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Vivek

Vivek Lala  | Answer  |Ask -

Tax, MF Expert - Answered on May 18, 2023

Vivek Lala has been working as a tax planner since 2018. His expertise lies in making personalised tax budgets and tax forecasts for individuals. As a tax advisor, he takes pride in simplifying tax complications for his clients using simple, easy-to-understand language.
Lala cleared his chartered accountancy exam in 2018 and completed his articleship with Chaturvedi and Shah. ... more
Asked by Anonymous - Mar 29, 2023Hindi
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Can you suggest SWP is better than MIS in Bank/Post office

Ans: SWP is better as you can withdraw 6% and even after that your investments may appreciate over a 10yrs+ horizon assuming the funds that we have selected are giving us a return of 6%+ over the years.
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.
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Sanjeev

Sanjeev Govila  |458 Answers  |Ask -

Financial Planner - Answered on Jan 26, 2023

Asked by Anonymous - Jan 26, 2023Hindi
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Sanjeevji, which is the best option to invest senior citizen saving scheme in the post office or bank?
Ans: You primarily have the following four major options for investment as a senior citizen which differ from each other in the way they work. Their important characteristics are given below. If you wish to know more, they are readily available with just a bit of googling:-

1. Senior Citizen Savings Scheme (SCSS). A 5-year scheme, extendable by 3 more years, Maximum investment allowed is Rs 15 Lakhs. Only persons with age 60 and above can invest in it, with the exception of armed forces retired personnel where this limit is 50 years. Current rate of interest is 8% payable on a quarterly basis. Available through Post Office and select banks.

2. Post office Monthly Income scheme (POMIS). A 5-year scheme. Maximum investment allowed is Rs 4.5 Lakhs. Applicable for any adult. Current rate of interest is 7.1% payable on a monthly basis. Available through Post Office only.

3. Pradhan Mantri Vaya Vandana Yojana (PMVVY). It is an insurance policy-cum-pension scheme launched by Govt of India and administered through Life Insurance Corporation (LIC). Its current rate of interest is 8%, minimum entry age 60 years, duration of 10 years, and maximum amount allowed is Rs 15 Lakhs.

4. Bank FDs. Available with all the banks with a choice of tenures. Minimum deposit amount and rate of interest vary from bank to bank. Current rates of interest in State Bank of India for senior citizens are 7.25% for a 1-2 year deposit. Other banks are also similarly placed.

If you want to know more about such options, please go to the link https://www.indiapost.gov.in/Financial/pages/content/post-office-saving-schemes.aspx where further details and more such post office schemes are given out.

..Read more

Ramalingam

Ramalingam Kalirajan  |8355 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Sep 26, 2024

Money
which is better swp with bank or private compeny mutual fund
Ans: Choosing the right mutual fund for a Systematic Withdrawal Plan (SWP) can have a significant impact on your financial goals. There is a misconception that banks themselves offer SWPs, but in reality, banks provide mutual funds through their subsidiaries, like SBI Mutual Fund or Canara Robeco Mutual Fund. These mutual funds, managed by banks, operate similarly to private company mutual funds.

Here’s a comparison between bank-based mutual funds (such as SBI, Canara, etc.) and private mutual funds (Parag Parikh, Birla, Franklin, Bajaj etc.) for setting up an SWP:

1. Return on Investment
Bank-Based Mutual Funds: These funds are often perceived as safer due to their association with large, reputed banks. However, they offer returns comparable to private mutual funds based on the underlying scheme (equity, debt, hybrid). There’s no direct relationship between the bank's stability and the fund's performance.

Private Mutual Funds: Private mutual funds can offer equally competitive or even higher returns, especially if they have strong fund managers and better-performing schemes. Fund performance depends on the market strategy and the expertise of the fund managers rather than the ownership.

Both bank-based and private mutual funds offer similar returns if they invest in comparable categories (equity, debt, hybrid). However, private funds may be more aggressive in their approach, potentially offering higher returns in certain categories.

2. Fund Management and Expertise
Bank-Based Mutual Funds: These funds might be perceived as conservative due to their backing by public-sector banks. However, fund management expertise may vary. These funds do not automatically outperform private mutual funds just because they are associated with a bank. For example, SBI and Canara Robeco have some good-performing schemes, but not all funds are top performers.

Private Mutual Funds: Private mutual funds often have a more flexible approach to fund management, which allows them to be more responsive to market conditions. Fund managers in private mutual funds are incentivized to actively manage and outperform benchmarks, which could result in better long-term results.

3. Risk and Security
Bank-Based Mutual Funds: Investors often believe that mutual funds from banks are more secure, but this is a misconception. Whether a mutual fund is managed by a bank or a private company, it is regulated by SEBI. The safety of your investment depends on the asset allocation and not the ownership of the fund house.

Private Mutual Funds: Private mutual funds are equally regulated and offer the same level of security as bank-based mutual funds. The key is to choose funds based on your risk tolerance and investment horizon, not based on whether a bank or private entity manages the fund.

4. Track Record and Performance
Bank-Based Mutual Funds: Funds like SBI and Canara Robeco have a long track record. Some of their schemes have performed well over time, especially in the large-cap and hybrid categories. However, not all bank-based mutual funds are top performers, and past performance doesn’t guarantee future returns.

Private Mutual Funds: Private fund houses like HDFC, ICICI, and Aditya Birla have equally strong or sometimes even better track records. Many private mutual funds have consistently ranked at the top due to better fund management strategies, diversification, and quicker adaptation to market changes.

5. SWP Flexibility and Features
Bank-Based Mutual Funds: These funds offer the same SWP features as private mutual funds. You can set up systematic withdrawals in equity, debt, or hybrid schemes. The flexibility in the withdrawal amount, frequency, and customization is similar to what private funds offer. There is no real difference in terms of SWP flexibility between the two.

Private Mutual Funds: Like bank-based funds, private mutual funds also offer great flexibility when it comes to SWPs. You can customize the withdrawal amount and frequency based on your requirements. The key difference comes from the fund performance rather than the SWP mechanism.

6. Taxation and Costs
The tax treatment for SWPs from bank-based mutual funds is the same as private mutual funds.

7. Brand Perception and Investor Confidence
Bank-Based Mutual Funds: Investors often feel more confident investing in bank-based mutual funds because of the trust associated with established public-sector banks like SBI and Canara. This can lead to a perception of safety, even though mutual fund investments are subject to market risks regardless of the fund house.

Private Mutual Funds: Private mutual funds, on the other hand, may not have the same level of brand recognition among conservative investors. However, private fund houses have been known to produce some of the best-performing funds in the market. Investor confidence should be based on the track record and performance rather than brand perception.

8. Overlap and Diversification
Whether you invest in a bank-based or private mutual fund, it’s important to look at the overlap between the funds in your portfolio. If too many funds invest in the same underlying assets (high overlap), your diversification efforts may be compromised.

Ensure that you choose funds with low overlap to maximize diversification, whether they are from bank-based or private mutual fund houses.

Final Insights
Bank-based mutual funds like SBI and Canara offer the same features as private mutual funds like Birla, Franklin, Bajaj and others when it comes to setting up an SWP.

The decision between bank-based and private mutual funds should depend more on the fund’s performance, management style, and your investment goals, rather than the ownership of the mutual fund.

Check the track record and the overlap ratio of funds you are considering, regardless of whether they are bank-based or private.

For tailored guidance, consider consulting with a Certified Financial Planner (CFP) or Mutual Fund Distributor (MFD) to ensure your SWP strategy aligns with your overall financial goals.

Best Regards,

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

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |8355 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 14, 2025

Money
Dear Sir, i have 15 years service Balance, daughters 1 son, Daughters ages 17, 15, 8 respectively. My earnings is per month 1.5 L, lian Balance 6L it will be closed with in 12 months. Gold is 20L , PPF & SSY 35L, other asset 125L (House and land), Kindly advice my future plans.
Ans: You are earning Rs.1.5 lakh per month.



You have a loan of Rs.6 lakh, closing in 12 months.



You have 15 years of service remaining.



You have three children. Daughters aged 17, 15, and 8.



You have gold worth Rs.20 lakh.



You have Rs.35 lakh in PPF and SSY.



You have other assets like house and land worth Rs.1.25 crore.



Appreciating Your Financial Discipline

You are earning a good monthly income.



You are almost debt-free within a year.



You are saving in long-term and tax-saving instruments like PPF and SSY.



You have no mention of any risky liabilities or investments.



You are caring for three children’s future. That is truly responsible.



Short-Term Priorities (Next 1-3 Years)

Ensure your Rs.6 lakh loan is closed in 12 months as planned.



Start a proper emergency fund. Keep at least 6 months’ income.



Create term life insurance. Choose minimum 15-20 times your annual income.



Ensure you and family have sufficient health insurance. Minimum Rs.10 lakh per member.



Do not use gold for daily expenses. Keep it as an emergency backup.



Review SSY investments. Maximise benefit till each daughter turns 18.



Medium-Term Planning (3-8 Years)

First daughter will need higher education soon. Plan for this in advance.



Second daughter also will need education funds soon.



Start SIPs in equity mutual funds. They give better returns over long periods.



You can start SIPs through a certified mutual fund distributor.



Use regular plans through MFDs with CFP guidance. Avoid direct funds.



Direct funds require more time, tracking, and understanding. Regular funds give advisor help.



Plan each child’s higher education separately. Fix budget and timeline.



Do not depend on gold or property for this.



Long-Term Planning (10-15 Years)

Retirement planning is important from now.



You have 15 years of service left. Use this time wisely.



Try to build a corpus that replaces your current income after retirement.



Invest in actively managed equity mutual funds for long-term goals.



Avoid index funds. They do not protect downside well in falling markets.



Actively managed funds give better flexibility and better sector selection.



Plan for daughters’ marriages. Set aside separate investments for each goal.



Use long-term mutual funds. Avoid FDs for long goals. FD returns may not beat inflation.



Consider laddering your FD maturity for liquidity management.



Children’s Future Planning

Keep SSY till maximum allowed age. It gives fixed returns and tax benefit.



Use mutual funds for education, not marriage.



Marriage expenses can be met from gold. But do not depend fully on it.



Begin education goal SIPs immediately. Choose different SIPs for each child.



Let SIPs run for minimum 5-8 years.



Use STP from lump sum, if required. Avoid investing lump sum directly in equity.



Retirement Readiness

You should create a retirement corpus from now.



Do not plan to sell property for retirement. Keep retirement income independent.



Build a mutual fund portfolio. You have 15 years to build.



Monthly SIPs are useful. Increase SIP amount every year.



Review your investments every 6 months with a Certified Financial Planner.



Do not stop SIPs even during market falls. That gives good long-term benefit.



Estate and Will Planning

You have three children. Create a will soon.



Divide your assets equally. This avoids future conflicts.



Include gold, land, PPF, SSY and investments in your will.



Appoint executor and keep one nominee in each account.



Tax Efficiency

You have PPF and SSY. They give good tax saving.



You can save more tax by investing in ELSS mutual funds.



ELSS gives Section 80C benefit and better returns than FD.



For retirement, equity funds are tax efficient. LTCG is taxed only above Rs.1.25 lakh at 12.5%.



Debt funds are taxed as per your slab. So use equity for long term.



Insurance Planning

Life insurance is missing. Create term plan immediately.



Choose term cover till your retirement age.



Do not invest in ULIP or traditional plans.



They mix insurance with investment. Returns are low. Surrender if you already hold them.



Use pure term plan. Rest of your money should go to mutual funds.



Finally

You are doing well in terms of income and assets.



You have short, medium and long-term goals.



Start SIPs. Create separate SIPs for each goal.



Protect family with term insurance and health insurance.



Avoid direct equity. Use mutual funds through certified distributors.



Avoid traditional life insurance plans, index funds, and annuities.



Make will. Keep financial documents safe and accessible to spouse.



Take advice from a Certified Financial Planner for review every 6 months.



Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Ramalingam

Ramalingam Kalirajan  |8355 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 14, 2025

Asked by Anonymous - May 13, 2025
Money
What is SIP, Can I start at the age of 55?
Ans: You are asking a very important question. Appreciate your curiosity.

Let’s go step by step.

What is SIP?
SIP means Systematic Investment Plan.

It is a way to invest small amounts every month in a mutual fund.

You can start with as low as Rs.500 per month.

The money gets auto-debited from your bank account.

It helps you build wealth slowly and steadily over time.

Can I Start SIP at Age 55?
Yes, absolutely. You can start SIP even at 55.

There is no age limit to start a SIP.

Many people start SIPs even in their 60s.

What matters more is your investment goal and time horizon.

What Are The Benefits of SIP?
Helps in building corpus gradually.

Gives benefit of rupee cost averaging.

You don’t need to time the market.

Helps in financial discipline.

Can be linked to your retirement goal.

Is SIP Risky?
It depends on where you invest the SIP.

If it’s equity mutual funds, there will be market ups and downs.

But if held for long, they can give better returns than FD or gold.

Debt mutual fund SIPs are more stable but give lower returns.

How Long Should I Stay Invested?
Try to stay invested for at least 5 to 10 years.

Even at age 55, you can stay invested till age 65 or 70.

Retirement doesn't mean stopping SIPs. You can continue post-retirement too, if income allows.

Where Should I Start SIP?
Since you asked, let me also highlight something important.

If someone told you to invest in direct mutual funds, here’s what you need to know:

Why Regular Mutual Funds are Better than Direct Funds for You?
Direct plans look cheaper, but they don’t give personal guidance.

At age 55, wrong fund choice can cost you years of savings.

Regular mutual funds bought through a Certified Financial Planner (CFP) offer ongoing review, advice, and goal-based support.

CFPs help you align investments with your needs—like retirement, health, or your son’s wedding.

The small fee involved in regular funds is worth the peace of mind and expert care.

Should You Do Equity or Debt SIP?
This depends on your needs.

If you have more than 7 years, then equity mutual funds are better.

If you need money in 3 to 5 years, then hybrid or debt funds are better.

Do not put all money in one category. Balance it.

SIP is Not a Product – It is a Mode
This is often misunderstood.

SIP is not a fund or product.

It is a way to invest in a fund in small regular steps.

You can do SIP in equity fund, debt fund, or hybrid fund.

Can I Stop SIP Anytime?
Yes. You can pause or stop SIP anytime.

You are not locked in (except for tax-saving SIPs).

Flexibility is a major advantage of SIPs.

Should You Start SIP at 55?
Yes, and here’s why:

You still have more than 25 years of life ahead.

Life expectancy is increasing. You need money even after retirement.

SIP gives you an edge to build that retirement income.

Don't wait for perfect time. Start small, and scale up later.

How to Start?
First, consult a Certified Financial Planner (CFP).

They will assess your goals, risks, and duration.

Then they will recommend right mutual funds and SIP amount.

Make sure the SIP aligns with your retirement income needs.

What Mistakes to Avoid?
Don’t go only by past performance.

Don’t do SIP in random funds or based on friends’ advice.

Avoid direct funds unless you can manage everything yourself.

Don’t withdraw early unless necessary.

What If You Need Monthly Income Later?
After few years, SIP can be turned into SWP (Systematic Withdrawal Plan).

SIP builds the wealth, SWP gives you monthly income post-retirement.

This helps create regular cash flow, like pension.

Final Insights
SIP is simple, flexible and useful at any age.

55 is not too late. It is a perfect time to start.

Retirement may come soon. Start preparing today with small, consistent steps.

SIP is not magic. It needs patience, time, and guidance.

Let your money work even when you rest.

Take professional support from a Certified Financial Planner. That ensures peace of mind.

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

...Read more

Prof Suvasish

Prof Suvasish Mukhopadhyay  |642 Answers  |Ask -

Career Counsellor - Answered on May 14, 2025

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.

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