Do you use your idle money wisely?

Tweet

Suppose you get your Salary/Rent on the 1st of every month. It is unusual for you to have your entire months expenses on the 1st itself. The expenses will be staggered and spread throughout the month. Ex Mobile bill on 5th School Fees on 10th Credit Card on 15th EMI on 20th Monthly SIP on 25th Till these expenses come up, you tend to lock your money in Bank wherein you are getting 4% (yes, some banks do offer 6% for Saving Bank Account, but these rates come with lots of conditions like balance of more than 1 lakh) So, when I consider 4%, you are better off investing in Liquid Funds where returns match 1 year Fixed Deposits. Right now, even the under performing liquid funds have been giving 8%, which is DOUBLE the rate of Saving Bank Deposit. Another Advantage of investing in Liquid Funds instead of keeping in SB account is that Liquid Funds are in true sense “liquid” that is, you get your money within 24 hours and whats more some AMCs also offer ATM Card for your investment which you can use to withdraw money anywhere, anytime. Theoretically speaking Liquid Funds are not Capital Safe but Liquid Funds invest in Money Markets, Short Term Corporate Deposits and Treasury and hence very liquid and very safe as all these instruments have very low risk and enjoy high liquidity.