For a saving term of two years, fixed deposit is a good option

For a saving term of two years, fixed deposit is a good option

I am 27 years old and earn 22,000 per month. I want to get married in the next two years. Which investment avenues should I look at? How much life cover should I have? I want to open a Pubic Provident Fund (PPF) account. Can I deposit 70,000 at one go?

—Rahul Sharma

The investment avenues will really depend whether you want to use this corpus for your wedding. If yes, then the investments should be liquid enough so that they are available when you need them. Also they should be safe enough as your investment horizon is short to medium term. In this case, bank fixed deposits will work best for you.

You can open a PPF but do not deposit the complete amount as this investment will not be accessible in two years. Only in the scenario where you believe you don’t need these funds you can consider locking in the entire 70,000. In the future, try to deposit the same in PPF account at the start of each fiscal year to maximize interest benefits.

You should buy a term cover if you have dependants. Otherwise go for it when you get married. The cover can be 8-10 times your annual income.

My husband and I want to save 50,000 per month. We have opted for a mediclaim policy of 5 lakh. We also have monthly systematic investment plan of 10,000 ( 5,000 in mutual funds and gold each). How and where should we invest the money over the next 10 years? We have also invested 20 lakh in a property, which will be given out on rent.


It is good that you are serious about savings. As you have a long-term horizon, you should take higher exposure to risk and hence equity-based mutual funds should form a majority of your portfolio. You should have four-five funds in your portfolio across categories. Among large-caps, you can consider ICICI Focused Blue Chip and DSP BlackRock Top 100. In the mid-cap space, IDFC Premier Equity and HDFC Mid Cap Opportunity are good options. Among diversified funds, you can look at HDFC Equity and Fidelity Equity. HDFC Prudence and HDFC Balanced Fund are good hybrid funds.

Lastly, buy gold exchange-traded funds or a gold fund. But make sure your exposure to gold is not more than 10%. The reason why we want to emphasis on the same is whenever an asset class performs exceedingly well (which has happened in the case of gold), there is trend of overexposing oneself to that. But that asset class may not perform all the time. Hence. the need for asset allocation.

You already have a mediclaim. With the portability benefit now available, ensure you have the best product by switching insurers, but look at the conditions. Also, both of you should consider taking a pure life cover. You can look at a cover of 8-10 times your annual income.

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