1. A Liquid fund scores over a bank's savings account on all fronts except the cheque facility.
2. Currently, savings account interest rate is around 4% while the returns on a liquid fund is 7-9%, which is still 5-6% post-tax even at 30% tax rate.
3. You can invest in a liquid fund for a few days or months and withdraw from it daily, or even fully, like savings account, without any exit load.
4. As a liquid fund is related to short-term market rates, it is not totally interest risk-free, hence the change in daily NAV, unlike a more constant savings account rate.
5. However, a liquid fund prevents credit risk to your money by investing it only in superior creditworthy debt instruments of upto 91 days maturity.
6. Most of the AMCs who have their own Apps are also offering online facility for handling your daily needs through liquid funds.
7. For a new investor, KYC compliance will be required, and this too is being offered by several AMCs online!
2. Currently, savings account interest rate is around 4% while the returns on a liquid fund is 7-9%, which is still 5-6% post-tax even at 30% tax rate.
3. You can invest in a liquid fund for a few days or months and withdraw from it daily, or even fully, like savings account, without any exit load.
4. As a liquid fund is related to short-term market rates, it is not totally interest risk-free, hence the change in daily NAV, unlike a more constant savings account rate.
5. However, a liquid fund prevents credit risk to your money by investing it only in superior creditworthy debt instruments of upto 91 days maturity.
6. Most of the AMCs who have their own Apps are also offering online facility for handling your daily needs through liquid funds.
7. For a new investor, KYC compliance will be required, and this too is being offered by several AMCs online!