Nishank Sabarwal replies to queries

I am 42-years old and want to invest Rs 7 lakh in safest and tax-efficient avenues offering good returns. The rest of my portfolio includes mutual funds (large-cap diversified and mid-cap ), real estate and gold. I don't need this money till retirement. Where should I invest?

VINEET SHARMA

Invest Rs 70,000 in PPF and invest the balance in post office monthly income scheme (PO-MIS ). Open a RD account in the same post office and ensure that you invest the monthly income received from your MIS into the PO-RD . You can also consider investment in fixed maturity plans (FMP) and company FDs with high credit rating to benefit from higher interest rates than banks. Returns from POMIS, RD, and FD are taxable as per slab rate and long-term capital gain from FMP is taxed at 10.3% flat or 20.6% with index.

I am 45-years old and recently took VRS from my company and the monetary compensation is around Rs 27 lakh. I intend to invest this money for a time period of 10 years as I would not need the capital or the interest during this period. Kindly suggest an investment plan. Also, please comment whether Nabard would be coming out with bond issue in this financial year.
AKHILESH MISHRA

I advise you to invest 50-60 % of your money in large-cap mutual fund schemes and the balance in debtoriented MF schemes with dividend option. NABARD is planning to re-open the issue of Bhavishya Nirman Bond. However, contact the company for additional details.

I am 51-years old and have an investible surplus of Rs 4 lakh after doing regular SIPs and setting aside for contingencies. Please advise on where I should invest this amount for a longer time frame to get higher returns than fixed deposits. Secondly, I was told that MetLife is the most cost-effective Ulip. Please advise.

BHARAT CHIKALIA

Company FDs offer better returns than bank FDs. Otherwise you could even opt for hybrid schemes of MF. To answer your second question, as per IRDA norms on new charge structure for Ulips, the regulator has defined a cap on charges. Hence, all Ulips will have a similar cost structure. What's more important is the investment strategy of the Ulip. Ensure it has a sizeable large-cap stocks portfolio.

I am 40-years old and my son is 5. I have kept aside Rs 2.50 lakh for his education
I want to invest this for 12-13 years. Please suggest

THAMARAPUDI DAMODAR RAO

You should invest Rs 50,000 in a company fixed deposit which has a high credit rating. Park the balance amount of Rs 2 lakh in a large-cap mutual fund and index fund.