Nothing makes you feel more secure than having a lumpsum amount in your Savings Account, eh? Think again! If you are keeping your money in Saving Accounts, you can practically consider it dead. The liquid nature of Saving Accounts, coupled with their apparently attractive Interest Rates, makes it a convenient choice for people of every economic background. You as a consumer, however, may often miss out on the real balance between your expenses and investing properly.

With the savings interest rate hovering around 4-6%, the interest you earn is no match for the inflation rate. You can gauge how much good your savings account is doing when you calculate your Real Rate of Interest (Nominal Rate of Interest – Inflation Rate), and oftentimes you may observe that your savings are negative.

So how do you enliven your money from an essentially-dead, orthodox savings system? This is where you need to consider the variety of contemporary investment options that can accommodate every individual. There are a variety of options available in the market with the kind of returns you are looking at as well as the time period of investment.

If short-term financial goals are what you are looking at, Liquid Funds and Money Market Funds are your best bets. In the long run, you can look at Mutual Funds and Systematic Investment Plans (SIPs), Life Insurance Policies, and such other mechanisms. Liquid Funds, a type of mutual fund, are great for short-term investments which make them more accessible than Fixed Deposits.

Besides the liquidity, Liquid Funds also win over savings accounts due to higher returns on your savings – that too, post taxation. With tax rates for Liquids Funds depending on a lower dividend distribution tax as compared to higher income tax rates levied on savings accounts. They have no applicable entry or exit loads and being a short-term debt security with daily, weekly and monthly plans, they consequently reduce the interest rate risk.

The best savings strategy for long-term gains should include mutual funds, Unit Linked Insurance Plans (ULIPs), Liquid Funds and SIPs which help your money grow consistently and saves on your taxes. These mechanisms of investment typically come with a minimum maturity period of 3 – 5 years and medium risks, making their liquid nature ideal for growing your capital as well as inflating your income in the long run,  also including the lack of operational and maintenance charges which often eat into your savings account income.

So, get your savings out of a conservative program and #PaiseKoJagaao. Awaken your money and get it growing with a mutual fund or an SIP and experience the difference in your investment returns.

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5 responses to “Is Your Money Dying? It’s Time to Get It Out of Savings Account”

  1. Rumni Sen says:

    GST applicable for whom ?
    For Contractors etc

  2. Rumni Sen says:

    I also depend on saving bank and government instruments as PF and bank deposits long term and short term seeing the interest rate and fill the income tax on interest as per the income slab.

    i donot konw to speculation. speculation maynot be always correct. Once or twicwe is okay if you win then get the profit and then close and relax. Not correct i assume for heavy amount or longer holding period for us common this way we may earn 2to 3% after tax. But one has to burn oil. that that too may not yield always.

  3. Santosh Kumar Kar says:

    How to choose a proper mutual fund to invest idle funds lying in Savings account.

  4. Gurmit Minhas says:

    For NRO account holders could you please suggest
    any such funds where investment will give more
    riskfree returns?

  5. V.M Kulkarni says:

    I am 75 years Senior Citizen. What are the options available for investment to save tax. ?

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