Anil Rego, personal finance expert and CEO and founder of Right Horizon joined IBNLive readers for an interaction on financial planning and investment tips.
Q. I'll be retiring after 10 yrs. Should I invest in fixed deposit or pension plans for retirement planning? Which will give more and guaranteed returns? Asked by: Madhu
A. It is good that you are planning to do it well in advance. it is good to do combination of investment option. you may look for safe options like PPF, bank Fix deposit and Bonds which are safer in nature. Monthly income plans from mutual funds are also good option. some exposure to equity can be useful to beat inflation. you can look for balance kind of mutual funds.
Q. Hello sir, Kindly suggest the best risk free options to receive sustained & guaranteed returns of 20-40 percent. Any instruments you feel can best fit this criteria? Asked by: Paresh
A. For investments, risk and returns go hand in hand. risk free investment like PPF gives returns between 8- 8.5 percent which is tax free. Higher returns comes with higher risk.
Q. In recent times, lot is being said about gold being a good or bad investment. What is your take on gold as an investment avenue for individual investors? Asked by: GK Sastry
A. Gold is a good investment avenue for long term. it may see volatility in short term. So I would suggest a systematic investment in gold. SIP into gold mutual fund can be a good option.
Q. Will FD interest rates hit the 5 percent (lowest) mark seen in 2005 any time again? What is the percentage of savings that one can ideally hold in bank FDs? Asked by: GK Sastry
A. Looking on the current market scenario, it may not come down to 5 percent. However, it may come down marginally from current levels. investment in FD depends on the risk appetite and individual's tax rate. for a risk averse investor FD could be a good option. out of his debt portfolio, 25 percent- 40 percent can be allocated to FDs. However, if individual is in higher tax bracket, FD is not a good option. since post tax FD returns are low.
Q. I am a senior citizen having around Rs 2 lacs in my Savings Bank account. Kindly suggest where to invest for a period of one year. Asked by: Shyam Vadalker
A. Considering your age and risk profile and investment tenure, bank fix deposit could be a better option. For senior citizens, bank usually offers 25- 50 bps extra interest.
Q. Please suggest a term insurance with accident and disability factor included. I'm 31 year self employed businessman. I want a cover of 1.5 cr? Are there any term insurance plans which gives back premium on maturity with Guarantied returns? Asked by: Sajith
A. For term plan, you can go online and compare the features and benefits. Most companies like SBI life, ICICI Prudential etc. offers accidental and critical illness option. Most of the companies offers return of premium option where you will get the premium back on maturity. However, the premium may be higher for such option.
Q. I have SBI tax gain dividend ELSS, should I sell it or stay with them. I bought it twice when NAV was Rs 40, some 4-6 yrs back. Please advice. Asked by: Monty
A. You can hold the fund as of now. you can consider exit from it when market see a spurt. you can book the profit and reinvest into open ended mutual fund scheme.
Q. What are the safe financial instruments you recommend other than gold and equity? Asked by: Pawan
A. I assume that safe instrument means investment option with no risk. Equity and gold are not risk free investment option. you can consider option like PPF, bank FDs as a risk free option. Also, debt mutual funds and Bonds also fall under low to moderate risk investment option.
Q. Hello sir, my age 27 and earns around 6 lakh per annuam. Family dependend on me. need advise on retirement plans,your advise on term plans, Should i invest in PPF and please advise if other saving and investment are required as I am married and sole earner? Asked by: Rakesh
A. Since you are a sole earner in the family, term plan is must for you. you can consider the future expenses and decide the cover require for you. PPF is a risk free investment option which offers tax benefit as well. however, you can invest an amount which can give you tax benefit under section 80C. for your retirement, you have enough time to built the corpus and you can take risk on investment so i would suggest you to start SIP into Equity diversified mutual fund. initially, you can invest into large cap category of mutual funds. increase your savings and investment as your salary grows.
Q. Would it be advisable to hold onto ELSS investments investments made in 2009-10 in HDFC/SBI MFs? Are these still being actively managed by the fund houses? Asked by: GK Sastry
A. ELSS funds are actively managed mutual funds. fund manager manages based on the market conditions. In 2009-10, Equity market show a hugh rally. In case you are in a profit in current market scenario then you can hold it for sometime. you can book profits when market see a spurt.
Q. How can I buy bonds which give yield more than the bank deposit interest? Asked by: prathap
A. Bonds can be purchased through demat account which is the easiest option available. you can buy it through you brokers who deals with bonds or you can consult your financial adviser too. for bond, Yield varies for each bond. yield could be one of the criteria for selection of bond. but, it is good to look at other parameters like credit rating of the bonds, maturity etc. bonds with higher credit rating should be preferred option.
Q. I would like to take some pension scheme for my father. He has 4 yrs to go for retirement. Any plan that I can take now so that he gets some money every month? Asked by: s
A. All pension plan offers monthly/yearly income option. Since you have 4 years time frame, you can look for investment into other asset class at the moment and buy immediate annuity plan at the time of retirement. you can do combination of FD and mutual funds. in mutual fund you can consider investment into Debt Short term fund and MIPs. you can do balance funds as well. this would have certain amount invested in equity which helps to beat inflation. Bonds can also be considered as investment option.
Q. I'm recently got married. I'm 30 yr old female. My income is 6L. Please suggest financial instruments I should invest in other than gold and equity. Not interested in Mutual fund and equity. Should I take 30 L loan and invest in real estate. I have 10L in FDs. Please guide where should I invest every month- loan for real estate/retirement planning/FDs? Asked by: Sneha
A. At your age, equity could be a better option for investment. however, if you are not comfortable with equity or mutual funds then you can consider investment into real estate or FD for your retirement need. before going for a real estate option, do a quick check on you short term financial goals and set aside an amount into FD or any other asset class which can be liquidated at the time of requirement. This is very much needed because real estate is relatively il-liquid investment option. Before you go for a loan, check your net saving. ideally, EMI on loan should be limited 40 percent of your monthly income.
Q. What is the FMP of mutual funds return for an year? Asked by: prathap
A. Fixed maturity plans are close ended scheme which invest in debt securities like T Bills, Commercial papers, Government securities. FMP returns varies based on the interest rate scenario. since most part of money goes into bonds, FMP gives better returns in falling interest rate scenario compare to raising interest rate scenario. the returns varies based on the market condition. Broadly it varies between of 6-13 percent.