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Due to change of jobs my husband has withdrawn his PF amount. Where should he invest this amount of around Rs 20 lakh? The objective is that the instrument has to be safe, with a 15-20 year lock-in.
- Payal Sharma
When investing a large corpus, you should not only consider investments that give you returns but also the ease of investment and convenience. The provident fund is a safe instrument as it guarantees returns and earns tax free returns. This way, over time it accumulates a corpus for your future. If you are looking for a safe instrument, you have the option to invest in fixed tenure and guaranteed return instruments such as fixed deposits, the NSC and other post office fixed term options. Investments in such instruments are safe, but are not tax efficient as the interest that these earn is treated as income and added to your overall income and taxed accordingly.
If you are looking for a tax efficient instrument, the mutual fund is an option that you should consider. However, investments in mutual funds are not risk free. There are several types of mutual funds with varying risk, which can at best help you to reduce your risk but not completely negate it. You can explore our website to understand about different mutual funds and the assets that they invest in, the risks involved and accordingly consider investing in a fund that suits your investment needs.
This article was originally published on April 15, 2013.
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