Most salaried individuals rely on their monthly salaries as their sole source of income. Every month, your salary is credited into your salary accounts, and at the end of the month, many of us are left with a little extra before our next salary is credited. This a little bit ‘extra’, is known as savings, and like every Indian, we love to save money.
What if I told you could use your savings to make money rather than it simply lying idle in your bank account and having its value eroded by inflation. While many of us avoid investing money as we fear investing will hamper our liquidity position and due to other risks involved in investing money.
What if there was a way to invest money your money and allow it to grow while ensuring your investment is safe and can be accessed wherever your liquidity needs arise.
Bank Fixed Deposit
Bank fixed deposits are considered as one of the safest forms of investments. Most commercial banks offer fixed deposit facilities to their account holders. Account holders can opt for their fixed deposit tenures ranging from 7-days to 5-years, and the rate of interest offered will depend upon the tenure selected.
Most banks offer an interest rate of between 7 per cent to7.6 per cent per annum on fixed deposits, and a fixed deposit holder can liquidate their fixed deposit investment within a day’s notice in an event they have an urgent need of funds.
Recurring Deposits are one of the best instruments to invest in if you wish to develop a habit of saving. Recurring deposits require the account holder to deposit a predetermined amount periodically in the recurring deposit account. Similar to fixed deposits, account holders can select the tenure of their recurring deposits, and recurring deposits offer interest rates similar to fixed deposits.
Liquid funds are mutual funds which invest in short-term certificates of deposits and government securities having short maturity periods ranging between 4-days to 91-days. These funds are very easy to enter, and exit as a result of this have high liquidity value and is a secure short-term investment option for individuals who wish to park their funds for a short period of time. Though like every mutual funds, liquid funds are also subject to market risks. Nonetheless, based on their historic performance, liquid funds are known to offer higher returns compared to a fixed deposit.
While savings is a healthy financial habit, allowing your savings lie idle is not considered a healthy financial habit. Be smart, be wise, invest your savings and allow your money to work and earn some returns for you while you simply sit back and relax.