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Should I redeem part of my EPF investment to invest in equity?

Irrespective of your investment horizon, one-third or one-fourth of your total corpus should be in fixed income, suggests Dhirendra Kumar

I work in a private company. My EPF contribution of around three-four lakh is currently growing at 8.5 per cent. As interest rates on EPF are expected to come down in coming years and I don't need this money for the next 10-15 years, shall I redeem a part of it to invest in equity funds for better returns?
- Kashinath

I think, if you don't need this money for the next 10-15 years, then a good proportion of this fund, if invested in equity, can yield better returns. But I also think that every investor should have at least some allocation towards fixed income. Irrespective of your investment horizon, one-third or one-fourth of your total corpus should be in fixed income.

So, look at your EPF fund with respect to your entire corpus and evaluate whether the above criteria with respect to fixed income allocation is fulfilled or not. It is not a good idea for any investor to have the entire investment in equity only. If this EPF exceeds the above threshold and your equity holdings are comparatively less, then you can certainly invest some more amount in equity.

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