for Your Son
Invest Rs 30 lakh in actively managed equity mutual funds. Choose funds based on long-term growth potential.

Allocate Rs 10 lakh in a mix of mid-cap and small-cap funds for higher returns.

Put Rs 5 lakh in debt funds for stability and liquidity.

Keep Rs 5 lakh in a liquid fund for emergencies related to his education.

What to Do with LIC Endowment Policy?
Endowment policies give low returns. They are not good for wealth creation.

Surrender the policy and reinvest the maturity amount in mutual funds.

Use part of this money for equity mutual funds and part for debt funds.

Should You Sell a Fixed Asset for Investment?
Selling the Rs 2 crore plot can give a large capital for investment.

Real estate lacks liquidity and does not generate income.

Invest the sale proceeds into a combination of equity mutual funds and debt funds.

Keep a portion in REITs (Real Estate Investment Trusts) if you want real estate exposure.

Investing the Remaining Income
Your total passive income is Rs 1.8 lakh per month.

Expenses are Rs 50,000 per month.

You have a surplus of Rs 1.3 lakh per month.

Invest Rs 80,000 per month in SIP of actively managed mutual funds.

Keep Rs 50,000 in a debt fund or bank account for liquidity.

Managing PPF, Gold, and Silver
Your PPF balance of Rs 40 lakh is safe and tax-free. Let it grow.

Gold and silver are good for wealth preservation, but not wealth creation.

Convert part of your gold (Rs 10 lakh worth) into Sovereign Gold Bonds (SGBs) for interest income.

Final Insights
Invest your wealth in actively managed mutual funds through an MFD with CFP credentials.

Sell one of your fixed assets to increase liquidity and investment returns.

Reinvest LIC policy maturity into high-growth investments.

SIP investments will help in consistent wealth growth.

Keep a mix of equity, debt, and gold bonds for a balanced portfolio.

Review your investments every year to align with financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

Ans: I understand your concern about where to invest the proceeds from selling your house. Your health condition also makes it essential to have investments that are easy to manage online.

Factors to Consider Before Investing
Safety of Capital:

Your investment should be in low-risk options to protect your capital.
Regular Income Requirement:

You may need monthly income to cover medical and living expenses.
Liquidity and Accessibility:

Investments should be accessible online without physical visits.
Tax Implications:

Gains from the sale of property are subject to capital gains tax.
Where to Invest the Sale Proceeds?
1. Senior Citizen Savings Scheme (SCSS)
Suitable for stable and safe returns.
Interest is paid quarterly.
Maximum investment limit: Rs 30 lakh.
Lock-in period: 5 years, extendable by 3 years.
Can be invested in banks or post offices.
2. Monthly Income Fixed Deposits (FDs)
Senior citizen FDs offer higher interest rates.
Choose a monthly interest payout option.
Recommended banks: SBI, HDFC Bank, ICICI Bank, and Axis Bank.
Invest up to Rs 5 lakh per bank to ensure safety under DICGC insurance.
3. Debt Mutual Funds (For Liquidity and Tax Benefits)
Suitable for long-term capital protection with some growth.
Invest in low-risk debt funds with a short to medium duration.
Capital gains tax applies only when you withdraw money.
Can be managed entirely online through a Certified Financial Planner-backed MFD.
4. Post Office Monthly Income Scheme (POMIS)
Provides fixed monthly interest.
Maximum investment limit: Rs 9 lakh for an individual.
Safe as it is backed by the Government of India.
5. SWP (Systematic Withdrawal Plan) in Balanced Mutual Funds
Generates regular monthly income.
Better than FD as it offers higher returns with tax efficiency.
Withdrawal amounts can be adjusted as per need.
6. Tax-Free Bonds
Suitable for safe and tax-efficient returns.
Interest is tax-free and paid annually.
Can be purchased online through stock exchanges.
7. RBI Floating Rate Bonds
Interest rate adjusts every 6 months based on market rates.
Lock-in period: 7 years, but senior citizens can withdraw earlier.
Investment is safe and backed by the Government of India.
Suggested Investment Allocation
SCSS: Rs 30 lakh
POMIS: Rs 9 lakh
FDs Across Multiple Banks: Rs 10-15 lakh
Debt Mutual Funds: Rs 10 lakh
Tax-Free Bonds: Rs 10 lakh
SWP in Balanced Mutual Funds: Rs 10 lakh
This plan ensures a mix of safety, liquidity, and tax efficiency.

Final Insights
Prioritise capital protection with safe investments.
Choose options with online management for convenience.
Spread funds across different instruments for safety and returns.
Consult a Certified Financial Planner for personalised guidance.
Best Regards,

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