I will get my PF and gratuity soon. Where should I keep the money?

The date is fixed. In a few weeks, your PF balance, gratuity and perhaps leave encashment will arrive, together, in one bank account. For many people it is the largest sum they have ever seen in their own name.

That is also the moment you are most likely to make a hurried decision. The good news is that nothing has to be decided on day one. The first ninety days are for parking the money safely and putting things in the right order.

What will actually arrive, and is it taxed?

Before planning, know the three amounts and their tax treatment, as of October 2026.

For gratuity, a part-year of more than six months counts as a full year. Government employees have different, more generous treatment for both gratuity and leave encashment.

Days 1–7: Park it somewhere safe and boring

When the money arrives, do not leave it in an ordinary savings account earning very little, and do not rush into anything long-term either. A simple parking arrangement:

• Sweep or short FDs across two or three banks. DICGC insurance covers ₹5 lakh per depositor per bank, so do not keep everything in one place.
• A liquid fund for part of it. This is a mutual fund that holds only very short-term debt (maturities up to 91 days). It is generally easy to withdraw from at short notice.

The aim is not to earn the highest rate. It is to keep the money safe and available while you think.

Days 7–30: Clear costly loans first

This is where the order matters most. A personal loan in the mid-teens or a car loan costs you more each year than an FD or a government scheme will earn. Closing the costliest loan first is often the best "return" available, and it lowers your monthly outgo just as the salary stops.

Floating-rate home loans to individuals carry no prepayment charge. Whether to close the home loan as well is a closer call: if the rate is modest, you may prefer to keep that money liquid. Our guide on whether to break an FD to close a personal loan explains how to compare the two.

Then set aside an emergency and medical reserve, separate from everything else: often six to twelve months of expenses plus a medical cushion, kept in FDs or a liquid fund. Check your health cover too. If you were covered only under your employer's group policy, that cover may end with your job.

Illustration: A private-sector employee retires after 25 years. His last basic plus DA is ₹60,000 a month, so his gratuity is ₹60,000 × 15/26 × 25 = about ₹8,65,385. His EPF balance is ₹48 lakh and his leave encashment ₹4 lakh, bringing the total to about ₹60.65 lakh, all within the tax-free limits above. He has a ₹3 lakh personal loan at 14% and a ₹4 lakh car loan at 9.5% (illustrative rates). Closing both costs ₹7 lakh and saves up to about ₹80,000 of interest a year at those rates, and removes two EMIs. He then puts ₹10 lakh into an emergency and medical reserve. That leaves about ₹43.65 lakh to plan over the next two months, with no pressure. (Illustrative numbers, not a real client.)

Days 30–90: Work out the income you need, then decide

Only now does the investment question start. Write down your monthly expenses, including yearly costs divided by twelve, and any pension you will receive. The gap is what the lump sum has to fill.

From there, many retirees split the money by when it will be needed: near-term money kept safe, a middle portion in stable schemes such as SCSS (the Senior Citizens' Savings Scheme, 8.2% as of October–December 2026, up to ₹30 lakh) and Post Office MIS (7.4%), and a smaller long-term portion for growth. We walk through that in how to split a retirement corpus and how to turn savings into a monthly pension.

How do you spot a product being sold, not advised?

The week your money lands, you may get calls and visits: from the bank where it was credited, from agents, sometimes from well-meaning relatives. Some offers may be fine. Many are products that pay the seller well and lock you in for years.

Ask these questions before signing anything:

1. How long is the money locked in, and what happens if I need it in year two?
2. What are the total charges, including commissions and surrender charges?
3. Is the "return" being quoted actually promised in writing, or is it an illustration?
4. Why does this need to be decided today?

If the answer to the last question is "the offer closes soon", walk away. A good decision will still be available next month. Never share OTPs, passwords or account details with anyone who calls about your retirement money, however official they sound.

What does a calm first quarter achieve?

By day ninety, you have closed the loans that were costing you the most, built a reserve you will not touch for routine bills, and know exactly how much monthly income you need. The rest can be invested in stages, not in one hurried afternoon.

That sequence — park, clear costly debt, set the buffer, then invest — is exactly what we map in a first conversation. Where the decision is about a specific fund, bond or policy, take that advice from a SEBI-registered adviser who has seen your full picture.