I invested Rs 3 lakh in Reliance Gilt, which is a liquid fund. But this fund is also volatile. So please guide me on it. Also, I want to invest Rs 10,000 every month in a tax saving fund starting from the next year. Kindly tell me names of 2-3 good tax-saving funds. My horizon is of 15 years.
- Vishal
Gilt Securities fund is not a liquid fund. It is liquid in nature but it is not a liquid fund. Liquid funds invest in securities with maturity of not more than 91 days. The value of investment in liquid funds rarely go down. Gilt fund invests in government securities. Money going into government bond looks safe but it is not completely safe. These bonds are likely not to make any default. But the government bonds with longer maturity are prone to interest rate risk. Whenever there is a expectation or changes of an increase in the interest rate, these bonds suffer. Because the existing bond would get interest at a low rate for the complete tenure. So first of all, understand, that this is not a liquid fund.
There are too many good tax-saving funds. But if I would have to name some, then I would say Axis Long Term Equity Fund and Mirae Asset Tax Saver.
This article was originally published on February 26, 2019.
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