How do I invest for an expense coming up in a year ?

Goal : I have an expense coming up in 1 year’s time. Instead of just keeping aside the money in a regular savings account I want to invest it in a safe instrument. Target being capital protection and making sure I have the money when I need.

Let’s say, for some gentlemen it could be, the AMD Ryzen 9 5900x and a compatible mother board. Lets peg the expense to about 1 lakh INR.

Safe instruments, that I know of

  • RD

How does RD work ?

  • You deposit a fixed amount every month and at the end of tenure you get back the principal that you have deposited plus some interest.

You can check out their calculators here:

How does a Money Market Fund work ?

  • You can buy any amount at any time you want. No fixed commitments on the amount or the tenure.

One such MF : ICICI Prudential Money Market Fund

How does a Liquid Fund work ?

  • All the rules for deposit, withdrawal and taxation is same as the Money Market Fund.

One such MF : Parag Parikh Liquid Fund

Comparing these instruments to, the laziest option of leaving it in your savings account.

Savings account interest rate depends on your bank, the type of savings account you have and may also depend on the balance in your account. You need to check your particular savings account to be sure.

TLDR : Start an RD (in any other bank except CITI).

Sidenote : Screw Medium for it apathy for Tables and general lackluster editing support.




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Abhishek Anand

Abhishek Anand

I stare at screens for a living.

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