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What are the best investment plans to get better than FD returns

I am 49 years old. I have a corpus of Rs 90 lakhs. My bank has assured interest rate of about 9.5% in FD, for a 5 year period. Can I invest somewhere to earn higher returns? I understand risk versus return, and want a high degree of assurance with regards to my principal investment. Please suggest suitable asset allocation and schemes.

Jan 5, 2014 by Ram Rajan, Mumbai  |   Asset Allocation

Since you want a high degree of assurance with respect to your principal, you can put 50% of your money in a fixed deposit. The rest should be invested in equity or a balanced fund. However, we advise you not to invest the entire amount directly in a balanced fund. No one can time the markets, therefore, put the money first in a liquid fund and then transfer systematically at weekly/monthly intervals into your chosen equity/ balanced fund scheme over a period of six to twelve months. Systematic transfer plan will ensure that your investments do not catch any high or low phase of the market while the liquid fund will also earn some return between 5 to 7%. Balanced funds provide capital growth via a mix of equity and debt. The equity allocation is usually higher, about 60 – 70%, and gives these funds the potential of high capital appreciation, while the debt allocation acts as a hedging mechanism, if for any reason equity markets under perform. You can invest in two well rated balanced funds. Your overall portfolio allocation will be about 70% weighted to debt, since 50% of your funds will anyway be deployed to fixed deposits, thereby providing a high degree of assurance, as far as your principal investment is concerned.

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