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Where should I invest for daughter's future education and marriage? Answers to your personal finance queries

Proud young asian couple with keys and wooden house modelling

Proud young asian couple with keys and wooden house modelling  

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Q. My husband is working in an IT firm and his current CTC is ₹13 lakh per annum. After our monthly expenditure of about ₹50,000, we can save some good amount. Please suggest an investment plan to buy a home.

Shalini Rathore

A. We do not know when you wish to buy a home, how much you can save and what the budget for your home is. Please get these estimates so that you can save in a more focussed manner and are able to choose the right instruments.

If your home-buying plan is within the next three years, then you should stick to simple products such as recurring deposits and use some low-risk liquid funds and low duration debt funds to add any periodic lump sums you may accumulate in your savings account. If your goal is over five years away, then consider investing at least 50% in multi-cap equity mutual funds using monthly SIPs and the remaining in a combination of recurring deposit and short-term high-quality debt funds.

Q. I am 40 years old. I have a daughter studying in Class One. I purchased an SBI Smart Champ insurance plan for my daughter four years ago and pay about ₹1,000 as monthly premium. This is for her future education and marriage. Can you please suggest other investments which will return more and are safe considering my age and retirement.

Vijay Devagirikar

A. The policy you have taken is a non-linked policy and may not see high returns. Based on your premium, I am assuming the sum assured will not be more than ₹20-25 lakh. You can consider Sukanya Samriddhi Yojana offered by the government, exclusively for a girl child, with a fixed interest and guaranteed return.

But other than that, given that this policy is not one that will yield optimal returns, you should consider some market-linked quality products like mutual funds in order to build enough corpus for your daughter and make sure you save for retirement.

Seek the help of a fee-based adviser to help you make an estimate of how much you need to save for your daughter and for your own retirement. This way, you will at least be on track in terms of knowing how much to save or even alter your expectations of what you can provide.

Q. My wife is 57 years old. She has ₹50 lakh in NHAI bonds at an interest rate of 5.75%. The bonds are due for redemption on December 31, 2019.

I need your advice as to how the amount can be gainfully invested on maturity. I have no pressing requirement for this amount. My wife would like to receive some money for her monthly expenses and there is no pressing requirement otherwise.

A.N. Kunjunny

A. Options like Post Office Senior Citizens’ Scheme and LIC’s Pradhan Mantri Vaya Vandana Yojana would work well to get good returns as well as regular income.

However, they are available from the age of 60. Until such time, you can consider investing in FDs and quality corporate deposits and post office schemes to derive interest income for your wife’s monthly needs.

You can consider deploying the remaining in liquid and ultra-short debt funds with very low risk and about 20% in multi-cap equity funds using the systematic investment plan or systematic transfer plan to deploy it slowly into the market. Have a minimum three-year horizon for the debt funds and allow the equity funds to grow for the long term.

(The author is Co-Founder, Redwood Research)

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Printable version | Dec 9, 2019 10:06:57 PM | https://www.thehindu.com/business/ask-us/article29614509.ece

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