How to make Rs 10 lakh in four years? | Value Research With such a short investment horizon, you would be forced to invest only in fixed income instruments
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How to make Rs 10 lakh in four years?

With such a short investment horizon, you would be forced to invest only in fixed income instruments

I want to make a corpus of ₹10 lakh in four years. How much should be my SIP? And in which schemes should I invest?
- Sailen

With such a short investment horizon, you cannot consider investing in equity mutual fund schemes via a Systematic Investment Plan (SIP). You can consider investing in equity only if you have an investment horizon of at least five years. This is because equity can be extremely risky in the short-term, you can lose your capital. And you can't take that risk since you need the money in four years.

That means you have to stick to a bank recurring deposit with assured returns to accumulate funds. If you have some savings already, you can consider investing in dynamic debt funds. But keep in mind that investments in debt funds would make sense only if you hold the investments for more than three years to qualify for the favourable taxation. This could be problematic if you are investing every month in a debt scheme. Every monthly investment should be held for more than three years to qualify for long-term capital gains tax. Long-term capital gains from debt funds are taxed at 20 per cent with indexation. Short-term capital gains are added to the income and taxed according to the tax slab applicable to the investor.

Try to save/invest around ₹20,000 per month. Since you would be earning mostly single-digit returns on your investments, it is better to be on the safer side and try to save/investment a little extra.


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