Should I invest in equity savings fund for parking my investible surpluses

I am retired, Senior citizen, 68 years, living in Mumbai. I am a keen follower of Advisorkhoj and extremely impressed with your information given. I adore your subject knowledge and appreciate and sincerely thank you for all the help you are giving. Tell me one thing how you are doing so much of social service without anything in return. Are you running some advisory service. If yes, kindly send me details. Presently I have one question and seek your advice. I want to make my advance income tax quarterly payment planning. For this I want to make a deposit of approximate amount of advance tax to be paid in a particular quarter (15 June, 15 October, 15 Dec & 15 March) now and wish to withdraw the required amounts on the dates shown (or 3 days in advance so that money is back in a/c and on each of the 4 nos. 15th I can pay advance tax on line). For above I am thinking of making investment in Equity Savings Fund of different AMCs so that reasonable return of 9-10% can be obtained and also no capital gains tax after one year withdrawal. Do you think it is good or suggest some other fun? Also let me know the funds where I can distribute and invest for wider choice (not all eggs in one basket)? I keenly look forward to your advice and also details of your services?

Jan 6, 2018 by Rathindra Nath Mittra, Mumbai | Mutual Fund

Thanks for the kind words about Advisorkhoj. Glad to note that you find our content, research and query answers useful.

Please note that we do not run any advisory services, instead we help advisors run investment services. We do give suggestions and answer to the visitors query for free as we are passionate about taking mutual funds to the masses. Our cause is supported by many AMCs in India.

Equity savings funds are not the right category of funds for your investment needs. As you would be needing the funds every 3 months for paying advance taxes, my suggestion is that you should go with ultra-short term funds. Please check the top funds in this category from here https://www.advisorkhoj.com/mutual-funds...

Equity Savings funds are managed like equity oriented balanced funds wherein upto 65% can be invested in equities. But the only difference between the balanced funds and the equity savings fund is that the overall equity exposure may not indicate the true risk profile of the fund because a portion of the equity allocation may be hedged using derivatives. The purpose of hedging is to reduce risk. The active equity exposure or the un-hedged equity exposure indicates the true risk profile of the fund. Therefore, as there is a substantial equity investments in equity savings fund, these are not suitable for short term investment option. According to me you should have minimum 3-4 years of investment view for this category of funds.

Hope the above helps you.

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