6. Balanced Funds
Monthly savings required: Rs.24,127
Returns: 10 Percent
Advantage: As per the current tax law, maturity corpus is not taxed. Higher debt allocation or diversified portfolio makes these funds stable.
Disadvantage: Returns are market linked and could be lower than estimated. Performance of funds could fade over the long term.
Keep in Mind: There could be some modification brought under the tax law after which corpus could be taxed on withdrawal.
More: 15 Banking Terms You Should Know
7. Equity Funds
Monthly savings required: Rs.20,017
Returns: 12 Percent
Advantage: Even small investors can put their money in equity funds. Maturity corpus is tax free under the current tax laws.
Disadvantage: Returns are market linked and versatile in nature, which means it can also get lower than estimated rate. Remember, past performance of equity funds does not guarantee its future performance.
Keep in Mind: You must choose the equity fund wisely i.e. after some market research. This will help you to make low-risk or risk free investment. However, it is possible for any one fund to consistently outperform the market.
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