Suppose you keep cash that values to Rs 50000 with you in a locker at your home. You have no intention of spending it and it simply lies there. About one year later, it is still lying at the same place, the same amount. There is simply no increase. Now, let's suppose you decide to put it in a savings bank account.
Well, at the year's end, you may get a small amount on it as banks pay about 4% on an average on your saving account balances. If you keep the same money in a current account, you won't get anything and after one year, the amount will remain the same. Thus, it is quite hard sometimes to manage your finances and you may need an additional amount of guidance, to get things going in your favor.
Wealthclock Advisors works with the same aim; to help out people confused about investment and the world of finance. Every one of us needs liquid cash for our everyday needs. It is the easiest form of currency to make payments and there is no charge incurred on it too. However, idle cash is useless cash. It is not earning anything for you and is also, reducing in value in terms of purchasing power over time. So, what to do?
Liquid funds can be a great solution
Liquid funds can easily be converted to cash as per requirement. They are for a shorter period of time and the type of securities they invest in reflects that nature. Individuals, as well as small businesses who deal in plenty of cash, can generate a few returns on their surplus cash if they park the funds in liquid funds.
Now for instance, if a small scale businessman knows that he has some payments that are worth Rs 5 crore coming up after the next three months, and puts it in a current account it will simply lie there without earning anything. Putting the money in long-term instruments will simply block it. A liquid fund in this scenario would be the best investment option for him. As a matter of fact, liquid funds are thought as the less risky one among all mutual funds.
So ideally, you should invest in liquid funds when you have surplus money lying idle and need to deploy it for a short period of time. These funds would be invested in extremely short term debt and money market instruments that are highly rated, thus providing easy liquidity along with returns in line with that prevailing in the market.
What are the benefits of going with liquid funds?
So, should you go for liquid funds or not? Decide on for yourself. You can also visit us for the most helpful mutual fund investing advice.
Liquid funds give you a higher return than the normal savings account, even after considering what impact the expense ratio has. So, liquid funds are much more lucrative than the other option to park your cash. So, make the best decision and enjoy your investment time!
Wealthclock makes investing simple, safe and convenient. We offer mutual fund investment and financial markets advisory over the friendly and interactive online platform that makes investing fun for all first-time investors. With the help of advance tools, detailed market analysis and team of expert advisors, Wealthclock ensures that the users are on top of their game. Come and watch your investment grow.
Wealthclock Advisors, Manish
Mahal, Off Veera Desai Road,
Jeevan Nagar, Andheri West,
Mumbai - 400053 Maharashtra
Plot no. 146, 19/7,
Sahapur Colony, Bankim Mukherjee Sarani,
Block J ,
Kolkata, West Bengal - 700053