I can pay Rs 10,000 annually. Do not want too much riskAsked
Mutual Funds are ideal investment tools for people who do not have the time or the technical skills to invest money on their own, as well as for those who do not wish to seek exposure to risk and volatilty associated with the Stock Market. Though professional fund managers manage the money that you invest in mutual funds, it is very important to first identify and analyze the objective behind the said investment. It is our assumption that the purpose of your investment is to earn return commensurate with low levels of risk exposure.
Given the monetary constraint of Rs. 10,000 annually, investing in Balanced Mutual Fund seems to be the best option available. Minimum investment in this fund is Rs. 500 per month. Investment can be made for a period ranging from 1 year to 5 years. However, investing a higher amount will enable you to earn better returns. The total value of your investment of Rs. 500 per month at the historic annual return of 15.07% amounts to Rs. 6,404 at the end of one year and Rs. 44,092 at the end of five years.
Another investment option available is Better than FD Returns Low Risk. Though the minimum amount required to be invested in this fund is Rs. 1000 per month, the risk of investing in this scheme is considerably low. The historical annual return of the fund at 8.48% is commensurate with the principle of "Low Risk Low Return." This scheme has outperformed Fixed Deposits for a marginally higher risk. An investment of Rs. 1000 per month for one year and five years would amount to Rs. 12,460 and Rs. 75,113 at historic annualized rate of return.
Please note that historic performance is a mere indicator, not a guarantee of future performance of the fund.
You can view other portfolio options available to you here. It is advised that you first determine your investment objective and select a portfolio that best meets your objective and investment constraints.
For further information and professional advice specifically crafted for you, you can contact Groww.
Since you don't want to take too much risk, you can start investing in debt mutual funds through annual payment or through SIPs that is systematic investment plan of depositing minimum amount in the mutual fund a month.
Second thing it also depends on the number of years you are wanting to invest in. Because debt mutual funds would want you to keep your money invested for at least 3 years, only then taxes made on gains will be lesser. Otherwise, if you redeem your amount within 3 years, the gains will be taxed at the rate of 15% which is almost similar to that of fixed deposits.
One advantage of investing in short term or ultra short term funds is that you can redeem your money as and when you want in smaller amounts, and some debt funds allow instantaneous transfer of money into your account. For example Reliance money manager fund and DSP BlackRock money manager fund will enable to take out the amount of Rs. 2 Lakhs as the maximum limit.
The risk of investing in debt mutual fund really matters on how the market is performing, it depends on the interest rates of the bond traded in the market.
The following attached portfolio will suit best as per your requirement of investing 10,000 annually in mutual fund plans.Since this investment is for short-term (1-3 years), it is all debt portfolio. Diversified across Ultra Short Term and Short Term.
If at all you want to increase your returns, you may also like to invest in other mutual funds created by Groww to invest in which involves minimum 2000 as an investment which will b around 20,000 annually.