Savings Bank Account v/s Liquid Funds - YouTube

Hi everyone so let's take a look at an interesting comparison between two

products one the conventional and one the smarter one so savings bank accounts

versus liquid funds so let's do a like to like comparison between these two

products today so the number one parameter that we can look at is

obviously returns so the returns in a savings bank account would be around

3.5% for all major banks and for the liquid fund would range between you know

7.25 to 7.5% as of December 2018 so now the

interesting fact is while the percentage might not seem much to you, you would

notice that it is almost double of what you are earning right now and over a

longer period in time liquid funds can generate you more than double returns on

your liquid money that you usually park into a savings bank account so in fact

here is an illustration just take a look at how in a liquid find out performs a

savings account over a longer period in time and just notice the difference

between the corpus that is generated over a longer period in time point

number two let's talk about taxation in a savings bank account every interest

that is accrued on your savings account is subject to tax is subject to tax at

the rate of your personal tax rate irrespective of whether you redeem that

interest or not alternatively in a liquid fund there is no tax on accrued

income you are liable to pay tax only and only when you redeem the money and

you book a gain on your liquid funds again if you happen to by chance

keep your money into liquid funds for over three years the tax incidence is

much lower given the indexation benefit next a very important parameter that

would be liquidity so obviously your savings bank account offers the highest

amount of liquidity given you can withdraw your cash whenever required but

at the same time along with higher returns and a higher

post tax return specifically liquid funds is relatively lower liquid in

nature you would perhaps have to wait for a day before that amount comes back

into your savings bank account so a days lag is what it is in a liquid fund the

last obviously not a very prominent point but ala be it a very important one a

savings bank account can be hacked into and the funds in that can be

siphoned off by a cyber criminal but in a liquid fund what happens is all your

money is stored in the form of mutual fund units let's say even if someone

were to get a login access into your mutual fund account he or she cannot

redeem the money into any other account except you're registered bank account

that makes it hack safe for a to a certain degree which is pretty

comfortable so all in all these are the four prime reasons why one would choose

a liquid fund over a savings bank account obviously for liquidity it is

always suggestible to have some ready cash in your savings bank account

something that you will need on a day to day basis anything that you wouldn't

need for at least two days should be parked into a liquid fund and this is

the best way to optimize each and every penny of what you earn and what you save

so guys as I always say the best way to invest is through MyWay and the easiest

way to do it is just open up your MyWay app click on the top mutual fund

recommendations select liquid files and they will have a list of liquid funds to

select from and don't worry MyWay helps in advising and you choosing the best

liquid funds available so the best time to invest and save smartly is right now

and the best way to do it is through MyWay,

so guys learning and learning is a daily thing with my way but do not forget the more you know the more you'll

grow so guys don't forget to Like share and subscribe for more videos that will

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