Got your Diwali bonus? Here's how to make the most of it
BSE Sensex, which has delivered an approximate 16% annualised return over the last decade, underscores the potential of diversifying your investment portfolio with equities. A study by CRISIL Research has revealed that equity mutual funds have outperformed other asset classes over the long term. Over the past 30 years, equity mutual funds have recorded an average annual return of 15%, surpassing the 10% for fixed deposits and 12% for gold.
For those who prioritise safety and a consistent source of returns, contemplate placing your bonus in debt funds or fixed deposits. This prudent move can yield a steady return of 5-7%, offering capital protection and liquidity. According to a study by ICICI Securities, debt funds have consistently delivered stable returns over the past decade.
In the financial year 2022-23, debt funds provided an average return of 8%, while fixed deposits offered an average return of 6%. Gold, renowned for its value preservation, has witnessed a remarkable 22% price increase from November 2021 to November 2023. Investing in Gold Exchange Traded Funds (ETFs) acts as a hedge against inflation, further enriching the diversity of your investment portfolio.
A study by the World Gold Council attests to gold's positive correlation with inflation. Over the past 50 years, gold has outperformed stocks and bonds during periods of high inflation. By the Income Tax Act, it is imperative to acknowledge that gifts exceeding INR 50,000 in a year are integrated into your taxable income and are subject to taxation at applicable slab rates.
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