An Ideal Parking Spot For Your Surplus Money

Investors who need money after short period of time within span of 6 months to 2 years for various reasons such as to pay the expenses of vacation, pay fees for your child in foreign university or for daughter’s marriage, paying premiums etc.

Most people leave money in their saving A/c’s ,which earns mere interest of 4% and in Current A/c’s where no interest is earned whereas investing in debt oriented funds gives more returns and helps your money to grow.

Here are some options through which you can make investment for short term:

            Accrual Funds:

• Debt Funds
• Invest in Short to medium maturity papers of medium to low quality, taking credit risk for generating higher yield.
• Focus on earning interest income primarily from the coupon offered by securities they hold in the portfolio.
• Buy and Hold strategy.
• Taxed at 20%with indexation if held for 3 years.

            Monthly Income Plan (MIP’s):

• Debt oriented hybrid scheme.
• It is a scheme which invests in debt and equity schemes.
• Invest 15-20% of their corpus in equities and remaining in fixed income instruments.
• MIP streams to provide steady stream of income in form of dividend payments.
• It is typically attractive to retired persons or senior citizens without other substantial sources of monthly income.

Who Should Invest?

• Investor who do not want Volatility in their fixed income portfolios
• Investor willing to get Stable Returns.
• Conservative investor with a moderate risk profile,
• Debt oriented schemes are relatively less volatile than pure equity funds.
• Investment could be done in Lumpsum or on Monthly Basis.
• Investment in small amounts such as Rs.1000 could also be done.

Consult your Financial Planner to make use of your Idle money.