Feb 27, 2017 3 min read

Want to Earn High Returns on Savings? Invest in Liquid Funds

If you have the desire of making the best use of your savings to earn high profits, then this blog is a must-read for you.
Savings bank account is the most common way of holding cash for immediate requirements. But don’t you think it diminishes the worth of your money? Well, earning 4-5% interest with inflation of around 8-9% is simply a bad idea. When you have the option to earn better returns with same flexibility of withdrawal, then why not opt for the same! Use Liquid Mutual Funds for your portfolio to enhance the worth of your savings.

You probably think of mutual funds simply a way of investing your money. But, liquid funds which are categorised in debt funds provide more than investments to the investors. It provides a way of saving money similarly as in the case of savings account of banks, and let it grow at a higher interest rate. Investors having the misconception that mutual funds are simply for making money grow over a long-term tenure must analyse the ultra short-term debt mutual funds or liquid funds to know the essence of the same.

“Liquid Funds are Similar to Savings Bank Account.”

We know that bank account allows us to put our money in them and let it earn interest. We can withdraw the amount whenever we require without any exit load or other expenses. It is simply a way of keeping money safely while earning returns at the rate of 4-5 percent.

In the case of liquid funds, the investors are allowed to park their money without any entry load, and earn a considerably higher interest rate of around 7-9 percent(as per the past performance). There is no holding period as well, and you are allowed to withdraw the amount even within 24 hours of allotment of the units. The Reliance Money Manager Fund which is a liquid fund scheme from Reliance Mutual Funds provides an additional benefit by providing you with a debit card using which you can withdraw your money anytime anywhere from any branch of HDFC Bank ATMs.

Why Invest in Liquid Funds?

Whenever it comes to investing your money, the foremost question that arises in mind is what shall be the returns for the same. Investments are made for the purpose of increasing the value of capital and earn considerable income on a regular basis. The liquid fund investment also provide the same.

One can park the money in these funds for a shorter duration (i.e., less than one year) and earn 7-9 percent returns. Moreover, you don’t even lose the liquidity of your money and can withdraw the amount as and when required without any exit load.

On the flip side, where earnings on savings account are subject to income tax, the returns earned from the liquid mutual funds are not liable for taxes and one needs to pay tax only on the amount of withdrawal on which the tax rate is similar to that on interest income.

Safe Side of Liquid Funds

The safety of our invested capital is a priority for all of us. The saving bank accounts provide a high degree of safety for our money in terms of regular income. The liquid funds also provide the same benefit to the investors regarding security. The investments made by this fund are primarily in the short-term debt instruments like Commercial Paper, Certificates of Deposit, etc., which means minimal interest rate risk. Moreover, it invests in the government securities which provide high security and fixed returns on a regular basis.

This way, the savings invested in the liquid fund plans help the investors in gaining superior benefits and large income. Thus, we highly recommend everyone to put their money in the liquid fund plans and give their savings high worth income.

If you further need assistance in financial planning and want to invest in liquid fund online through SIP or lump sum, then you must avail our online investment services. Our fund analysts and advisors would help you in gaining high income from a worthy portfolio. MySIPonline is aimed at serving to the needs of every investor, and you too must get associated with us to experience the difference.

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