I have a two-year-old daughter and want to start saving for her marriage right away, primarily in gold. What are my options? Which is the most effective?
Apart from buying physical gold from jewellers, you can look at these alternatives:
a) Invest through e-gold. Just like shares, this can bought through the National Spot Exchange Limited. Each unit of e-gold is equivalent to one gram of gold.
b) You can buy gold exchange-traded funds (ETFs). These can be bought through the National Stock Exchange, the Bombay Stock Exchange or mutual fund houses.
The prerequisites for both the above options are having a trading account with a registered broker (for e-gold) and a demat account (for ETFs).
c) If you do not wish to open a trading/demat account, you may also look at specialised mutual funds, whose net asset value (NAV) is linked to gold like gold saving funds.
Please help with a) I want to invest in two SIPs (Rs 1,000 each) for over 10 years b) I want to invest Rs 50,000 for two-three years and another Rs 50,000 for over 10 years. These could be in mutual funds or stocks. While investing through SIPs, should I opt for tax-saving schemes?
If you don’t have first-hand experience of investing in the stock market, it is strongly advised you take the mutual fund route. An SIP of Rs 2,000 a month is a good beginning. Try increasing the amount by a fixed percentage every year. The equity-linked saving scheme (ELSS) or tax-saving funds are ideal for you if you fall under the taxable bracket and are seeking to utilise your Section 80C exemption.
The first Rs 50,000, which would remain invested only for two-three years, should remain as safe as possible. So, you may consider a conservative monthly income plan. The remaining Rs 50,000 may be invested in a couple of diversified equity funds with good trackrecord. Select the growth option in both cases.
We are considering buying a plot and building a house at my native place. Do I need two separate loans or can I make do with one? What are the tax benefits in either case?
Usually, financial institutions treat loans for buying a plot and for building a house separately. In fact, the one for buying a plot is usually costlier than a normal mortgage. Also, while you may get tax exemptions on loans to construct or buy a house, there is no such exemption for those buying a plot.
The exemptions available on housing property depend on whether it is self-occupied or let-out. Interest on loan for a self-occupied property is exempted up to Rs 1.50 lakh a year. Also, you will get benefit under Section 80C on the principle repayment.
The writer is a certified financial planner. The views expressed are his own. You can send your queries to firstname.lastname@example.org.