Liquid funds importance


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Liquid funds importance

  1. 1. INFLATIONRISING INFLATION...Inflation meansrising prices of allthe items, whichwe consume inday to day life..
  2. 2. What is the average inflation ratein India in last 5 years?A.B.C.D.5%7%8%10%INFLATIONA.B.C.D.5%7%8%10%INFLATION
  3. 3. What is the average inflation ratein India in last 5 years?A.B.C.D.5%7%8%10%INFLATIONA.B.C.D.5%7%8%10%INFLATION
  4. 4. INFLATIONHow many of you have SavingsAccount / Current Account in bank?What is the rate of interest inSavings Account/Current Account?
  5. 5. But What is Net Returns?Net return = Interest – InflationSavings Account = 4% - 8% = -4%Current Account = 0% - 8% = -8%
  6. 6. How to Beat Negative Returns?Invest in bank FD, Equities, real estate, gold etc.?But money lying in SB/CA is for daily use and not forinvestmentAlso, there is a risk in investing in equities and gold &charges on bank FDWhat needs to be done then?
  7. 7. Is There Any Alternative ?Should be able to generate returns close to/better than inflationShould have low chargesShould have least risk as compared to other productsShould be easy to transact (to deposit and withdraw money)An alternative to SB/CA should have following qualities
  8. 8. An alternative o SB/CA should have following qualitiesIntroducingLiquid Funds
  9. 9. What is a Liquid fund?Liquid Funds are mutual fund schemes, which invest invery short term commercial papers (CP), Certificate ofDeposits (CD), Treasury bills etc.There are no entry/exit charges.Can invest as low as Rs. 10,000.Minimum investment period is 1 day.Liquid Funds DO NOT invest in Equity Markets or Gold.Highly liquid, money is credited back to your bankaccount in 1 day.
  10. 10. Performance of Liquid FundsLiquid funds have been delivering more than 8% returns toinvestors.In comparison, SB returns are 4% while Current Account offers0% return.With such a high return differential selling liquid funds becomefar more easier to retail investors.Scheme Name 1 Year8.68 9.33 8.64 8.7510.21 10.63 9.56 9.668.37 9.06 8.34 8.4830  Days 90  Days 180  DaysBirla Sun Life Cash Manager - GrowthKotak Flexi Debt Scheme Plan A - GrowthDSP BlackRock Money Manager Fund GrReturns on lumpsum investment as on 31 May 2013Returns on CAGR basis
  11. 11. What Extra with Liquid?Income Earned in 1 Year Additional Income50,000 2,000 0 4,000 2,000 4,000100,000 4,000 0 8,000 4,000 8,000500,000 20,000 0 40,000 20,000 40,000* Assuming returns of Savings Bank A/c at 4%, Current A/c at 0% and liquid funds at 8%AverageBalanceSavingsAccountCurrentAccountLiquidFundsSavingsAccountCurrentAccountMutual fund investments are subject to market risks. Past performance is no guarantee of future returns.
  12. 12. Is it Safe to Invest ?You invest in MF schemes which are under the purviewof SEBI.Only 44 companies in India in MF space.Renowned companies like HDFC, Reliance, Kotak,Birla, DSP, ICICI, Tata etc. in the MF business.MF RegulationsLiquid FundsMoney invested in very short term instruments.Extremely low/negligible interest rate risk.Transparency of NAV and returns.
  13. 13. What are the Charges in Liquid Funds?There are no charges for entry/exit in liquid funds.There is a fund management charge in the scheme,which can vary from 0.50% to 0.75% depending fromscheme to scheme.The returns highlighted in the performance earlier arenet of charges to the investor.
  14. 14. Can I Invest Even for 1 Day ?Yes you can.You will get return even for 1 day.Also, minimum amount of investment also starts from aslow as Rs. 10,000!Liquid funds are for everybody and not just for the wealthy.
  15. 15. TaxabilityReturns from liquid funds are taxable as follows:Short Term Capital Gain (STCG)For investments of less than 1 year, the income is taxableaccording to the tax slab of the investor.Long Term Capital Gain (LTCG)For investments of 1 year and above, the income is taxable at10% flat or 20% with indexation .It is advisable to invest in the Growth option, unless you fall in the highest tax bracket.For Growth OptionFor Dividend OptionIn case you invest in Dividend option, there is a DividendDistribution Tax at 28%
  16. 16. Money Lying idle in your SB/CA on the following countsWhich Money Should be Invested in Liquid Funds?Your EMI is due on 25thof the month& you maintain the balance for thesame for the whole month.School fees of your kids is due on aquarterly/half yearly basis, but youkeep it in your account.Your salary gets credited on3rdof the month & youwithdraw money over the period ofthe month.If you are a businessman & have acash balance in your lean season.
  17. 17. Money Lying idle in your SB/CA on following countsWhich Money Should be Invested in Liquid Funds ?If you recieve a bulk payment andare not having any fresh purchaselined up in coming 3-4 days.You sold a property and got thepayment for it in your account.You are about to buy a property &payment is due after 5-10 days.Any additional balance lying inyour account above the minimumbalance required in the bank.
  18. 18. How to Invest in Liquid Funds?Investing in liquid funds is easy. You can invest through NJ TADAOnline Mobile Call & Transact
  19. 19. Fast & accurate way oftransactionTransaction from anywhere(Online & on call)
  20. 20. Payment throughregistered VISA debitcard - any bank8 largest banksavailable throughnet banking.
  21. 21. Saves time & effortsTransactionconfirmation viae-mail / SMS @
  22. 22. Invest Easy - Convenience at your FingertipsOnline PurchaseLogin to your NJ Trading AccountSelect the fundMake Payment through net banking/debit cardYour investment is completed in less thana minuteOnline SellLogin to your NJ Trading AccountSelect the fund to redeemYour transaction is completed in less thana minuteMoney gets credited to your bank accountthe next day
  23. 23. Invest Easy – Convenience at your FingertipsMobile Application (Blackberry, Android, ios)TransactionRedeem & SwitchPurchase, SIP, STPMode of Payment -Pre registered ECS mandateBenefitsAccess anywhere24*7High Speed
  24. 24. Invest Easy – Convenience at your FingertipsCall N Transact – 0261 3987500How to TransactCall on the CNT number.Confirm your access details.Execute your transaction(Purchase/Sales/Switch) inless than a minute!
  25. 25. “Invest Easy” – Convenience at your fingertipsGreat Convenience of Transaction.Access anywhere24*7Multiple channels of transaction(Online, Mobile, Call Center)Multiple modes of payments(Net banking, Debit Card, ECS Mandate)High speed & accuracyNO form fillingTransaction conformation on SMS/E-mail
  26. 26. What to Do Now ?Contact your Financial AdvisorOpen your NJ Trading & Demat AccountStart enjoying benefits of Liquid Funds !!
  27. 27. Be a smart investor. Let your money make money for you!
  28. 28. Contact yourFinancial AdvisorTo change the way you invest