I recently got married and want to start investing. I am servicing a car loan EMI currently. I want a short lock-in with the investments. Which fund should I invest in for good returns?
Shruti Singh, Gurgaon
Congratulations on the marriage and the desire to start investing. As you are a first time investor, it will be good for you to invest regularly in mutual funds, just the way you are regularly paying the EMIs on your car loan. In fact, you should treat the regular investment through systematic investment plan (SIP) offered by all mutual funds as an EMI that will help you build wealth. SIPs allow you to invest small amounts periodically, which add up over time. You could invest in a balanced fund or an equity-linked savings scheme (ELSS). The former has an in-built mechanism to balance the allocation to equity and debt in the proportion stated by the fund in its objective, while the latter is a tax saving option. You could claim tax deduction on investments in ELSS under Section 80C of the Income Tax Act, up to Rs 1.5 lakh invested in a financial year. There is no lock-in in case of balanced funds, but there is a three year lock-in in the case of ELSS. You could select a fund from the OLM Elite list which is a list of hand-picked funds that have a proven track record and performance history.
