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No Zero-risk Fund

Ashok Wants to know which fund guarantees the safety of principal amount

I have Rs 3 lakh which I would like to invest in a good mutual fund for about one year. I do not want to take any risk on my principal amount. Which mutual fund should I invest into?
-    Ashok

Since you do not want to take risk on your principal amount, mutual funds are not the right way to go. No mutual fund gives guarantee of capital preservation. You must consider investing in a bank fixed deposit as it will give you the guarantee of safety that you require along with assured returns. But do keep in mind that early withdrawal in a bank fixed deposit will result in a penalty. So be sure of the time when you will need your money back and accordingly select the time frame for investment.

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