I will start my work this month. I want to save for my higher education abroad. I will go for higher studies after three or four years. How should I invest my income?

-Sumit Singh

Subir Jha, founder of Buckspeak, a Hyderabad-based financial planning firm, replied:

If you are not in the higher tax-paying slab (taxation is less than 10% of your income), you should stick to recurring FDs. Do it for one year and then you can renew it for two-three years (assuming there is a good increase in rates or renew for only one year). We expect interest rates to rise from here (though no guarantees).

However, if your tax liability is going to exceed 10% of your income, you can invest 50% (in the above strategy) and 50% in FD debt fund: Kotak Corporate Bond Fund and IDFC Banking and PSU Fund.

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