How Chintamani Chose Between Nifty ETF, Liquid Funds & FD Renewal

What Chintamani Did With His FD Maturity Money: A Real Investor’s Story

When Chintamani’s fixed deposit (FD) matured last month, he faced a dilemma.

Should he:

• Renew the FD again for another year at 6.5–7%?
• Park the money in a savings account until he finds a good equity entry point?
• Invest it in a Nifty ETF for higher returns?
• Try liquid or overnight funds to earn something extra safely?

Being someone who likes to research deeply before any financial decision, Chintamani spent an entire Sunday morning comparing options, risks, and taxes.

⭐ Chintamani’s Findings

1. Savings Account

Return: ~3% p.a.
Risk: None
Tax: Interest taxed at his 30% income slab rate

💭 “Why keep money at 3% when inflation is eating away my real returns?” thought Chintamani.

2. Renewing FD

Return: ~6.5–7% p.a.
Liquidity: Locked for chosen tenure; penalty if broken early
Tax: Interest taxed at 30% slab rate

💭 “Good if I don’t need the money soon, but I want flexibility in the coming months.”

3. Liquid Mutual Funds

Return: ~6–7% p.a.
Risk: Very low (invests in treasury bills, short-term bonds)
Liquidity: Redeem in T+1 day
Tax: Gains taxed at income slab rate (post-April 2023 rules)

✔ Top Picks Chintamani Noted:

• ICICI Prudential Liquid Fund – Direct – Growth (~7.1% 1Y)
• Nippon India Liquid Fund – Direct – Growth (~7.0% 1Y)

💭 “Better than savings, almost no risk, and I can withdraw in a day if needed.”

4. Overnight Funds

Return: ~5.5–6% p.a.
Risk: Negligible
Liquidity: Same day (T+0)
Tax: Taxed at slab rate

✔ Top Picks Chintamani Found:

• SBI Overnight Fund – Direct – Growth (~6.0% 1Y)
• HDFC Overnight Fund – Direct – Growth (~6.0% 1Y)

💭 “Perfect for funds needed anytime in days.”

5. Ultra Short-Term Debt Funds

Return: ~7–7.5% p.a.
Risk: Slightly higher than liquid funds
Liquidity: T+1 day
Tax: Taxed at slab rate

✔ Top Funds Chintamani Shortlisted:

• IDFC Ultra Short Term Fund – Direct – Growth (~7.3% 1Y)
• ICICI Pru Ultra Short Term Fund – Direct – Growth (~7.2% 1Y)

💭 “Better returns if I can leave funds untouched for 3–12 months.”

6. Nifty ETF

Return: Market-linked (~12% average long-term)
Risk: High in short term; market can correct anytime
Liquidity: Can sell anytime during market hours
Tax:
<1 year holding: 15% STCG
>1 year holding: 10% LTCG (above ₹1 lakh gain)

✔ Top ETFs Chintamani Researched:

• Nippon India Nifty BeES ETF (expense ~0.05%)
• HDFC Nifty 50 ETF (expense ~0.03%)

💭 “Great for long-term wealth growth but risky if I need funds in a market dip.”

✅ Chintamani’s Final Decision

After his analysis, Chintamani decided to:

1. Park half his funds in Liquid Funds to earn ~7% p.a. safely with easy liquidity.
2. Deploy the other half gradually into Nifty ETF over the next 3–6 months as the market offers good entry points.

🔥 Chintamani’s Takeaway for You

“Don’t let your FD maturity money sit idle in a savings account earning just 3% p.a..

If you need funds soon, go for Liquid or Overnight Funds.

If your horizon is long-term (3+ years), consider Nifty ETF for equity growth.”

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