Invest in Credit Risk Mutual Fund or not?

We are right at the beginning of a brand new financial year and this is the best time to get a few things done so that your personal finances are in top shape. Here are our top 5 money ideas for the FY 2021-22, which if you take the trouble to implement now, you will surely be thanking me later!

Investing in Public Provident Fund (PPF). It is one of the most favoured investments and people often invest up to Rs 1.5 lakh to claim deduction under Section 80C. But most of the time it is done at the last moment. It is always advisable to invest in PPF at the beginning of the year itself, so that you can receive the interest returns for the entire financial year.

Make sure that you have all your documents related to the filing of Income Tax returns in place. You will need to file ITR very soon and it’s better that you start the process in all earnesty to avoid the last-minute chaos. From Bank interest statements to mutual funds investment statements, collate and organise all of them.

 Decide on which tax regime suits you and plan your taxes now. When tax planning is done at the last moment, you end up investing in the wrong kind of financial instruments. Some may have a higher lock-in period and some may not match your risk profile.

One of the biggest lessons from the pandemic has been  about the uncertainties surrounding our life and health and the importance of investing right to guard against it. And one of the best ways of doing it is by making sure you get adequate insurance cover through both Medical and Life insurance policies.

Another important learning from the pandemic is that, when a big crisis strikes, you need a safety net of cash. And what better time to start building that contingency fund now, at the onset of the financial year. This Contingency fund can be an FD or a debt instrument, make sure you consult your financial advisor before putting your hard earned money.