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Investing a lumpsum for three years

Since you have an investment horizon of only three years, you should invest the money in relatively safer avenues like bank deposit and debt mutual funds

I want to invest a lumpsum amount of ₹50,000 for the marriage of my daughter for a period of three years. Please suggest the right choice of mutual funds to grow the money.
- Rajiv

Since you have an investment horizon of only three years, you should invest the money in relatively safer avenues like bank deposits and debt mutual funds. You can consider parking the money in a dynamic debt mutual fund scheme for a period of three years. These funds may offer you a slightly superior after-tax returns than bank deposits, especially if you are in the highest tax bracket. Investments in debt mutual funds held over three years qualify for long-term capital gains tax of 20 per cent with indexation benefit.

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