How Much and where a Fresher should Invest?

ankit9t 1
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Hi Pankaj,

I have joined a MNC around 6months ago as a fresher. I dont have much knowledge about investment and how much should I invest in a particular component. Here is the list in which I am currently investing:

Total Salary = 25000 * 12 = 300000
My Expenses = 6250 * 12 = 75000
Mutual Funds through SIP = 5000 * 12 = 60000
LIC Policy = 30500
NSC = 25000
PPF/FD(thinking to buy) = 25000
Emergency Purpose = 15000
Rest in Bank = 70000

Please guide me if i need to edit some components from this.

financial-planning mutual-fund investment income-tax insurance
1 Answers

Please read below comments for your portfolio:

Try to avoid insurance for investment needs. If LIC policy you have taken is not a term insurance, it is not a good choice as will not give a good return and also not cover for a good sum.

You have not specified mutual funds which you are invested in, I am assuming these are tax saving mutual funds. There won't be any tax benefit on these after March, 2012 so you should SIP after that and rather invest into New pension scheme equity plans.

Rather than investing in NSC, you could have invested in 5 years tax saver fixed deposit, which is at the moment giving more than 9% rate of interest.

You should invest in PPF as it gives good and safe tax free return for a longer period.

You must accumulate a good emergency amount in saving bank account or liquid mutual funds.

Also, I would like you to go through answer to a similar query here: Regarding Financial Planning/review of profile.

Pankaj Batra5212

Hi Pankaj,

Thanks for your valuable comments.

My father has taken the money back LIC policy for me around 8 years ago(when I was 15). This is the first when I paid the yearly installment of 30500. I am Investing in the following mutual funds(not Tax Saving) through SIP: 1.HDFC EQUITY FUND - GROWTH PLAN (2000/month) 2.ICICI PRUDENTIAL DISCOVERY FUND -GROWTH (1000/month) 3.ICICI PRUDENTIAL DYNAMIC PLAN GROWTH (1000/month) 4.HDFC MIP-LTP-GROWTH (1000/month) Now I am thinking to invest some amount in FD.One question I want to ask at this point,for example I have a account in X bank and I want to apply for FD in Y bank(as they are offering better rate of intrest), so can I do that or should I open a new account in Y bank? Also I want to invest another 25000, So what do you suggest , should I go for MF through SIP or NSC/PPF/PF/VPF?

ankit9t•

You should add a large cap mutual fund too to your monthly SIP list. It will balance your portfolio. You can get Fixed deposit from any bank. Opening a bank account should not be compulsory for that, but generally bank push their bank accounts too along-with to increase their accounts sale. Regarding investing 25K more, it all depends on your need for this money. If you need it back in next 3 years, go for FMP or fixed deposit. If you want to invest for long term, you can invest into PPF/VPF/NPS. As you are already running SIP in equity FMs, adding some safer options like PPF/VPF will be better.

Pankaj Batra•
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