February 18 2019
Investors today prefer to park their money in debt or liquid funds to earn better returns than savings account. Currently, the liquid funds are giving 6-7% return which is far more attractive than savings account returns of 3-4%.
The savings for short term goals in liquid debt funds can be done through lumpsum of monthly SIPs.The money is available for withdrawal anytime with a one day notice, without any charges or penalty. The investment and withdrawal can be done online without any paperwork, thus saving on time and effort.
There can be several short term goals for which savings could be done in liquid debt funds.
One of the major recurring requirement is annual school fee payment in April every year,which is usually a large sum of money and it is difficult to accommodate the same in monthly expenses.
Thanks to social media, foreign vacation is another trend these days. Pictures are not enough anymore. People wanted to experience beautiful and serene foreignlocations themselves. Debt funds are one of the best option to accumulate the funds to finance such vacations.
Debt funds can also be used for creating emergency fund, down payment for car or house purchase, to fund maternity expenses or to fund any other financial requirement that may come up in next 1-2 years.
Savings for short term requirements is a critical for prudent financial planning. By providing for short term goals separately, investors can avoid taking credits or loans or to pull out funds from equity based investments that may impact their long term goals.
We recommend you to discuss your tax saving investment plans with your financial advisor or consult your Personal Investguru Advisor@9910423232 before making an investment decision.