Liquid Funds are for those who have Surplus Money in hand but don’t want to invest them in Fixed Deposits as they give better interest rates than FD. Money can be parked in them for a short period of 5 days even. The biggest advantage is you can do redemption and get your money back in you account in 24 hours flat , unlike an FD.
Liquid funds are ideal parking grounds when you have a sudden influx of cash either because you have received money from any legal settlement or from maturity of investments. It is noteworthy that liquid funds cannot be a full-fledged substitute for a savings bank account.
That said, given the low interest rates (about 4 per cent mostly and 6-7 per cent in the case of one or two banks) in savings account, you would do well to temporarily put your money in liquid funds to earn slightly higher interest. You can exit the scheme anytime without any exit load and receive your funds the next day.
Another way to make use of liquid funds is invest your lump sum receipts in them and then opt for a systematic transfer plan to invest in equity funds of your choice. Often, you would use SIPs to invest in equity funds. That is fine when you invest out of your monthly savings. But if you receive a large sum at one go, you can use liquid funds in such instances, to enhance your returns.
So to park your money lying idle in your savings account contact us now.