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Business News/ Opinion / Online-views/  Ask Mint Money | FMPs offer similar returns to FDs but are more tax-efficient
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Ask Mint Money | FMPs offer similar returns to FDs but are more tax-efficient

Ask Mint Money | FMPs offer similar returns to FDs but are more tax-efficient

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I am 32 years old and my current salary is 2 lakh per month. My monthly investments in mutual funds (MFs) are 11,500—DSP BlackRock Top 100 Equity-Growth ( 1,000), HDFC Top 200 Fund–Growth ( 1,000), Franklin India Bluechip Fund Growth ( 1,000), ICICI Prudential Dynamic Plan Cumulative ( 1,000), HDFC Mid Cap Opportunities Fund Growth ( 1,500), Sundaram Select Midcap-Appreciation ( 1,000), Reliance Banking Fund-Growth Plan-Growth ( 1,500), ICICI Prudential Technology Fund–Growth ( 1,500), Reliance Diversified Power Sector Fund Growth Plan-Growth ( 1,000) and Birla SunLife Midcap Fund Plan A–Growth ( 1,000). I have four unit-linked insurance plans in which I invest 10,485. I have a fixed deposit (FD) of 5.25 lakh and 3 lakh family floater plan. From last year, I have been investing 20,000 annually in infrastructure bonds. I have a parental house. However, I plan to buy another house. I pay 27,000 as rent and an equated monthly instalment of 6,500 for my car. My long-term requirements are 50 lakh for my son’s education in the next 15 years and 1.2-1.3 crore to buy a house within 10 years. Will my current investments help me meet my goals? I also have 35,000 surplus per month. Please suggest a term insurance ( 1 crore) and what is your view on fixed maturity plans (FMPs)?

—Sidhartha Patnaik

Your income level and your current savings do not match with each other. Your savings need to be increased.

You should move your fixed deposits partially to FMPs. These debt funds are locked in for a specific time—six months to three years—and offer returns similar to FDs but are more tax efficient. You have invested too many Ulips. You need to check their performance, expenses under various heads, surrender charges and then decide if they need to be continued. You can consider buying a term plan online.

As far as your goals are concerned, you can achieve it. But ensure that you save regularly and increase your savings every year along with the increase in your salary.

Surya Bhatia is a certified financial planner and principal consultant, Asset Managers.

Queries and views at

mintmoney@livemint.com

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Published: 01 Dec 2011, 10:17 PM IST
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