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Invest Rs 5 lakh over five years in a mix of equity, debt, gold, and NSC for growth
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Equity mutual funds (40%) offer expected returns of 12% over five years
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Debt mutual funds (20%) and gold (20%) provide moderate returns around 10%
If you want to grow your savings over the medium term, there are some smart options to consider with at least a five-year investment goal.
Investment instruments like fixed deposits and debt mutual funds can offer stability with moderate returns. For higher growth, you may consider equity mutual funds or gold, based on your risk appetite. Additionally, the government-backed National Savings Certificate (NSC) is also an ideal option for conservative investors who wish to secure higher returns than FDs.
A planned investment strategy through these diversified tools can help you grow your money substantially over five years, supporting medium-term goals like home buying, education, or a dream vacation.
Let’s assume you have Rs 5 lakh to invest lumpsum for a five-year period.
Here’s a likely allocation that could be suitable for you:
Equity mutual funds: 40%
Debut mutual funds: 20%
Gold: 20%
National Savings Certificate: 20%
Rs 2 lakh or 40% in equity mutual fund:
Time: 5 years
Expected return: 12%
Investment: Rs 2 lakh
Estimated return: Rs 1,52,468
Final value: Rs 3.52 lakh
Rs 1 lakh or 20% in a debt mutual fund:
Time: 5 years
Expected return: 10%
Investment: Rs 1 lakh
Estimated return: Rs 61,051
Final value: Rs 1.61 lakh
Rs 1 lakh or 20% in gold:
Time: 5 years
Expected return: 9 to 10%
Investment: Rs 1 lakh
Estimated return: Rs 61,051 (assumed 10%)
Final value: Rs 1.61 lakh
Rs 1 lakh or 20% in NSC:
Time: 5 years
Expected return: 7.7% (FY25)
Investment: Rs 1 lakh
Estimated return: Rs 44,903
Final value: Rs 1.44 lakh
Hence, an investment of Rs 5 lakh in a mix of investment instruments for five years can turn into Rs 8.18 lakh, reflecting a 63% gain.
One may choose to switch the investment tools or increase allocation in a certain asset based on risk appetite. However, equities are volatile in nature and their returns are not guaranteed. Hence, it is advisable to discuss your investment plans with a financial advisor to avoid any potential difficulties in the future.
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