Say Hello to Lalit and Rohan!
Both are working in the same organization; earning the same sum of salary; spending their salary on the essentials, in EMIs, household chores, credit card bills, emergency expense, investing in a mutual funds through a SIP and what not! Giving the pat on their back, Lalit and Rohan still end up having around ₹20,000 at the end of the month after all the expenses. Let’s see what they do with this ₹20,000/month.
Lalit keeps his money lying in savings account whereas Rohan every month puts money in liquid funds.
Now, let’s see what happens with their money after 2 years. Here:
LALIT (Savings Account) | ROHAN (Liquid Funds) | |
Amount saved every month | ₹20,000 | ₹20,000 |
Rate of Return* | 3.5% | 7.5% |
Amount Invested | ₹480000 | ₹480000 |
Amount Earned | ₹497898 | ₹519360 |
Wealth Gain | ₹17898 | ₹39360 |
You can see with just one disciplined habit of Rohan he is able to earn more than double as compared to Lalit who is just wasting his money in the savings account as the inflation rate is 4-5%.
So, the moral of the story, don’t let your money rest in the savings account, rather make a habit of putting in liquid funds which are easy, secure, happily with no lock-in-period, but with better returns as compared to the savings account, the flexibility to entry and exit, easy liquidation as per the name, instant redemption, and low expense ratio. Precisely, the perfect way to save for (short-term) goals.
Thinking to invest?
Well, just to help you a bit Here are the list of top 5 liquid mutual funds: (As per Economic Times)
So, what is your pick for the money? Making them idle in the savings account or investing in liquid funds?
Keep Investing!
*Mutual fund investments are subject to market risks. Please read the scheme information and other related documents carefully before investing.