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Need Advice for a ₹50,00,000 Investment
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Hey guys, I need your advice for investing 50 lakh rupees of my parents. I am thinking of doing FDs of 5 lakh each in 5 small finance banks for my parents. Is it safe to do FDs in small finance banks? I have chosen these banks for FDs as they have a better ROI.
Unity Small Finance Bank
Suryoday Small Finance Bank
Fincare Small Finance Bank
Equitas Small Finance Bank
Jana Small Finance Bank
Utkarsha Small Finance Bank
AU Small Finance Bank
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https://www.desidime.com/comments/permalink/9934259
Fincare and Au gonna be one from 1st april.
Reduce amount to 4lakh at each bank will be my suggestion.
Investing in property fetching rental income will be my another suggestion.
https://www.desidime.com/comments/permalink/9934328
First of all what do THEY want to invest in? As this is their money we are talking about?
It all depends on
1. how old are they?
2. What are their obligations in the coming years, especially short term.
Do they have any children young, studying, unmarried? Rent to pay?
3. Health issues that require medical care cost every month?
4. Do they have any other sources of income? A salary? Pension? Interest/rent income? If so how much?
5. Do they have a place they own to stay or do they rent? If they don't live with you.
Financial planning for others, especially elderly parents should be done with twice the care.
This is like not like someone looking for an fd or mutual fund recommendation.
It all depends on
1. how old are they?
2. What are their obligations in the coming years, especially short term.
Do they have any children young, studying, unmarried? Rent to pay?
3. Health issues that require medical care cost every month?
4. Do they have any other sources of income? A salary? Pension? Interest/rent income? If so how much?
5. Do they have a place they own to stay or do they rent? If they don't live with you.
Financial planning for others, especially elderly parents should be done with twice the care.
This is like not like someone looking for an fd or mutual fund recommendation.
https://www.desidime.com/comments/permalink/9934386
‣ Will the account/s be in the name of senior citizens?
‣ Can the funds be shown in the books of the lady or are of the lady and investments, purchases made in her name?
‣ CDs/ Term Deposits are some of THE MOST unproductive investments.
‣ For example, if one holds their funds in the form of currency coins, then the coins themselves would be worth much more in the future than whatever return the fixed income products give.
‣ Having said that, as 'desiman' and others mentioned, FinMin and/or the central bank issued fixed income products like gold bonds and usual gilt-edged securities (gilts/ gilt bonds) might still be more viable option.
‣ Personally, I would have more peace of mind putting large quantum in conventional banks, instead of these small finance banks or cooperative banks.
Not that conventional banks are not susceptible to regulatory oversight, mismanagement or wilful negligence, but still, somehow my faith in cooperatives and newage banks is not the same.
‣ Unless both are touching seventies pr already in the seventies or beyond and are totally risk averse,
I feel (personal opinion only), deploying everything in fixed income products is akin to throwing good money after bad!
‣ Aside of funds for contingency, medical or other emergencies unless one is heavily dependent on the returns from such fixed income products one can easily deploy at-least 45-50% of the (5 million) corpus in other assets too, even in their twilight years.
Again, these are just viewpoints and not necessarily prompts that others need to act on.
‣ Aside of market linked financial products/investments, real estate, bullion.. people also do invest in antiquities (including numismatic), art works, alcohol (aged alcohol prices usually only appreciate).
Dark as it may seem, (we) have known of those who invested in some good art and then hoped/waited for the artists to die! (If the right buzz exists and the market picks it up, the death of an artist almost instantaneously increases the value of the artwork.)
Also seen cellars full of the finest wines, whiskies and other alcohol which were only meant to be sold off at a profit, every 10-15 years or so. Obviously ALL OF THOSE cellars we got to see were fully insured too, just so.
https://www.desidime.com/comments/permalink/9935281
how funny that mods deleted my earlier comment about getting above comment removed
https://www.desidime.com/comments/permalink/9934601
Consult with wealth advisors/management (not bank WM).
Now, an obvious question would be: What's different about managing wealth with them? I had similar questions. A short and clear answer: Just some confidence and a systematic investment plan.
I made good money investing in equity/MFs on my own, but I was never confident enough to park 4-5L in MFs SIP every month. This is something I think is different. The only differentiating factor was accepting the fact that they know investing better than me, and instead of focusing on investing on my own, I focus on making more money.
Plus, they introduce you to some other less popular investment options in the markets, such as fractional property and franchise, which again need a lot of research if done individually. At least, we can rely on WM partners.
Lastly, clearing a misconception: I always assumed that it would cost a lot if going with WM in the first place, but later on realized they don't really want anything significant from me. All they want is to take regular MFs with them. That's how they make money.
I am just sharing my experience, I totally agree there would be better alternatives' always.
https://www.desidime.com/comments/permalink/9934638
Almost all brokerages worth their name and good banks have PCGs (private client group).
YOU made acceptable or even phenomenal returns in it; accepted.
But not everyone has similar 'risk appetite'.
And although we have had experience with extremely professional and ethically managed PCGs of (the then) ANZ Grindlays bank and of Deutsche Bank, not all companies have as much transparency and as many good governance practices.
Deutsche was/is especially strict in not having conflict of interest and ensured arm's length transactions.
YOU made acceptable or even phenomenal returns in it; accepted.
But not everyone has similar 'risk appetite'.
And although we have had experience with extremely professional and ethically managed PCGs of (the then) ANZ Grindlays bank and of Deutsche Bank, not all companies have as much transparency and as many good governance practices.
Deutsche was/is especially strict in not having conflict of interest and ensured arm's length transactions.
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https://www.desidime.com/comments/permalink/9934730
Invest in crypto for 6-8 months
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https://www.desidime.com/comments/permalink/9935344
hi
if it helps
keep diff tenors of all the fda
you might miss out on the interest rate but it will help in liquidity and taxation
also ypu wont get penalised for breaking the fd
https://www.desidime.com/comments/permalink/9935723
Keep 80% amount in FDs as safe investment and rest 20% in equity, mutual funds combination. High dividend paying stocks can give you dividend on regular basis and their value will also appreciate over time considering you don't invest entire amount in single stock to minimize risk.
https://www.desidime.com/comments/permalink/9936319
Inflation 7 % + taxes will kill your fd
https://www.desidime.com/comments/permalink/9936568
Investment instrument to be selected based on your Parents risk appetite. Not Your Risk Appetite. Please note that.
Small Finance Banks are also safe, upto 5 Lakhs. Senior Citizen Savings Scheme is also fine. Moving further to Hybrid Funds etc. requires to assess their goals and risk appetite. Generally a small percentage into inflation beating instrument is good idea. But Personal Finance is 'Personal', can't generalise beyond a limit
https://www.desidime.com/comments/permalink/9979490
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Fincare and Au gonna be one from 1st april.
Reduce amount to 4lakh at each bank will be my suggestion.
Investing in property fetching rental income will be my another suggestion.
Fincare and Au gonna be one from 1st april.
Reduce amount to 4lakh at each bank will be my suggestion.
Investing in property fetching rental income will be my another suggestion.
On that 4 lakh point , i agree.
The 5 lakh insurance is the total on principal and interest component and most people miss this part. So best to keep around 4-4.5l if you think the bank is risky.
Invest in SCSS, it fetches 8.2% paid quarterly. Limit is 30 lakh(credit @Watcher) per senior citizen. Sovereign guarantee
Limit is now 30L for SCSS.