I had pulled out all my resources for my daughter's medical treatment and have used 3/4th of it. Now I am left with ₹5 lakh in my savings account. I need help to identify one or two liquid funds to park the money for eight to nine months. Please help. I should be able to redeem any amount whenever required in case of an emergency. I also want to minimise tax payment.
- Dipankar Chakraborty
We have selected ultra short-term debt funds for you as they are more suited park money for eight to nine months. They may also give you a little more than liquid funds. You can choose Franklin India Ultra Short Bond Fund - Super Institutional Plan or ICICI Prudential Flexible Income Plan - Regular Plan to park your money. You should opt for the dividend reinvestment option to minimize your taxes. Under dividend reinvest option, all gains will be treated as dividends and it will get reinvested as fresh units on a daily basis. So, there will be either zero capital gains or very minimal gains.
Also, Keep a small part of it in your savings account for an emergency, as it will take a day to get the money from these funds.
This article was originally published on September 17, 2015.
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