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Reviving a thread:
So where does one 'invest/ park' one's excess capital in today's scenario?
1. Mutual funds? All my/wife's mutual funds are virtually unchanged in value (if +ve at all). Average ROR is 2% (I would have fared better in FDs)
2. FDs? All bank FDs now offer abysmal ROR which don't even beat inflation
3. Gold/ETFs/SGBs? All time high. Though I am investing in SGBs, they aren't a regular feature
4. Equity? A big question is where? Blue chip only? PSU?
5. Real Estate? This doesn't seem like an easy thing. Buying a flat and selling it not only involves enormous effort but with the glut in the real estate sector who will buy at all an owned house instead of buying directly from the builder?
6. The usual avenues of PPF have been fulfilled (like clockwork on 02-Apr every year). VPF? NPS?

Any other suggestions are really welcome. I'm not looking for a market killing return, just decent enough to beat inflation.

I learnt this the hard way. Same as you, my returns were less than savings account interest. Mutual Funds are not the fill-it-and-forget-it success mantra as they are advertised. The reason being that most of the new investors just go by regular SIP (or investing as soon as saving account has surplus) which is not the correct way to invest as far as I understand it. Unfortunately all the advertisements on TV etc promote SIP heavily.

Just like investing in share market, do some research, see the patterns, wait for the right opportunity to invest. That means we have to be active rather than blindly investing as soon as we have surplus or paying SIPs and thinking our money would triple after 5 years.

• If you have senior citizen parents then Senior Citizen Saving Schemes
• Senior Citizen FDs with same above criteria
• Kisan Vikas Patra
• National Saving Scheme
• If you have a daughter then Sukanya Samriddhi Yojana
• LIC policies with long tenure of 10-16-21 years
• 1gm gold per month without constantly checking its rate

These are what I found to be useful.

My investments are like:

1. PPF : Topped 3 lakhs contributing to PPF (1.5 lakh in my account + (75k + 75k) in Wife/minor son accounts)

2. Mutual funds : Redeemed all of my MFs last month : Got paltry 0.5% returns. Continuing wife's contribution though. Since last week appreciation in her portfolio around 5%.

3. Post office : Put in TD account for 5 years @6.7%. Safer than banks I feel considering what happened to PMC and Yes banks. Might use the interest for expenses, if something goes wrong on job front. Also have MIS account.

4. Real estate : I was planning to sell my Bengaluru apartment and rent closer to son's college next year. Good for me, I did not sell it last year else would have been stressful, if job situation changes.

Cutting down drastically on all unwanted expenses - Stopped cable (only Prime video now), paper, domestic maid. Corona forced WFH reduced petrol charges, unnecessary travel, eating outside, watching films in theater etc.

I have been able to cut down expenses by 30% from the past four months.. I will continue cutting down my expenses, if the world continues to throw a curve ball at me. :)

RBI Floating rate bonds may be better option than Post office FD. Current interest rate is 7.15% (which will be reset in Jan 2021). Interest rate will always be 0.35% more than National savings scheme.

NPS with Government Bonds option may give good returns (as volatilities get averaged out).

VPF - Yes, as I have written in another thread I should have started this option long time back.

Invest in Index funds. A combination of Nifty 50 and Nifty Next 50 funds. Advantages. You get market returns that active mutual funds have not been able to get or beat. Invest for the long term regularly through a SIP. Long term means 10 Years +. Increase SIP as and when you get a salary increase. Put extra money as and when you get it. You can expect a reasonable 10 to 11% return over a period of 10 + years. Thats it. Simple

You mentioned paltry returns from MF. Over what time horizon? IMHO, it's simply not worth investing in most active MF's because they hardly beat the benchmark. Suggest investing in index funds - Nifty 50 and Nifty Next 50 funds through the direct route.

Can we invest more that 1.5 Lakhs in PPF? I was of opinion that we can only invest maximum of 1.5L in PPF in a financial year.

And Sir can you please elaborate slightly on what MF you owned and what was the time horizon, SIP or lump sum? 0.5 % return is worrisome.
Thanks

You can invest Rs.1.5 lakhs annually in each individual PPF account in the name of wife and minor child. But you can claim investment of only one account upto Rs. 1.5 lakhs for tax deduction under section 80C of Income tax.

As far as mutual funds are concerned, they are useful in long terms. Longer the investment time span better the returns. My current mutual fund portfolio is giving me returns at 17.58% annually with investment period of more than 6 years. There are many other factors involved in mutual fund investment though.

Can you please give a definite source for this information. The total amount that can be deposited in all accounts with one PAN number is 1.5L according to information available everywhere.

I have been depositing 1.5 lakh every year in my PPF account. Apart from this I also deposit 75k each in my wife and minor son's accounts (together 1.5 lakh). This was suggested by the bank itself. But I can claim tax benefits for only my account amounting to 1.5 lakh.

You are getting confused with what you can do with multiple accounts. You can have only one PPF for one PAN number. If you have kids and they don't have PAN, you can open an account in their name and act as guardian/parent.

You can open one PPF account for each PAN you have in family - your, wife, parents, etc. You can contribute upto 1.5L in each account. But you can only claim deduction of 1.5L only for yourself. That is it. So if you are earning and other members are not, then you can contribute to their account (practically you are gifting money to them).

I am 99% sure you cannot invest say 1.5L in your and 1.5L in your kid's account irrespective of whether they have PAN or not. My both kids have PAN Numbers but being minor, all their investments are tied to my PAN as guardian / parent so there is no way I can invest 1.5L in each of their account's if I am already investing in mine.
Like today, I invest 1.5L for myself and 1.5L for wife in our respective PPF accounts but I cannot additionally invest 1.5L for each of my kids. This is not allowed.

PPF (bank) accounts have a limit of 1.5L, beyond which you can't deposit in a year. However, you can deposit 1.5L/account in other accounts like that of your kid. While claiming the 80C benefit, you can claim it for the 1.5L investment in your account only (and can't claim any benefit for deposits made in kid's account). That's how it works for us.

https://www.livemint.com/money/perso...486882698.html

Check Point# 2

It is not about 80c. Keep that aside for time being. One just cannot have their own + kid's account and add 1.5L in both. You can have 1.5L shared between the two if you want but not in both.

Interesting. The one I was talking about is the case of a major kid with an independent account and hence there was no such restriction.

Also in case if BHPian Altolxi posted, the mother must be the guardian for kid and hence, they're able to deposit additional 1.5L (75k+75k) into those two PPF accounts.