By now, all the employees know that they will take home anywhere between Rs.2000 to Rs.4000 extra from this month onwards. Some of you would have already planned to spend this money. You can go ahead and do whatever you want to do with this money. It’s your money. But I have a suggestion to offer, can you spare 2 minutes to read this article?
Part A: You can invest the money in long term mutual funds through SIP route. You can open a Demat account (if you already have one that will do). Invest 50% of the money; say Rs.2500/- every month in long term blue chip funds. Some of the good funds are –
- ICICI Prudential Top 100 fund
- Axis Equity Fund
- UTI Opportunities fund
- HDFC Top 200 fund
The balance (say Rs.1500 or Rs.2000 per month) can be invested in Debt income funds. Some of the funds are –
- Templeton India Corporate Bond Opportunities Fund
- Birla Sun Life Medium Term Plan
- ICICI Prudential Long Term Fund
How to invest? Opt for Systematic Investment Plan (SIP) route and invest every month
Part B: You can invest additional Rs.50,000 in any of the funds mentioned u/s 80C of Income Tax Act. I suggest you to invest the money in Public Provident fund (PPF)
Holding period – the tax saving has come to you as an unexpected bonus. You will continue to get this benefit throughout your career. So, I suggest you to keep investing this money for the next 10-15 years. If you invest Rs.5000 every month for the next 15 years, this amount will grow to Rs.34,00,000.
Tribute to this budget – If you make the investment decision today and invest as mentioned above, this money will come handy for your kid’s higher education, marriage or your overseas trip! Take the decision today as a tribute to the Budget 2014.