Earn More on Idle Cash: Invest in Liquid and Overnight Funds

Most of us keep money sitting idle in our savings bank accounts, enjoying the convenience of easy access for paying utility bills, credit card bills, and other expenses via debit card or cheque. However, this practice comes with a hidden cost. Savings accounts typically offer interest rates of 3.50-4%, which often fail to keep up with inflation. Consequently, while these accounts provide the advantage of “anytime money,” the funds within them are not working as efficiently as they could be.

An alternative to consider is money market mutual funds, such as liquid funds and overnight funds, which offer a balance of convenience, liquidity, and safety, along with significantly higher returns compared to traditional savings accounts.

Liquid funds, for instance, primarily invest in short-term money market instruments like treasury bills, certificates of deposit, and commercial papers that mature within 91 days. This strategy aims to offer investors the potential for better returns on their short-term deposits without compromising on accessibility or security. By redirecting funds that are not needed immediately into these financial instruments, you can make your money work harder for you while still retaining the ability to access it when necessary.