Case Study #1 on Matching Financial Goals with Financial Instruments

A reader asks,

I want to contribute for my sister’s marriage which we’ve planned for in two years’ time. Could you suggest the best possible short-term investment plan for this purpose?

My suggestion:

Park your money in bank fixed deposits. They’re safe, offer decent returns, are liquid if planned for correctly, and more importantly, match the purpose and time frame of the planned goal.

What do you think? Would you suggest a different course of action?

Note: I did think of Fixed Maturity Plans (FMPs), but given the recent bad press on mismanagement of such plans by fund houses, decided against them. Plus, understanding FMPs and their investment methodology demands a certain level of financial literacy.

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