Author: Sanjeev Govila

We all know that interest rates right now are at all-time highs and it is just a matter of time before they start moving downwards. Knowing this, what generally is then our response for that part of our money which we want to keep safe for the long term?

We go and invest in long-term bank FDs in our favourite bank for 3-5 years. You too might have done that or may be planning to do that shortly. Is this really the best solution to take advantage of high interest rates in the long term?

Do you know, and hold your breath for it, you may be consigning your money to assured low returns for a long time which would be ‘net-NEGATIVE’ to you for the complete period of those 3-5 years?

This could surprise you but let us see how it so happens if you were to invest Rs 10 Lakhs in State Bank of India’s fixed deposit for a period of 3-5 years even at the current high rate of interest of 6.25% when the rate of inflation is at least 5.5%:-

Why Will It Happen Like That When it seems that Current High FD Rates Are Good for You?    

Rates are high but inflation too is high and is continuously eating into your returns without you even knowing it. How so?

As you know, inflation is the rate at which the cost of things that you buy increases year after year. Eg, if you earn 5.5% after-tax returns from your bank FD and the inflation is also 5.5%, then your money has just stood still for one year, earning nothing, adding nothing at all to your money value or its purchasing power. Only if you earn anything more than 5.5% after-tax in the year will your money’s purchasing power increase and you would feel that keeping that money in the bank FD was worth it.

If tax is causing all this loss to you, then why not invest in your spouse’s name who is not in a taxable bracket?

There is a income tax provision called the ‘Clubbing of Income’ (Income Tax Section 64) wherein you can give money to your wife (technically it is called ‘gifting’ to your spouse) but anything that this money earns forever is to be taxed in your own hands. Every year we see so many officers, who are not aware of this provision, invest a big amount, even a large part of their retirement corpus, in their wife’s name and then get Income Tax notices, finally ending up paying the tax anyway but with big penalties. Many years back this issue used to get brushed under the tax radar, but now, with close monitoring by the Income Tax Dept and sophisticated automation, infringements of Section 64 get detected very easily. And the tax notices follow…

Is there a way out where you take advantage of current high rates but also pay a minimal tax?

Absolutely yes, by investing in chosen safe debt mutual funds right now. And that is the big opportunity we bring to you now.

Let’s first compare the advantages of investing in debt mutual funds against fixed deposits for you.
Suppose you invest Rs 10 Lakhs each in SBI Fixed Deposits and good debt mutual funds for a period of 5 years.

As you can see above, investing in debt mutual funds reduced your tax liability by about 80%-!!
And thus provides an additional return of Rs 97,869 to you in your hands.

This exactly is the Opportunity that we wish to bring to your notice! 

To take advantage of this opportunity available right now, we are launching an appropriately named ‘Debt Opportunity Portfolio’ (DOP) for you which aims to buy very safe Debt Mutual Funds now, akin to bank FDs, when their prices are currently very low – so you get high-interest rates at low prices. This is a limited-time offer and will close soon.

Shift your bank FDs to this opportunistic portfolio and see yourself gaining interest and saving hugely on taxes continuously over the next 4-5 years.

For our existing investors, it will be a separate portfolio called the ‘DOP’ and will not be merged with the existing portfolio. This will facilitate closing the portfolio at an opportune time when we find that the best interest has been extracted from the portfolio. Typically, we feel right now that DOP will run for the next 4-5 years from now.

So how do you go ahead?
Please feel free to reach out to your financial planner in the company if you are an existing investor, or contact us at office@humfauji.in or give us a call at 9999 838 923 if you are yet not invested through us.

Please note that the minimum investment in this opportunity will be Rs 5 Lakhs and further in multiples of Rs 1 Lakh. Also, no shifting from current portfolio of existing investors can be done for taking advantage of this DOP opportunity.