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Tuesday, October 11, 2016

Mutual Fund SIP Vs Post Office / Bank RD : Which One is Best?

Mutual Fund SIP Vs Post Office / Bank RD : Which One is Best?

Can We Make Use of RD Investments for SIP To Get The Best Out of it??? Find out...

By Mr. B. Padmanaban, CFPCM
Certified Financial Planner

We always compare SIP(systematic investment plan) versus RD (recurring deposit) because both are systematic investment plan.

SIP is variable and RD is fixed. Our investors have the experience of RD for so many decades.

Normally RD is used for yearly commitments like school fees, insurance premium, vacation so on and so forth.

This particular money still goes to RD because it is difficult to take a call on one year SIP investments so we lost the opportunity.

Some of us take that money in a liquid fund SIP, which is better than RD.

I found some interesting strategy, and it will work all the time.

Instead of taking money from RD every year, if we advise our client to postpone for one year which means next year they have to manage with their existing funds.
Mr. B. Padmanaban, CFPCM
Chennai 

Instead of 2nd year, 3rd year onward we can give the money to client needs. There are advantages by doing this in mutual funds. There is no exit load because the money is going to withdraw the first 12 installments and no capital gain as well. By doing this year on year client can generate very well return out of it.

I have considered IDFC Premier Equity which is one of the consistent fund, and it works for other funds as well especially mid cap oriented funds. The data point I have taken is real and I have started the SIP where the market is all time high in Jan 2008 and continued till today.

I have taken Rs. 2,000 SIP per month in case of 10% RD (Maximum I can assume), it would be Rs. 25,131 only.
Whereas, I allowed the investor to take Rs. 27,000, from 25, 37, 49 month onward. This 27,000 comes to 25.39% return against 10% in RD!

After 7 years of withdrawal, the value still remain Rs. 1,34,265.

For more details..
Fortune Planners Investment Services (P) Ltd.
Old no 5, New No 9, Kuppusamy Street,
G1, Lotus Apartments,
T. Nagar, 
Chennai - 600 017
Near Vani Mahal, GN Chetty Road & Benz Park Hotel
Mobile: 
+91 98843 49173 

Mutual Fund SIP Vs Post Office / Bank RD : Which One is Best? Reviewed by S. Chitra on October 11, 2016 Rating: 5 Mutual Fund SIP Vs Post Office / Bank RD : Which One is Best? Can We Make Use of RD Investments for SIP To Get The Best Out of it??? Fi...

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