What are the tax efficient investments

To get 10% CAGR with tax benefit/ tax efficient returns, you have hardly any choice other than mutual funds. Within mutual funds, there are various type of funds - like, debt funds, balanced funds and equity funds. Again, within equity funds, there are many categories of funds, like - large cap funds, diversified equity funds, mid and small cap funds, ELSS funds etc.

Although mutual funds offer a wide array of funds to choose from, one should select funds only based on ones risk profile and investment horizon.

For example - if you are a moderate risk taker, you can invest in balanced funds provided you have an investment horizon of 3-5 years. but if your investment horizon is only 6-12 months then you should invest in liquid funds or short term bond funds even though your risk profile is moderate.

Therefore, even though your investment horizon is 9 years, we can suggest you tax efficient investment options amongst various category of mutual funds, only if we know your risk appetite.

Do let us know your risk profile in order to help you with a detailed reply.

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