Need Help to start Investing small amount monthly

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Deal Cadet
dealpanda

Hello everyone

Do you invest small amounts monthly in sip or anything else like ppf. If yes what will you recommend. I want to start investing small amount like 2-3k monthly. Where should I invest for long term benefits. Not considering FD coz the return is low.

And please guide any easy app or website to do such things.


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Deal Subedar Deal Subedar
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buddy first thing first

i dont know if you have term insurance or not. Are you just young chap without any liabilities?

1. While young, buy good term insurance policy and health insurance that covers upto 65 years. Use 2/3 your fund for it.

2  divide rest into two halves. First half invest in nifty 50 fund  SIP.

3  second half keep it in bank for a year, whatever little savings interest you get. Open ppf account and put the savings in it between april 1st to april 5th in this ppf.

future surplus can be invested in markets as you have funds in ppf for withdrwal in case if emergency after 5yrs.

actually emergency funds should be in fd. But you dont want fd so next best option is ppf.

Deal Cadet Deal Cadet
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playdime wrote:

buddy first thing first

i dont know if you have term insurance or not. Are you just young chap without any liabilities?

1. While young, buy good term insurance policy and health insurance that covers upto 65 years. Use 2/3 your fund for it.

2  divide rest into two halves. First half invest in nifty 50 fund  SIP.

3  second half keep it in bank for a year, whatever little savings interest you get. Open ppf account and put the savings in it between april 1st to april 5th in this ppf.

future surplus can be invested in markets as you have funds in ppf for withdrwal in case if emergency.

actually emergency funds should be in fd. But you dont fd so next best option is ppf.

Thanks for the advice but I can’t have term insurance as I haven’t started filing ITR yet. I do have an insurance plan from LIC for safety sake and also opened Sukanya for my girl child. 

About PPF, Can I close PPF whenever I want or is it time bound?

Also how to invest in Nifty 50 Fund SIP?

Sorry for asking too much questions but I am pretty noob in these financial matters.

Deal Subedar Deal Subedar
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dealpanda wrote:

Thanks for the advice but I can’t have term insurance as I haven’t started filing ITR yet. I do have an insurance plan from LIC for safety sake and also opened Sukanya for my girl child. 

About PPF, Can I close PPF whenever I want or is it time bound?

Also how to invest in Nifty 50 Fund SIP?

Sorry for asking too much questions but I am pretty noob in these financial matters.

Ppf account can be closed only after 15yrs. However partial withdrawal allowed after 7yrs (subject to correction on number of years). 

loan against ppf possible. Min 500 rs per year need to be contributed.

coming to SIP i use icici direct as i have stocks as well.

There may be apps for it. Wait if others dimers suggest any other app as i dont go out of icicidirect  which is little costly, but have amazing service.

Deal Cadet Deal Cadet
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You can use kuvera, grow, Paytm money or zerodha coin for mutual fund SIP. Buy only direct plan not regular one

Deal Cadet Deal Cadet
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playdime wrote:

Ppf account can be closed only after 15yrs. However partial withdrawal allowed after 7yrs (subject to correction on number of years). 

loan against ppf possible. Min 500 rs per year need to be contributed.

coming to SIP i use icici direct as i have stocks as well.

There may be apps for it. Wait if others dimers suggest any other app as i dont go out of icicidirect  which is little costly, but have amazing service.

Wouldn’t invest in PPF then, will look into SIP

Thanks. KG



Deal Cadet Deal Cadet
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For 2-3k mutual funds is good option. Do a bit of research on your own before investing. Another option is Recurring deposits(RD), post office has a lockin of about 5 years for RD with banks it is much more flexible. But interest rates are low as of now. Given the inflation if RBI does change repo again we can expect a slight increase in interests. So if you consider any of these deposits do it for short terms.

Deal Cadet Deal Cadet
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10ven wrote:

For 2-3k mutual funds is good option. Do a bit of research on your own before investing. Another option is Recurring deposits(RD), post office has a lockin of about 5 years for RD with banks it is much more flexible. But interest rates are low as of now. Given the inflation if RBI does change repo again we can expect a slight increase in interests. So if you consider any of these deposits do it for short terms.

Thanks for suggestions.

But I think interest rate will be low on RD compared to Mutual Funds.

Deal Cadet Deal Cadet
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dealpanda wrote:

Thanks for suggestions.

But I think interest rate will be low on RD compared to Mutual Funds.

Yes. 6-7 years ago I used to do RD for one year. Take the lumpsup and buy at dips but not anymore sweat_smile

Deal Cadet Deal Cadet
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dealpanda wrote:

Thanks for suggestions.

But I think interest rate will be low on RD compared to Mutual Funds.

Yeah obviously all savings instruments like RD and FD will have low interest rate, even if it get increased in few month, it will be below inflation rate, so in all you will loose money only in long term. RD and FD is good only if you want to use your fund in next 1 to 2 years. Otherwise it is not a good option.

Simce you already have said that amount is for long term(7+ years), I would suggest you to do Direct Mutual fund (not regular). 

For Direct MF, either use AMC website or use Indmoney, ETmoney like platform which charges zero fees for mf services.

Your amount is not more than 3k, hence don’t choose more than 3 MF.

Choose one flexi cap(Parag Parikh flexi cap, PGIM flexi cap)(₹1500)+ one multi cap(Quant active fund)(₹1500). 

Or 

one large plus mid cap fund(250 stocks) Axis growth opportunities fund(₹2000) + one small or mid cap fund(₹1000) either PGIM mid cap opportunity fund or Axis small cap/kotak/nippon(₹1000).(one mutual fund per amc )

Review performance of Fund every 3 year or 2 years.

Deal Cadet Deal Cadet
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bhopali91355 wrote:

Yeah obviously all savings instruments like RD and FD will have low interest rate, even if it get increased in few month, it will be below inflation rate, so in all you will loose money only in long term. RD and FD is good only if you want to use your fund in next 1 to 2 years. Otherwise it is not a good option.

Simce you already have said that amount is for long term(7+ years), I would suggest you to do Direct Mutual fund (not regular). 

For Direct MF, either use AMC website or use Indmoney, ETmoney like platform which charges zero fees for mf services.

Your amount is not more than 3k, hence don’t choose more than 3 MF.

Choose one flexi cap(Parag Parikh flexi cap, PGIM flexi cap)(₹1500)+ one multi cap(Quant active fund)(₹1500). 

Or 

one large plus mid cap fund(250 stocks) Axis growth opportunities fund(₹2000) + one small or mid cap fund(₹1000) either PGIM mid cap opportunity fund or Axis small cap/kotak/nippon(₹1000).(one mutual fund per amc )

Review performance of Fund every 3 year or 2 years.

Thanks a lot for this detailed advice.. will surely look into it.

KG

Deal Subedar Deal Subedar
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Invest in direct index fund and forget .Buy directly from Amc fund house 


Critic Critic
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dealpanda wrote:

Wouldn’t invest in PPF then, will look into SIP

Thanks. KG



You need to divide the saving goals into short term and long term. 

The main benefit of PPF comes when a person is at the highest tax bracket. The interest on PPF is 100% tax free. But the earlier you open a PPF, the earlier the 15 year period gets over. I assume that you are in early 20’s. If you open now, you PPF initial maturity will come when you are in mid-30’s. That makes a big difference. And the best part of PPF is that there is no major annual commitment, its flexible from contribution point. So, open a PPF with 500/mth. And keep it running.

For the remaining, you can opt for mutual funds.

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