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Thursday, 19 March 2009

Shall I withdraw FD and invest in Debt fund?

Posted on 09:44 by Unknown

Shall I withdraw FD and invest in Debt fund?

An old Guest, Mr.Ajay Kumar from Hyderabad, wrote again :

Hi Sir! as per ur advice i started two SIP's in HDFC TOP 200 =
1000/mth and Sundaram SELECT FOCUS = 500/mth from october 2008 and
finished 3 SIP installments,also i have a FIXED DEPOSIT of 15000 with
a interest rate 9.75/year = 16462 . as u can see FD is not getting me
huge returns,i want to shift that money in GILT / INCOME / DEBT FUNDS.
The latest news i heard that GILT funds are going to give good reurns
in short term as the interest rates and inflation are slashed down.
so, plz give any advice on my 15000 rupees .thank u

SRIKANTH SHANKAR MATRUBAI replied :
Dear Ajay Kumar,
It is always a pleasure to recieve your mails. I am extremely pleased that you are following my advise and starting investing in HDFC Top 200 and Sundaram Select Focus.
Regarding your FD, yes you are right, you are not getting much returns from the same. You can consider switching the funds to HDFC Income Fund which, considering Falling Interest Rates, easily give you return in excess of 12%. Do invest in this fund with a time period of at least 1 year. Instead of any GILT fund, among Debt/Income Funds, my choice is HDFC Income Fund.
Also, while investing in Income Funds, go for Lumpsum and not via SIPs. I have gone through the portfolio of HDFC income Fund, and it looks quite attractive. Go for it.
Best of luck,
Srikanth Shankar Matrubai,

Also visit http://equityadvise.blogspot.com for an indepth Equity Analysis
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