The unprecedented Covid-19 crisis has turned everything upside down. Your financial matters are certainly not immune to the current crisis. Therefore, smart money management is critical to survival through this uncertain period.
This Money9 Helpline, an endeavour to help people navigate through financial distress, hosted Dhananjay Banthia, founder, Smart Acumen Consulting. Banthia advised our callers on how to deal with financial challenges and choose the right option among FD, PPF, MFs to deal with the financial crunch.
Apurba Sarkar, Kolkata: I am 52 years old media professional. I have been out of a job for six months now. I have a LIC Policy for which I pay a premium. I also have a PPF account that is in operation for the past 25 years. I have several FDs. So far I did not need to touch my FDs. But going forward, what should I liquidate for running my expenses. I have a son who is studying in college in the final year.
Dhananjay: I will suggest if you have invested in the fixed deposit in less than a year now, you can consider breaking the FD. The rate of interest is low in an FD which is opened between six months to 1-year tenure. So you can break your recent FD.
Nimesh Joshi, Gujarat: I have a stationery shop. Because of covid-19 and schools closed my business is almost shut. My son will be enrolled in college first year and his fee is Rs 1 lakh. Should I break my fixed deposit or PPF?
Dhananjay: You should assess the returns you will get for both PPF and FD. If the FD gives higher returns you can break and apply for partial withdrawal of PPF. But if the PPF is giving better returns then consider pulling out money from that, as the process is simpler.
Subash Bhattacharjee, Kolkata: For the last one and a half years my business is not doing well. I have decided to break my savings to run my household expenses. What would be my sequence for breaking my savings instruments- FDs, NSCs, PPF then MFs, or something else?
Dhananjay: First debt mutual funds, if the investment is done in last one year and two years. Second, you can look at fixed deposits.
