Anjali and Uday on how they spend their earnings.

After meeting those expenses, Anjali and Uday call what is left as surplus income. Here is where they invest this 'surplus income'.

Fixed deposits

Three years ago, they began investing in fixed deposits.

Around 15% of this 'surplus income' is invested in fixed deposits every two months.

"The amount may vary from Rs 5,000 to 15,000 depending on the disposable cash for that month," says Anjali.

Though deposit rates are not that lucrative, the couple is of the opinion that it is a smart way of keeping cash handy for a rainy day.

These are fixed deposits that can be broken. For instance, if you have a deposit of Rs 50,000 but need Rs 25,000, you can break the deposit and withdraw Rs 25,000. The balance amount will continue as a fixed deposit and earn the rate of interest.

Principal amount in fixed deposits: Rs 50,000

Recurring deposits

Besides the above fixed deposit, they have started a recurring deposit with the State Bank of India [Get Quote]. This is a deposit which requires you to put in fixed amounts every single month.

This deposit is for a tenure of two years and Anjali and Uday have each committed to an amount of Rs 5,000 per month. This will fetch them an annual interest of 6%.

"The recurring deposit is a forced saving scheme. By getting that amount deducted through electronic clearing system in the beginning of each month, we take care of 'we-must-save-some-money' bug and also we take a step forward in our joint saving venture," says Uday.

Amount on maturity of the deposit: Rs 5,000 invested over 24 months at 6% per annum, compounded annually, works out to Rs 127,581 per head. So their total investment would work out to Rs 255,162 on maturity.

Public Provident Fund

Being conservative in their approach, PPF scores high with them. They began this account in 2001 and each put in Rs 70,000 every year.

PPF, according to them, helps builds a solid long-term asset and is the best thing to bank on post retirement. "It is the safest investment mode which earns a high rate of interest -- 8% and tax free," they say.

Amount deposited in PPF: Their total contribution to date in PPF would be Rs 840,000 (2001 to 2006).

Insurance

Two years ago they bought a Jeevan Sudha insurance scheme from Life Insurance Corporation of India. They pay Rs 20,000 annually for 12 years.

On maturity, which is 20 years, they will get Rs 12 lakh (Rs 1.2 million).

National Savings Certificate

They have taken a joint investment here which gives them a return of 8% per annum.

Amount in NSC: Rs 50,000.

Equity

Anjali's father had once invested in shares and burnt his fingers. This left an indelible impression on Anjali's mind and she vowed never to dabble in it.

Uday, on the other hand would love to but she holds him back. At one time, he did invest in shares and he too lost money. After that, she is determined they will keep away from the market though he is still not totally averse to it.

Consequently, they shy away from equity and equity mutual funds. They don't mind the cut in returns but they want to be sure of their capital and their return.

Gaurav Mashruwala comments on this couple's portfolio