Dont Keep Money in Savings Bank Account
Managing Money is More Important Than Earning More Money - Vaasu Challa
My Suggestion - keep your money in Liquid Funds instead of Savings Bank Account.
What type of money should you keep in "Liquid" Mutual Funds :
1. Your salary till your next EMI due 2. Bonus till you spend/plan it 3. Sales proceeds of your flat till you invest in new one 4. Funds created for your child's education /marriage till you use it 5. Lump sum amount lying in your bank account which you may be required any time 6. Funds lying idle for over long weekend(Saturday and Sunday)
Why should you invest in liquid fund? 1. No lock in period. 2. Historically attractive return 7 to 10% annually
(against 3.5% in saving account or 0% in current account ) 3. Online access 4. Minimum Rs. 100 maximum no limit 5. Debit card facility available.
6. Can Earn interest on interest Daily.(Compounding)
Is there any chance of loosing money when I invest in LIQUID FUNDS?
Almost No (0.001% If you compare it with stock market 100%) The average returns of most of the liquid funds are 7 to 10%.
Today I invested Rs.1000 in liquid funds. Can I with draw it tomorrow?.
Yes. You can raise request for withdrawal. You will be paid 1 day interest.
How banks differ in calculating interest with Mutual Fund Companies?
Banks follow simple interest(Once for every 3 months). To say logically mutual funds companies follow compounding(daily. Interest on interest). So investing in mutual funds make your money grow faster.
Is there any minimum amount for investing?
You can start investing with as low as Rs.100/-. But i do suggest start with Rs. 500 or Rs.1000.
Is there any tax benefits if I invest in liquid funds?
No. No tax benefits applicable in liquid funds. You can invest in ELSS(Equity funds) for tax benefits with a lock in of 3 Yrs.
Apart of above, We are happy to help you on tax savings, financial planning, fund selection..Etc.