How to grow inherited money wisely

Inheriting money from your parents isn't just about numbers—it's a deeply emotional experience. It's their hard work, their sacrifices and their love for you, bundled into a sum that can shape your future. The responsibility? To honour their legacy while securing your own. So, when a reader recently asked - "I inherited some money from my parents. How can I grow this amount while keeping it safe, as it's all I have? I was thinking of putting it in a post office monthly income scheme and investing the monthly interest in mutual funds. Is it a good plan?" - we thought of offering even better options that can make your money work hard for you. Option 1: The 'safe but slow' approach Parking your inheritance in the Post Office Monthly Income Scheme (POMIS) would provide fixed monthly interest, which you could then channel into equity mutual funds for potential corpus growth. What's good Your principal remains safe. You have a consistent income stream. What's not-so-good Growth is limited because you only invest the interest amount, not the principal. Let's say you invested the maximum investable amount of Rs 9 lakh in POMIS and invest only the interest amount in aggressive hybrid funds , your corpus would have grown to Rs 14 lakh in five years, around Rs 23 lakh in 10 and nearly Rs 41 lakh in 15. If you instead invest the interest into a pure equity fund, like a flexi-cap fund, you could accumulate over Rs 14 lakh in five years, nearly Rs 25 lakh in 10 years and over Rs 47 lakh in 15 years. These calculations ignore taxation. Do note that interest earned from POMIS is taxab

This article was originally published on December 05, 2024.