@ Angel16,
I'm not familiar with "
accrual funds" .. could you pls elaborate.
"Mutual funds" can be a good option but remember MF's give decent recent
over a long period of time. In short term it is more risky to expect abnormal returns from MF's. Though it has no lock-in but imagine if you were to redeem it in one day & on a day/period when market situation is bad.. you'll end up booking a loss / sacrifice return
Regarding
"FD's" .. your money is Not eroded and 9% is a good rate of return (in Canada you will earn less than 2%). Also, over the last month FII's have invested heavily in Debt market as Bond yields are expected to lower in the future. So locking
9% return in a Risk free instrument like FD's makes sense.
Also, look at Settlement Funds (currently locked) from a PR point of view:
Time horizon =
1 yr (assuming, you get a PR and ready to travel with Settlement Funds).
Settlement Funds (Corpus) - say,
Rs. 10L
FD's rate of return- 9% (Guaranteed, Risk free)
Accrual Funds/ MF's-
how much more ? assume, 15% expected returns from MF - conservative est. (No Guarantee, Riskier in short run)
So, your
Opportunity cost (differential returns in FD's) =
(15%- 9%) * 10 L =
Rs 60 K
For gaining
approx Rs. 60K you'll loose your peace of mind by taking additional risk (in MF's/ accrual funds) and hassles/ expln to CIO at a later stage (if POF reqd) etc.
Compare
Rs. 60k with the benefit involved in achieving your
PR to Canada... its just peanuts !
Take your call !
Angel16 said:
Ashif, century, neel and kollins....I need expert advice. The settlement fund I hav is rite now in bank fixed deposits. My application has already reached cic.
Is it ok if I remove dat money n invest it in other instruments like accrual funds or mutual funds? Specifically funds which hav no lock in period. I can redeem it in one days time.
Pls advice...I m by profession a financial planner n can't watch my money erode in FDs.... earning only 9% taxable income while I can make much more in accrual funds.