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  • Category: Investments

    Investment choice between two options for better returns

    Confused between various options for investment? Find financial advice from experts on this page.

    One of my friends is 58 years old. Considering her old age requirement, she is now interested to invest Rs 3 lakhs in a sector from where she can earn some monthly return. Her monthly expenses after medicines is rather high. Moreover she might have to file a suit in near future related to her property which will also incur an extra liability.
    So to earn a monthly return, which option will be best suited for her? Post Office MIS or LIC's Jeevan Akshay VI? In case of latter option, she can never take back her invested money even in case of emergency. As she has been going through different hazards and uncertainties, which option will bring her higher monthly return? Or is there any other investment opportunity to earn rather higher monthly return?
  • #140634
    For monthly return MIS sounds reasonable but it doesn't give you much returns in terms of percentage. The same is the case with the LIC. But compared to MIS, I'd say MIS is more secured in terms of funding. As the post is now turning into a bank. And they are likely to give you more security for the money invested. Considering both LIC and MIS being in debt instruments, don't expect much higher returns. Just diversify the investment in multiple investment methods.

    I think diversifying in FD, MIS and LIC would be ideal. But if you have to choose only one out of many, then my suggestion would be go with MIS due to it's safety. Otherwise you can choose LIC if you want. But MIS is more secured and also less hassles for withdrawal with new ATM and other options coming along.

  • #140670
    I have read the question many a times. Considering the circumstances of the lady, it would not be prudent for her to lock the money in Post Office MIS or in LIC Jeevan Akshay. LIC Jeevan Akshay is not an investment, it is an insurance. Every person must unerstand the difference between investment and insurance.

    I would advice the lady to perk her money (Rs. 3 lakh) in liquid fund or better in ultra-short debt fund. It would solve the issue of liquidity, and, at the same time, she would get better return (around 7.5%-8% per annum) than savings account or recurring deposit account on her investment. Her capital would remain protected.

    In absence of greater details, further advice is not posssible.

    Beware! I question everything and everybody.

  • #140759
    At this age it is advisable for her not to take risk with her money. Three lakhs is not going to fetch much even if there is a difference of 2 or 3 percent in returns. She has to understand that higher returns are associated with higher risk and higher waiting time.
    Going through the situations she is now placed and she may be facing, it is suggested that the best thing for her is to keep her money in a nearby bank, with due nomination recorded. Let the deposit be for as period which gives her maximum interest rate. Let the interest be for quarterly intervals, as that may fetch a little more than monthly amount.
    Bank fixed deposits though are fixed are having better liquidity than many other investment and savings avenues. In case of any emergency requirements, she can always have a direct discussion with bank officials, and they may be able to give her some solutions which incur least loss.

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