Returns better than FD for next 6 to 12 months

POSTED BY Dominic Prakash ON December 16, 2010 3:42 pm COMMENTS (9)

Hello Guys,

I am looking for avenues where I can park 5 lakh for the next 6 to 12 months. 35% is already in HDFC HI ST fund. Any suggestion on FMPs or other funds.

I said “returns better than FD” hence I can take some risk.

Appreciate your suggestions.



9 replies on this article “Returns better than FD for next 6 to 12 months”

  1. mkshahi says:

    If i were in your place , I would have taken some risk and invested part of my fund in a few good stocks :)-

    1. Dominic Prakash says:

      Definitely you would not as the funds here are intended for one other important purpose.

  2. rakesh says:

    You could also look to invest in MIPs. Both HDFC and Reliance MIPs are very consistent performers. You can get 10 – 12% returns.
    I have been investing in these 2 funds over 15 months and have earned 12% returns till date.


    1. Dominic Prakash says:

      @Rakesh, HDFC MIPLT and Reliance MIP and top rated funds and no doubt about it. But here in this situation I can take the risk in the gain/return part and not on the capital part.
      Because of the equity exposure in MIP my capital might suffer.

  3. Ramesh says:

    Why these funds and not FMP?

    These funds will provide you liquidity, flexibility (beyond the 30days-6 months, there will be no exit load), and more likely to provide you better returns than FD, at quite reasonable expenses.

    FMP gives you illiquidity, no-flexibility and have more charges (remember, they have to advertise and provide the distributors a significant incentive).

    Regarding the taxation, less than 1 year, you will get tax according to your IT slab (which most likely should be in the 30% bracket. ;)). For this timeframe, FMPs do not provide you any special benefits.

    Moreover, it is better to sacrifice a “probable” 1% for better liquidity and flexibility. For amounts over 1 crore, it is ok to look for short term FMP and other similar vehicles. 🙂


    1. Dominic Prakash says:

      Thanks a lot for your suggestion. I need to study some more material about Tax part of Liquid, Short Term.

      1. Ramesh says:

        That part has been covered in some of the recent questions. 🙂

  4. Dominic Prakash says:

    The Templeton India STI is classified as “Debt; Short Term” and BSL FRLT is “Debt: Ultra ST”. Will there be any change in calculating capital gain tax. Is this the reason you are suggesting to go with Dividend payout/reinvest option.

    I was looking into few ST FMPs from DSPBR recently. Just wondering why no one here is suggesting any Short Term FMPs or who is (at what situation) investing in FMPs?

    Kindly clarify when you have time.


  5. Ramesh says:

    My suggestions:

    1. Templeton Short Term Income. (0.5% exit load within 6 months).
    2. BSL Floating Rate LT. (0.25% exit load within 30 days).

    Take your pick.

    Since it is a less than 1 year, go for dividend payout / reinvest options


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