Keep your returns scoreboard ticking with liquid funds
In cricket, when a batsman is facing a tough bowler, it is difficult to hit big shots like 4s and 6s due to the risk of losing wickets. But in such situations, a seasoned batsman tries to get as many singles as possible to keep the scoreboard ticking while ensuring that pressure does not build up towards the end.
Smart and athletic batsmen will also ensure that they make the most of every opportunity of converting singles into doubles by improving their running between the wickets. The overall intention is to score whatever you can, without taking higher risk under those tough batting conditions, because in the end it all helps in setting a bigger target for the rival team or chasing the target that the other team has set for you.
Chasing your savings targets
Now compare this with the way you manage your finances and investments. The way a batsman has to set or chase a certain target score, as an individual you would also have certain financial goals or targets in life — be it earning higher return than inflation or achieving your life goals such as buying a car, buying a house or simply accumulating a certain sum of money by a certain date. But are you making every effort to earn the best possible returns on the money that you have so that you get closer to your life goals?
Often, you cannot aim to earn very high returns on all the money that you have because aiming for higher returns may involve taking higher risks or may require you to lock your money for a longer period. And you may invariably have some money that you may want to access anytime.
Investing it right with Liquid Funds
So where do investors usually keep such money? The most common answer is a bank savings account. Now, like a seasoned cricket batsman who tries to keep the scoreboard ticking even under tough conditions, can you as an investor make a little higher return on such money instead of earning just 2–3% in a savings account and that too without taking higher risks or locking your money for a long period?
Liquid funds is your answer.
Liquid funds are safest among all mutual funds as they invest in fixed income securities issued by banks, government and large reputed corporations. And they don’t invest in the stock market.
Liquid funds tend to give much higher returns than the bank savings account. Here’s a yearly comparison of interest rates offered by savings accounts and average returns offered by liquid funds.
Liquid funds have no lock-in and offer an instant withdrawal facility wherein withdrawal amount will be credited to your account instantly (subject to max Rs.50,000 or 90% of your investment value, whichever is lower ) and the remaining amount will be credited in 2 working days.
You also don’t need to keep any minimum balance in your liquid fund account. Liquid funds offer a high level of transparency which means you can track the value of your investment every day and the best part is you can start with as little as Rs.100.
So just like a great cricket batsman who keeps his scoreboard ticking without taking too much risk, keep your returns scoreboard ticking with liquid funds without higher risk or locking in your money. Remember, every additional percentage point that you earn on your money contributes to your life goals.
Mutual Funds are subject to market risk. Please read the scheme information document carefully before investing.
PhonePe Wealth Broking Private Limited | AMFI — Registered Mutual Fund Distributor ARN- 187821.