Help Needed regarding distributing surplus money to MFs Please!

#1
Hello Friends!

What would you do if you have 1lac surplus amount lying idle in your savings bank account to be pumped into MFs systematically?

I want to put all of these into MFs.. However, as experts say in this forum, investing at once such a huge sum is a big mistake. Doing SIP of even 5K per month will take 1.5 years. I am eager that my capital gets booked into the MFs asap. That will mandatory install discipline where as money lying in savings account has the tendency to leak out periodically as unwanted expenses.

Parking in Debt funds and switching or STP i think that is the right word might not be a good idea as it attracts exit load and taxes.

After quite brainstorming, I have come up with an Idea. How many of you would support it please?

Do 5K in each of the 4 Funds monthly so that is 20K per month.

So let me say I would need 20K immediately for the first Investment. That leaves me a balance of 80K.

Take FDs in 20K slots (4 FDs) immediately.

Break [Pre-mature withdrawal] 1FD each month to put it into MFs as planned above (No pre-withdrawal penalty, checked with HDFC)

So at the end of the 5th month, all FDS will be transferred to MFs.

Please advise if there are better options around. One thing is clear, according to my late planning, this 1 lac has to go to MFs only please..

Regards

Jeet
 
#2
Parking in Debt funds and switching or STP i think that is the right word might not be a good idea as it attracts exit load and taxes.

(No pre-withdrawal penalty, checked with HDFC)
I think there are certain liquid funds that have no exit load for STP.

Having said that, i like your idea of FD [no penalty] to MF route. The only concern is that you are allocating the entire amount in 5 months' time.

Overall, a good plan under the given circumstances.

Thanks for the tip [FD]
 

nikrod

Active Member
#3
I think there are certain liquid funds that have no exit load for STP.

Having said that, i like your idea of FD [no penalty] to MF route. The only concern is that you are allocating the entire amount in 5 months' time.

Overall, a good plan under the given circumstances.

Thanks for the tip [FD]
Yes, most of the liquid funds have no exit loads. Also if you opt for dividend option, the taxation will be taken care of automatically. The FD concept can also be implemented.

I personally feel that your SIP should atleast be of 10-12 months. 5 months is short period for a SIP.
 
#4
Hi

Thank you for backing up my concept. I would better go with the FD concept I think than worry about taxation and exit loads.

I will also try to stretch it out by 10-12 months as you have pointed it out.

Thanks again.

Regards

gopal
 

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