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Should I invest the proceeds of an FD in a balanced fund?

Dhirendra Kumar talks about alternatives for long-term fixed income

I want to invest the maturity proceeds of a fixed deposit in HDFC Balanced Fund. What do you suggest? Also, should I invest in lumpsum or through an SIP?
- Menon

If you are investing for the first time and fine with any interim decline in the value of your capital, assuming that you are unlikely to need any periodic income from that, balanced fund may be a good vehicle. The interest on fixed deposit is coming down gradually. If it is your long-term fixed income investment, there could be more conservative options like equity income fund and MIPs of mutual fund which are conservative allocation funds. They could be a better way to invest and never invest a lumpsum. Even if you have all the money, spread your investment over six months or one year so that you are used to it.

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