Variable Deposit
Variable Deposit is our solution suitable for conservative investors who aim for better returns than Fixed Deposits.
We are all familiar with investing in Fixed Deposits. In Fixed Deposits, capital is protected, investment return is fixed and maturity period is also fixed. You will exactly know the maturity amount that comes to you on maturity date in future.
This solution is akin to Fixed Deposit but the difference is, investment return remains variable and maturity period remains flexible. This solution avails CASTP (Capital Appreciation Systematic Transfer Plan) method available only in MF investments. In this method, your capital amount is invested in a debt mutual fund and then, only its appreciation amount is automatically transferred on monthly basis to an equity mutual fund as investment. In the medium to long term, debt mutual fund protects capital and equity mutual fund generates relatively higher returns. Thus, the combination as a whole is expected to deliver better returns than fixed deposit.
Attached below is an example which indicates the investment returns possible in this solution in the medium to long term. As shown, the maturity value and returns increase as maturity period increases. For this illustration, the average returns assumed in Debt MF and Equity MF are based on historic returns.
