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Best option for my mom to invest Rs 2.5 lakh for two years

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Last Updated: May 20, 2020, 05.08 PM IST
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My mother is a government teacher. She has about Rs 2.5 lakh as savings. She wants to invest it for one to two years. I have explored the gold market, mutual funds and FDs. While FD has assurance but its yield is quite low. The gold market and mutual funds have uncertainty during this COVID pandemic. Please help.
-Utkarsh Deep


To begin with, it would be best to let your mom take care of her investments. Let her decide investments according to her personality. When you start taking care of your mom's investment, you would make investment decisions that may appeal to you. However, your choices may not appeal to your mom. If you choose any risky investment and lose money, she can even get upset. In short, do not treat her investments as yours.

Never chase returns while choosing investments. You should always choose your investments based on your goals, investment horizon, and risk profile. You have stated that your mom wants to invest for two years, that means she should stick to safe investment options like bank deposits and debt mutual funds. As you know, debt mutual funds are going through a lot of trouble these days. Would she be interested in taking extra risks and uncertainties to earn a one or two percent extra? You should speak to her about it, before deciding to invest in a debt mutual fund.

If you are new to mutual funds, please do not handle your mom's investments yourself. Seek the help of a mutual fund advisor. You should gain some experience as an investor and learn a little about investing in mutual funds before investing directly in mutual funds.

(If you have any mutual fund queries, message us on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.)
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