Mr. Rakesh, 30 Years old works with MNC has just received Rs 1,00,000 as Diwali bonus. Rakesh don’t want to waste this money he wants to invest this entire amount in to some value adding investment but he is confused about where to invest this money. So if you are confused like Mr.Rakesh we are here to help you to guide with best possible way to invest this bonus amount.
Best Way to spend Diwali Bonus:-
First thing you can do with this amount is you can reduce your liability, so if you have loans like home loan, personal loan or loan against security than I advise you to simply pay this loan first.
Check if your life insurance & medical insurance need is fulfilled or not, if not you can use part of bonus amount for this and rest you can keep as Emergency Fund.
If you don’t have any liability than you can use following chart to decide your investment avenue according to time horizon, tax bracket and risk appetite.
Remember your investment decision should also take into account your overall financial portfolio. If you have low risk appetite you can invest in fix deposit bur remember interest from this fix deposit is considered as your income and bank may deduct TDS. If your income does not exceed the tax exemption limit, you can get back deducted amount by clamming refund but it is better to submit a declaration under Form 15G. Senior citizens should submit Form 15H to Bank to avoid TDS deduction.
If you are investing for the long term, go for equity only if your allocation allows you to take that kind of exposure to the volatile & risky asset class.
It is always advisable no to invest lump sum amount directly in equity so you can plan to invest this money systematically.
You can also think of investing this money in Gold or Silver in systematic manner.
Please share how you are going to spend your Diwali Bonus?