Where should I invest my FD money?

I am 41 years old. I want to invest in mutual funds for six to seven years. I can take moderate risk. My goal is to create a corpus for my son's education.

I want to start SIP of Rs 1 lakh. Which scheme should I choose? I also have Rs 10 lakh in FD which is matured now. How do I move that money to mutual funds?

--Manju Charan


Puneet Oberoi, Founder, Excellent Investment Advisors, responds:

First thing you should be aware of is how much money you need for your goal. If you invest Rs 1 lakh per month for seven years at a rate of 12 per cent, you will accumulate approximately Rs 1.29 crore after seven years.

I will recommend these funds :-

1. Mirae Asset Emerging Bluechip Fund – Rs 25,000

2. TATA P/E Equity Fund – Rs 25,000

3. Kotak Classic Equity – Rs 25,000

4. Motilal Oswal MOSt Focused 35 – Rs 25,000

You should invest Rs 10 lakh that you got from your FD, in ICICI Prudential Balanced Fund. To reduce the risk you, you should not invest directly into this fund but opt for an STP option. You can put Rs 10 lakh in ICICI Savings Fund (liquid fund) and then do a weekly STP for 18 months.