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    I am 44 years old and I want to invest Rs 3 lakh for 5-7 years. Where should I invest?

    Synopsis

    Assuming you have most of your investments in debt and/or real estate, you can invest in good large- and multi-cap funds, given your time horizon.

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    I am 44 years old and I want to invest Rs 3 lakh for 5-7 years to earn good returns. Where should I invest this money?
    Ankur Choudhary Co-Founder and CIO, Goalwise
    replies: The first thing you need to decide is the allocation between equity and debt. Ordinarily, the allocation at the age of 44 should be moderate to low risk. Assuming you have most of your investments in debt and/or real estate and this Rs 3 lakh is to be invested for just growth, you can invest in good large- and multi-cap funds, given your time horizon.

    Some funds that you can consider are: Axis Bluechip, Canara Robeco Bluechip Equity, Mirae Asset India Equity and Kotak India EQ Contra Fund. However, if this Rs 3 lakh is your primary savings, then I would recommend investing at least 40% in short-term debt funds like Kotak Savings and IDFC Low Duration and the rest 60% in the equity funds mentioned above. This way, you will not suffer beyond your risk tolerance in the event of a market crash.

    I have not made any contribution to my EPF account since April 2016. I have just turned 58. Can I now withdraw my EPF corpus of about Rs 40 lakh? Will it be taxed? Where should I invest this sum for regular monthly income?
    Prableen Bajpai Founder, Managing Partner, FinFix Research & Analytics
    replies: After 58, one can withdraw the full EPF amount. You will need to file the Composite Claim Form (Form-19). It can be accessed offline as well as online through the UAN portal. The full amount withdrawn at the time of retirement is tax exempt, if the account holder has been in continuous service for at least five years.

    Your risk appetite, other sources of income, and tax liability are crucial to determining investment avenues. Broadly, an interest of 7.5% can earn you a pre-tax monthly income of Rs 25,000 on this corpus. You aren’t eligible for Senior Citizens’ Savings Scheme and Pradhan Mantri Vaya Vandana Yojna until you turn 60.

    So, you may invest in a mix of Post Office Monthly Income Scheme, bank fixed deposits (FD) and corporate fixed deposits. If you are comfortable with annual interest payouts, then tax-free bonds can be a decent option. Corporate FDs offer higher returns than regular FDs, however, choose these only from credible issuers. Overall, factor in your liquidity needs, product risk, lock-in, and taxation to creating your portfolio.
    (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
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