I want to invest Rs 5-8 lakh for up to six months. What’s the best instrument?
Sonia Mehta, Delhi
Assuming, after six months you need this sum, the idea of capital protection should be primary focus for this investment. So, there is no scope to think or plan of investing this sum in equities, because equities are volatile and predicting their returns in such a short time is a risky proposition. The other alternate is to keep this sum in a term deposit for six months, but the gains would be subject to tax depending on the tax slab your income falls in. The best way to set aside money for less than a year would be to let it reside in a liquid fund, which is a kind of debt fund in which you could expect tax efficient returns, but these are not guaranteed and are not completely risk free.
