I am a 52-year-old government employee and I wish to invest around Rs 4 lakh in a safe avenue. I also plan to invest Rs 10,000 per month in mutual funds through the SIP (systematic investment plan) route.
Could you please guide me to safe and guaranteed ventures so that I can spend my retired life with financial security?
K. Saraswathi
The only ‘safe’ avenue available for investors is the bank fixed deposit or other government-promoted schemes such as the NSC or the PPF. Any other investment that is even remotely market-linked is subject to volatility and fluctuation in returns. So, park the amount in a fixed deposit or the NSC.
Again, with respect to your SIP investments, there is no fund that can give you assured or guaranteed returns.
You can consider investing regularly in the NSC or PPF so that you accumulate a reasonable corpus for your retirement.
But if you can take a little bit more risk, you can consider balanced funds. Schemes such as Tata Balanced, ICICI Pru Balanced and Birla Sun Life 95 have good long-term track records. Split the amount equally among these three funds.
Monitor their performance regularly and book profits in case of substantial rallies.
Once you accumulate a corpus with these funds, then closer to retirement, exit these funds. The amount accumulated can be parked in a fixed deposit that gives you a monthly interest payout.
The interest amount can be invested in a monthly income plan. Some plans with a proven track record are HDFC MIP Long Term, Reliance MIP and Birla Sun Life MIP.
