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Ans: It's great to see your proactive approach to financial planning, especially with your goal of buying a house in early 2025. With a short investment horizon of just over a year, it's essential to balance potential returns with the risk of market fluctuations.

Considering your timeframe and the need for liquidity in early 2025, a conservative approach is advisable. One option to explore is investing in fixed deposits (FDs) or short-term debt mutual funds.

FDs offer a fixed interest rate and are considered a safe investment option. Look for banks or financial institutions offering competitive rates for a tenure matching your investment period. FDs provide capital protection and assured returns, making them suitable for short-term goals.

Alternatively, short-term debt mutual funds invest in fixed-income securities like government bonds and corporate bonds with maturities ranging from a few months to a couple of years. While they offer potentially higher returns compared to FDs, they carry slightly higher risk due to market fluctuations. However, since your investment horizon is relatively short, the impact of market volatility may be minimized.

Before making any investment decisions, assess your risk tolerance and liquidity needs. Ensure that the chosen investment aligns with your financial goals and provides the necessary flexibility to access funds when required for your house purchase in early 2025.

Lastly, remember to compare interest rates or returns offered by different investment options and consider factors like taxation and fees associated with mutual funds before making a decision.

With careful planning and consideration, you can maximize returns on your short-term investment while safeguarding your capital for your future home purchase.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in