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    Can I invest Rs 50,000 in corporate bond funds for a year?


    If you have any mutual fund queries, message on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.

    With the falling economy of India, are gilt funds a good choice of investment? Or gold or bank FD? I have a low risk appetite? My investment period is 1 to 2 years. Also, can I invest Rs 50,000 in corporate bond funds for a year? If yes, suggest some good schemes. Is this a good time to invest in them or should I wait?
    -Hitesh Bhateja

    You should always choose mutual funds or investment options based on your goals, investment horizon, and risk profile. It is not a great strategy to base your investment decisions on prevailing market or economic conditions. If you are an extremely conservative investors looking to invest for a few months or a year, you should always opt for bank deposits and short term debt mutual funds. When you are investing for a short period, your priority should be to safeguard the capital, not returns. This is because if you lose money due to bad market conditions, it can adversely impact your financial goals. Since you have a short horizon, you do not have time in hand to recoup losses and wait for the market to turn around.

    If you are investing a small amount, you can opt for a bank deposit. It will offer you peace of mind and modest returns. Sure, debt mutual funds have the potential to offer superior post-tax returns. However, the difference will not be much when you are investing a small sum for a short period. If you are investing for two years, you should stick to short duration funds.

    Things You should consider
    • Annualized Return
      for 3 year: 1.98%
    • Suggested Investment
      Horizon: >3 years
    • Time taken to double
      money: 9.5 Years
    Best short duration funds to invest in 2020

    It is not a great idea to invest in corporate bond funds with a one-year horizon. We recommend corporate bond funds only if the investor has a horizon of at least three years.

    Best corporate bond funds to invest in 2020

    If you do not understand much about investing in mutual funds, do not try take care of your investments all by yourself. Seek the help of a mutual fund advisor near you. Ask your friends and colleagues for references. It is extremely to take your investments when you do not know much about investing or financial products. You could lose money and you might get disappointed with mutual funds. Many investors stop investing in mutual funds and return to bank deposit after they lose money in mutual funds.
    (If you have any mutual fund queries, message us on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.)
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    3 Comments on this Story

    Rakesh Pandey24 days ago
    instead of Gilt fund he should go with short term or banking and psu fund.
    Snehadharshini Snehadharshini25 days ago
    I think investing in government bond is better to get maximum wealth
    Satish Tiwari26 days ago
    He asked very simple question and answer of his question is INVEST IN GILT FUND FOR HORIZON OF TWO YEARS TO GET MAXIMUM WEALTH.
    The Economic Times