Don't keep your money idling

What is good about me writing is I am writing from experience and hoping to get people to avoid the mistakes I have made or for people to follow the right decisions I have made.

One critical part of an investment strategy is to ensure that you make money work for you.


That basically means that we should not keep money idling in our bank accounts. Bank accounts in India gets us about 4% of interest per year which after a 30% post tax is about 2400Rs per annum on an average cash balance of Rs 1Lakh.

Now you ask...
1. did you not tell me that I should have 6 months of monthly expenditure as an emergency fund. That will be in the bank right ?
2. The market is too high.. I want to wait for a good opportunity..so I need to keep this in my account right ?

Well.. the answer is NO.. No longer.

There are quick and easy ways to invest in liquid funds which can get you around 7-9% returns per annum and because of indexation you will not need to pay that high a tax also as compared to a fixed deposit

When you want to sell the liquid funds one can get the money back into the bank account in max a days time.. great for liquidity.

Now there are certain conditions.. there maybe an exit load of 0.5% if you take out the money in less than 90 days.. but it depends on the liquid fund. In anyway.. the return is more than that of a fixed deposit.

Get your money to work..don't let it idle.. it's simplefinancialsense