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How best to use this
additional money

We recommend »

  • Repay existing debts, get rid of EMI burdens off your shoulders
  • Identify your Financial goals like vacation, child education, retirement
  • Invest in the right Mutual Funds and achive these goals.

As per the recommendations of the 7th Pay Commission, all government employees are set to receive revised allowances in their salary starting July 2017. In addition to increments in salary, each individual is also entitled to receive arrears, which will be a significant lumpsum amount.

If you are wondering how to use this extra money wisely, then let IIFL help you out. The ideal way to spend the extra income is to save some and spend some.

We Recommend

Payoff your debts :

If you have borrowed any money or have a loan, you should first look at repay your debts and at the same time invest a small portion towards wealth creation your first priority should be repaying the debt off your shoulders. However, it would be wiser to invest a small portion towards wealth creation.

Plan for your goals :

In order to meet your financial goals, you should plan your investments carefully. Discipline and persistency are key in order to fulfil your financial requirements. The easiest way to create wealth is to invest in Mutual Funds. They provide you a route to higher returns with low risks combined with flexibility in investment amounts and ease of withdrawal.

There are different types of funds available to select from as per your financial goals. If you’re young and looking to generate wealth over the long-term, you must invest in equity oriented mutual funds. Historically, in the long term, equity oriented mutual fund returns have outperformed traditional asset classes, like gold and real estate across various time-frames.

If you’re looking for low risk and regular returns to supplement your income, then debt funds provide higher and tax-efficient returns compared to bank deposits.

Current IIFL Recommended Mutual Funds

      Returns Generated
Scheme Name Fund Manager Corpus (Rs Cr) 1 Y (%) 3 Y (%) 5 Y (%)
Balanced Fund (For long term goals)
HDFC Prudence Fund(G) Prashant Jain 22,057 27.4 14.3 18.4
ICICI Pru Balanced Fund(G) Sankaran Naren 10,814 26.7 17.0 20.4
Large Cap (For long term goals)
SBI BlueChip Fund-Reg(G) Sohini Andani 13,339 17.9 18.4 22.1
Birla SL Top 100 Fund(G) Mahesh Patil 2,803 21.6 14.3 20.9
ELSS (For tax saving needs)
Birla SL Tax Relief '96(G) Mahesh Patil 3,355 22.5 20.8 23.7
Reliance Tax Saver (ELSS) Fund(G) Ashwani Kumar 8,045 29.1 17.8 23.5
Debt Mutual Funds (For short term goals)
HDFC Corporate Debt Opportunities Fund-(G) Shobhit Mehrotra 11,436 10.3 10.2 0.0
ICICI Pru Income Opportunities Fund(G) Manish Banthia 4,219 10.1 10.3 9.6

Source: IIFL Research June 2017 - Disclaimer

It is best to invest the above money periodically through a Systematic Investment Plan (SIP). A SIP helps you to grow your monthly consistently over a period and is largely immune to Market ups and downs.

How would SIP benefit me?

Rupee cost averaging

All market ups and downs even out in the long term allowing maximum returns over time


Options for aggressive, moderate and conservative investors

Investment discipline

Encourages saving habit & inculcates a focused and dedicated approach towards investment

Power of compounding

An investor starting out early can earn much higher returns than a one starting out late even with a higher corpus