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Investing Immediate Money

Utilising excess money while maintaining liquidity in short-term

I have an amount of Rs 40,000, which I plan to use after six to eight months. But I may require immediate liquidity. Please suggest where to put the money. I also want good returns. My guess is that a fixed deposit will not be good as I will have to break it and I will not get good returns then.
-    Sachin Kangutkar

The solution lies in the fact whether you are sure of when you will need the money. If it is pre-determined that you need your money at a particular time then you can invest in a bank fixed deposit too. You will be able to select the apt time frame then and you need not face the penalty of pre-mature withdrawal. Your returns will be guaranteed in this case. But if you vaguely know that it could be anytime between six to eight months, then it is better to opt for a liquid fund. Liquid funds are reasonably safe and redemption in a liquid fund takes T+1 day.

However, if this money has to be used for emergency purposes where you need to liquidate it immediately and cannot wait for T+1 day as in case of liquid fund, it is always advisable to put your money in a recurring deposit so that you can have instant access to it anytime whenever the need may arise.


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