I have Rs 50,000 in my savings account. Should I transfer the amount to liquid fund to get better returns and liquidity or should I keep it in my savings account itself ?
Compared to bank savings account, liquid funds are tax efficient and hence offer better net returns. These funds invest in debt-and money-market instruments like certificates of deposit (CDs), commercial paper and treasury bills. It is for this reason that these funds are an ideal vehicle for parking funds before a final and long-term investment decision is made and can be handy if money is needed at short notice. You can consider investing in Principal Cash Management or JM High Liquidity Regular funds.