Money lying in the economic organization account at 2%-3% loan charge?😕
Well, You can consider Liquid Funds Instead!!💸
Liquid funds are ideal for short-term goals, emergency funds or money that would have otherwise been lying in your economic organization account.
These funds earn mainly through loan charge payments on their debt holdings & a small part via capital gains!💰
And since the loan charge rates have risen now, they are giving a 5%-6% return.
Also, as the securities in the funds are short-term in nature, the fund is less prone to changes in loan charge rates. This means that liquid funds do not have significant capital gains or losses.😲
Things I keep in mind while selecting a liquid mutual fund:
– Expense ratio (direct) to be 0.20% or less
– AUM size minimum 15000 crores, higher the better
– around 75% of the collection of investments should be AAA rated
– Return should be in the range of +-0.5% of the benchmark
– At least 50% of the collection of investments should be in govt securities
Downside:
– If the loan charge rates decrease, the return from these funds will also decrease. The returns are not guaranteed.
– For a savings account, you get a deduction of Rs10,000 under section 80TTA on the loan charge you earn. That is not available here.
So, if you want to keep your money liquid at a slightly higher yield, consider Liquid Funds!!🤑
Disclaimer: This video should be used as an educational tool only and are not a replacement for professional funding advice.
#anushkarathod #investing #mutualfunds #liquidfunds
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