I want to save to accumulate down payment for a house that I plan to buy in 2-3 years. I used to invest in FDs, but want to move to mutual funds. Which type of funds would be suitable?
—Harsh Saxena
The investment horizon is 2-3 years and the accumulated corpus is to be used as down payment for investing in property. If this is your first property and is meant for your own residential purpose, you can invest in short-term debt funds. Ideally, target three years as the debt investment if held for more than three years becomes long term and eligible for benefit of indexation, leading to lower tax incidence.
