Saving-Ideas.com

Icon

Personal Finance Blog India -

Which Is The Best Investment Option For Investing Money For Short Term Like 50 Days:


One of the reader of this blog have cash of around Rs.25 Lakh in his bank account .He will need this money after couple of months and till he wish to invest some where to get some optimum returns -more than 4% offered by general saving account.

Since he need money after couple of months we will consider period of 50 days only as we need to keep some allowance period.

No Equity or long term Debt funds:

First suggestion will of course don’t think for any equity or long term debt – income funds.As period of 50 days is too small and one should not think for volatile asset for such a short period.

Bank Short Term Deposits:

My first preference will be for short term deposit of tenure 50 days with my bank where my saving account is.Short term deposits are currently attracting deposit rate of 6-8% per annum basis and I should not expect much more beyond this.

Fixed Deposit rates – 50Days:

Deposit rates of few leading PSU and private banks are as follow

Short Term Deposit Rates - 50 Days

 

 Liquid Funds:

Liquid funds can be another option.As per current scenario… liquid funds can offer returns of 8.50-9.5% per annum basis.But one need to complete KYC formalities(if not current investor) and may need to gather some information or may need to take  guidance from some one.

BEST LIQUID FUNDS FOR SHORT TERM INVESTMENT

Saving Account with higher interest rate:

Few banks are offering interest rates up to 7% on saving account.List includes banks like Kotak Mahindra or YES Bank…but it may not be feasible to open the account if there are not major cash flows in this account.

so from my point of view..few above mentioned options are available for short term investment purpose..suggestions are wel-come if any..

 

What If I Would Have Invested In All Open Ended NFOs Of ICICI Prudential MF and Then What would Be XIRR:

Recently one query popped in my mind – what would have my investment if I have invested in all open ended schemes of any particular AMC…I have here considered schemes of ICICI Prudential Mutual fund.All Open ended Equity schemes- all equity diversified,sectoral,ELSS schemes and funds with international exposure are considered.

Suppose Rs 1 lakh invested in each fund at NFO and last column indicates current valuation as on July 15, 2014:

ICICI PRUDENTIAL MUTUAL FUND PERFORMANCE SINCE INCEPTION

So if I have invested Rs.1Lakh in each scheme at NFO,my current valuation would have more than 1 Crore.

What would be XIRR:

XIRR is major of returns when cash flow period is not uniform.Cash flow won’t be uniform as NFOs have launched at different times and each fund have offered different returns over a period of time.So for overall portfolio returns we will use XIRR returns.

ICICI PRUDENTIAL MUTUAL FUNDS XIRR

So overall portfolio returns – XIRR would be: 0.18 means : 18% annualized.

Its matter of debate whether one should invest in NFOs or not…( for me its objective is important than whether its New or ongoing) ..by the way it would have fantastic wealth creation if any one have invested consistently in last two decades.

Pl Note :Schemes of  ICICI Prudential Mutual fund chosen for reference only.Don’t have any bias towards schemes of ICICI Prudential.One can not guarantee repeat performance of any mutual fund scheme.

 

80C Tax Saving Deposits & Interest Rates 2014

As per budget 2014,deduction of Rs.1.5 Lakh is now available from 2014-2015.For conservative investor  Tax Saving Deposit is safe option.Today we have listed interest rates of few banks.

Majority of banks are currently offering interest rates in the range 9.00 – 9.25 for Gen depositors .

What are 80C Tax Saving Deposits:

Tax saver deposit is similar to general fixed deposits but comes with lock in period of 05 years.Principal amount get locked for 05 years.Depositor can chose different options like – Monthly interest payment,Quarterly Interest payment or Cumulative …depending on need of depositor.Interest income if reinvested is not eligible for 80C benefit.

Interest rates – PSU Banks:

80C TAX SAVING DEPOSIT RATES IDBI,BANK OF BARODA,SBI,BANK OF INDIA

Except SBI most of the PSU banks offers interest rates around 9.00 %.

Private Banks:

80C DEPOSIT INTEREST RATES PRIVATE BANKS -ICICI,HDFC,FEDERAL,YES BANK

Not quite much variation in deposit rates.

80C Deposits by HUDCO:

One can invest in HUDCO deposits of tenure 05 years and avail 80C benefit.Depositor need to mention whether he or she going to avail 80C benefit or not.

HUDCO is currently offering interest rate of 8.75% for General public and 9.00% for senior citizens.

National Housing Bank – NHB Tax Saving Deposits:

NHB is apex bank under RBI and regulate  Housing Finance Companies.

80C TAX SAVING DEPOSIT BY NATIONAL HOUSING BANK NHB

 

What will be your monthly interest income if opted for:

Consider scenario of 1.5 lakh deposited with interest rate of 9.00% and 9.50%

80C Tax Saving Deposits MIP Monthly Interest

Depositor can chose either monthly,quarterly interest or cumulative option.

If you are safe investor and looking for deposit some amount in these deposits then try to make hurry as probability of interest rates going down is higher and as much early you deposit money,earlier will be maturity and money will be freed earlier from lock in period…isn’t it..


Advertisement


Blog Author

Blog Author

Categories

Who's Online

12 visitors online now
6 guests, 6 bots
Personal Finance Blogger Map
12 visitors online now
6 guests, 6 bots, 0 members
Max visitors today: 22 at 06:56 am UTC
This month: 26 at 07-08-2014 05:38 am UTC
This year: 47 at 05-27-2014 06:48 pm UTC
All time: 52 at 09-14-2013 11:48 am UTC