Dreaming of a new home but facing a big down payment? Many like Priya wonder how to make their funds work harder. Let's explore smart strategies!
Are you buying in 6 months, 1 year, or 2+ years? Your 'time horizon' is the most critical factor influencing how you should invest your down payment amount.
For short horizons, avoid pure equity. It's too volatile. Prioritize capital preservation with liquid, ultra-short, or conservative debt funds. Aim to beat savings account rates.
With a slightly longer horizon, explore balanced advantage funds or aggressive hybrid funds. You can also use a Systematic Transfer Plan (STP) from a liquid fund.
Aggressive equity for a critical down payment is risky. Market crashes don't care about your schedule. Prioritize safety; protect your principal over chasing high returns.
Beware of chasing hot funds, ignoring liquidity, exit loads, or taxes. Diversify, understand fund mandates, and choose stability for this crucial fund.
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