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  • Category: Mutual Funds

    Safe Mutual funds to invest in as a senior citizen.


    Planning to carry out safe mutual fund investment? Searching for the best schemes? Here, on this page get financial advice from experts for resolving your query.

    I am a senior citizen retired nearly 10 years ago. Until now my source of income, apart from some pension, has been FDs with banks and post office schemes such as MIS and SCSS. with dwindling FD rates and rising cost of living added with inflation, the income has been effected.
    My friends suggested investments in mutual funds. Which funds or schemes would you recommended which are reasonably safe and can give me better returns than bank FDs?
  • #149008
    As you are a senior citizen retired 10years back it is better to invest in debt oriented hybrid schemes which will invest only a little portion in equities.
    You can think of the following five schemes.
    1. SBI Bluechip Fund.
    2.Birla SL frontline equity Fund.
    3.Franklin India Prime plus fund
    4.Mirad Asset India Opportunities Fund
    There are other debts based mutual funds from ICICI and HDFC banks also. You can consider any one of them.

    drrao
    always confident

  • #149019
    Presently mutual funds appear as a good investment option. There are basically two types of funds one is equity oriented and other is debt or a combination of debt and equity.

    As you are a senior citizen you should not go for high-risk high gain equity mutual funds. You can think of investing in combination funds or balanced funds which invest about 60% of their corpus in equity and rest in debt instruments. That will be safer for you as well as good returns will be there.

    Thoughts exchanged is knowledge gained.

  • #149032
    While investing we have to consider primarily three basic parameters.
    1. Capital safety 2. Return 3. Return

    There cannot be any one which has the best of all three. Each option will have some plus in one or other parameter and minus in another parameter.
    Usually we either balance them all at an optimum level or go in favour of a particular parameter ignoring e others.

    Being a senior citizen you have to consider the safety (Lowest risk on capital), reasonable return and possible liquidity. In comparison, bank deposits are the least risk for capital. That is the principal will not diminish. But other investments like in stock market or Mutual Funds, there is a risk of principal itself reducing. In MF itself relatively the debt funds are slightly less risky.

    However bank deposits score relatively low in return. But they are most liquid, as you can take your money almost instantly or without any waiting period when you need. Bank deposits have a slightly higher interest for senior citizen.

    So to be on an optimum level. you may park the major part of your funds in bank FDs and a part in senior citizen deposit scheme(govt scheme) with a bank.(However SCSS deposits have a lock-in-period unlike the normal bank FDs).

    A part of the funds you can invest in debt funds of MFs.
    A relatively lesser portion, you can invest in equity funds. As these will be fetching higher returns generally over a time, you may decide the quantum by considering what amount you can spare which are not needed for the present or in a relatively medium period say five years.

  • #149045
    I have read the question. I assume that you are around 70 years of age. Now let us come to the main question. Why do you want to invest in the mutual fund(s)? Simply because to get more return than the returns being offered by your present investment instruments. So, which fund would you invest?

    As all of us know that higher return is associated with greater risk. We also know that equity-based mutual funds can provide higher returns if the amount is invested for at least five years. But the people in the age-group of seventies may not have the luxury to plan for investment for a longer period. So, what should they do?

    Investment experts suggest investment in debt-oriented hybrid mutual funds. These funds are popularly known as MIPs. From the website of Value Research Online, it can be found that as on date, the average returns of MIP funds are 8.37% p.a for one year and 11.01% p.a. for five years period, respectively. These funds offer indexation benefits if the investor remains invested for more than three years.

    So, considering your circumstances, I would advise you to invest in a good MIP fund. The list of good MIP funds is available on the websites of Value Research Online or Morningstar India.

    Non-violence is the greatest Dharma; So too is all righteous violence.

  • #149046
    I have read the question. I assume that you are around 70 years of age. Now let us come to the main question. Why do you want to invest in the mutual fund(s)? Simply because to get more return than the returns being offered by your present investment instruments. So, which fund would you invest?

    As all of us know that higher return is associated with greater risk. We also know that equity-based mutual funds can provide higher returns if the amount is invested for at least five years. But the people in the age-group of seventies may not have the luxury to plan for investment for a longer period. So, what should they do?

    Investment experts suggest investment in debt-oriented hybrid mutual funds. These funds are popularly known as MIPs. From the website of Value Research Online, it can be found that as on date, the average returns of MIP funds are 8.37% p.a for one year and 11.01% p.a. for five years period, respectively. These funds offer indexation benefits if the investor remains invested for more than three years.

    So, considering your circumstances, I would advise you to invest in a good MIP fund. The list of good MIP funds is available on the websites of Value Research Online or Morningstar India.

    Non-violence is the greatest Dharma; So too is all righteous violence.

  • #149049
    The dwindling interest rates on FDs in banks is definitely a matter of concern for the seniors.

    In this situation, they have to park some of their hard earned money in other avenues also. The mutual fund has emerged as one of the prospective areas but please remember that the mutual funds are based on stock market conditions and have associated risks. Still one can go to invest a part of their kitty in them especially in balanced or debt-oriented funds rather than equity oriented.

    The mutual funds invest in a mixed portfolio of companies consisting of banks, pharma, manufacturing, construction, FMG etc and depending upon the performance of these sectors the mutual funds perform. So to predict which mutual fund will perform best is not an easy task.

    Another avenue is long-term non-taxable bonds of PSUs which are available in the secondary market and providing a good yield as the annual interest earned on them is tax-free.

    Knowledge is power.


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