Yes you read it right, and this is the advice that I gave a person who was willing to invest….

Obviously, there is a catch.

This is about a 86 year old widower who has a couple of million Rupees lying around in his life. He has a pension which is 2X of his monthly expenses – which allows him to make 1-2 SIPs at this age too.

So he has been bombarded by mutual fund agents, life insurance agents, bank relationship managers….all badgering him to invest. He had about Rs. 600,000 in his SB account and Rs. 25L in his PPF account apart from a couple of million in his bank FDs.

He asked me ‘should i keep money in a mutual fund or in a bank fixed deposit – which is better’. I said NEITHER. Let is be in your savings bank account earning less than FD -not an issue.

He said ‘this cannot be you’ – in your blog you say money should not be lying in the savings bank account…..and now…!

I said ‘Your son has a huge house, net worth, one earning daughter (the grand daughter of the 86 year old man and about to get married), tons of money…’ so whether you leave him X or Y or Z may not really matter. Earning a better return is a good thing, but it is NOT the only thing that money should do. It should also give you peace of mind. As you do not need the money ….leaving it in the savings bank account is not such a bad idea. At least you do know that every thing is concentrated and in one place. No Tax, no tds….stay cool.

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  1. Subra, I think he can also use facility like Axis Bank provides of Encash24 (and many other Banks) in which Bank pay higher interest rates equivalent to FD in case it exceeds some amount and keeping liquidity intact

  2. The ‘trouble’ with such a situation is that he will have to forever keep fighting off “…mutual fund agents, life insurance agents, bank relationship managers… all badgering him to invest.”

    He will have to be persistently stubborn and not get fed up of their continuous badgering to part with his money !

    Btw, I wonder what the ‘life insurance agents’ would be trying to sell him !
    “Sir, you *need* insurance for the time when you will turn 110 years old !” ???

  3. Very well written, I am a regular reader of your blog and sometimes you make blunt and sarcastic remarks in your blog entries and after reading the title I thought it would be another such a post but its quite different, the person about whom you have written is correct when he says it cant be you when you advised him about keeping the money idle in bank, but considering his age this is the right advice.

  4. I want to subscribe for the new blogs. Please let me know the procedure. I am not getting any place where I can give my email id for subscription.

  5. @Veersh: You can subscribe to the RSS feed and have it delivered to your MS Outlook of you can even you google reader…
    i dont think there is an email subscription here…
    at max you can get notification by mail

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