Smart deposits (i.e) liquid mutual funds are preferred by many investors to help reach their short-term goals. They are often considered to be an alternative to bank savings accounts.
We have compiled a list of situations where you can use smart deposits to invest your money.
What Are Smart Deposits?
Smart deposits are liquid mutual funds, which invest in extremely short-term fixed instruments with a maturity period of 91 days.
The instruments they invest in include Treasury Bills (T-bills), Commercial Paper (CP), Certificates Of Deposit (CD), and Collateralized Lending and borrowing Obligations (CBLO).
Fund managers invest in these instruments to generate optimal returns while maintaining safety and high liquidity.
We have written a detailed blog on Smart Deposits and why you should be investing in them. Please read it to get a complete understanding of the topic.
When Should You Invest In Smart Deposits?
We have compiled a list of situations where you can invest your money in Smart Deposits.
Bonus Money
When you receive a bonus from your company, it is good to put that money in Smart Deposits. Instead of spending this amount, you can put it in Smart Deposits, as the latter will offer you a higher interest rate than the banks and you can withdraw it without any hassle.
Gift Money
As Indians, we receive money as gifts from our elders on special occasions. We receive cash from our elders on our birthdays, weddings, or any other special occasion.
This money should be put in Smart Deposits and you will be able to save a significant amount of money in a few birthdays.
Fixed Deposits
Let’s accept the fact that Indians really love fixed deposits. We like putting our money in traditional instruments like fixed deposits and recurring deposits, as they are considered to be completely risk-free. There is nothing wrong with putting your money in FDs and RDs.
However, once they mature, it is a good idea to invest the maturity amount in Smart Deposits, as the latter will give you higher returns than a bank account. Also, you can stay invested in Smart Deposits for a long period of time.
Awards Or Inheritance
If you receive awards or get any prize money, you can put that in Smart Deposits too. It is a good idea to not spend this money on any impulse purchases.
Since you received this amount suddenly and don’t have a plan for it yet, you can put it in Smart Deposits so that your money will be safe and will continue to make more money for you in the long term.
If you inherited any money from your parents or relatives, you can put some portion of it in Smart Deposits.
Apart from earning higher returns on your inheritance money, you can also withdraw them whenever you want and wherever you want.
Unlike FDs, Smart Deposits do not offer any penalty when redeeming them before 5 years.
Piggy Bank Cash
We have been taught to save money in our small piggy banks ever since we were kids.
Some continue that habit well into adulthood and if you are someone like that who has been saving in your piggy banks for a while, it is time to transfer that cash from the piggy bank to Smart Deposits.
Unlike piggy banks, Smart Deposits will offer you interest for your idle cash.
In The End…
There is never an excuse to not invest in smart investment options. Smart Deposits are truly smart in helping you earn higher returns and achieve your goals.
If you are looking to invest in Smart Deposits, you should visit Koshex right away and create an account with our platform. With Koshex, you can invest in Smart Deposits in just a few clicks. Create an account today!
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