If you have money to put away for a while, instead of a savings account, you can invest your cash in mutual fund schemes also like the money market or liquid funds. These schemes invest in short-maturing instruments, such as low-risk money market securities.
How do you invest?
First, it is necessary to identify the liquid fund and the financing house where the investment should be made. It is good to take suggestions from a registered investment advisor for the same, as you can invest in a liquid fund by completing a purchase form or via an online platform. Some fund houses require certain minimum and higher investment amounts to invest in liquid funds.
The ratio of cost charged by the investment fund to manage the investment of the liquid fund. As it is very low and is 1.05%. There is no exit fee for the investment period beyond 6-7 days, as the main perspective is to provide high liquidity. Even in the case of shorter periods, less than a week, the output load is within 0.006% of the recovery value.
To obtain a refund, the investor must submit a redemption request, either online or by completing a redemption request. In case of liquid funds the Redemption requests are generally processed within one day and the investor can obtain a balance in his registered bank account later. Few of the finance houses offer immediate repayment returns of up to a certain percentage of the amount invested for liquid funds.
Points to note
KYC procedures must be completed to invest in mutual funds.
If redeemed within 3 years of investment, it equates to short-term capital gains and is taxed at the marginal tax rate applicable to the investor.