Savings+ by Bajaj Finserv Asset Management Ltd is a unique investment solution that helps investors combine relative stability with the potential for reasonable returns. It enables investors to seamlessly invest the surplus funds lying idle in their bank accounts into the Bajaj Finserv Liquid Fund or Bajaj Finserv Overnight Fund.
Both are low-risk fixed-income funds with a very short maturity period and the potential to offer returns higher than what a savings account typically offers. Savings+ thus seeks to bridge the gap between saving and investing.
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Why Savings+ is an attractive investment option
Through Savings+, investors can potentially earn higher returns on their idle money than they typically would in their savings account. The money is invested in funds, which has a portfolio comprising money market securities with a maturity of one day, and liquid funds, which invest in fixed-income securities with a maturity of up to 91 days.
These mutual funds are relatively stable because of the high quality of underlying securities and low maturity. They also have better return potential than savings accounts. For instance, liquid funds generated an average one-year return of 7.16%* as on May 17, 2024, as compared to the 3%-4% fixed returns in savings accounts of most major banks. However, savings accounts are virtually risk-free and offer guaranteed returns, whereas the returns on liquid and overnight funds depend on market performance.
*Past performance does not guarantee future returns. Past performance may or may not be sustained in future.
Savings+ thus helps conservative investors combine the benefits of both avenues by choosing how much or little to invest in the money market.
Investors can link their bank account to Savings+ to see their surplus funds and choose how much to invest. They can also invest additional funds whenever they wish to – they do not need to adhere to a fixed schedule or invest in a fixed amount every month.
How to Use Savings+ to Build Emergency Funds
Visit Savings+ on www.bajajamc.com. Then, follow these steps to create a rainy-day corpus:
- Get started: Link your bank account to Savings+. The portal will display your savings account balance and surplus funds available for investment.
- Choose a fund: Once registered, you can decide how much to invest and when and in which fund, based on your finances and goals.
Liquidity and redemption
A significant advantage of Savings+ is its high liquidity. Savings+ offers instant redemption of up to 90% of your investments, or Rs 50,000 – whichever is lower. The balance amount is credited to your bank account in one business day, if redeemed.
Who should consider Savings+?
Savings+ is a suitable investment option for a wide range of individuals, especially those seeking to balance relative stability with reasonable return potential. It can be considered by conservative investors, those just starting on their financial journey, or anyone looking to build an emergency fund through a relatively stable investment avenue with modest return potential.
How to invest in Savings+
You can invest or explore the facility on the Savings+ page on www.bajajamc.com and provide your bank account details. Once your account is linked, you are shown your surplus amount. You can then decide how much to invest in the Bajaj Finserv Overnight Fund or the Bajaj Finserv Liquid Fund. The minimum investment amount is just Rs 100.
So, you can park all your surplus funds, or just a portion, to see how it can potentially grow. Investors have the flexibility to decide how much and when they want to invest. So, they can alter their investment amount as per their expenses. There is no fixed SIP amount that you must set aside every month. However, a monthly reminder is sent to investors encouraging disciplined investing.
Using Savings+ for Short-Term Goals
Here are some reasons why Savings+ is suitable for short-term goals.
- Investing convenience: Savings+ makes it easy to identify and invest surplus funds from your bank account to select mutual fund schemes. You can make the transfers through a 100% digital process from a mobile phone or desktop.
- Relatively stable avenue: Both Bajaj Finserv Overnight Fund and Bajaj Finserv Liquid Fund invest in high quality and short-term papers. This mitigates credit risk and interest rate risk, making these relatively low-risk/low to moderate risk funds. Moreover, the return potential is better than that offered by most savings accounts.
- Flexibility: You do not need to start an SIP or commit to investing a certain amount every month. You can invest as much as you want, whenever you have surplus funds.
- Encourages discipline: Investors are sent reminders to encourage consistent investing.
- Liquidity: The Bajaj Finserv Overnight Fund and Bajaj Finserv Liquid Fund allow instant withdrawal of up to 90% of your funds or Rs. 50,000 (whichever is lower). The balance amount, if redeemed, is credited to your bank account in one business day.
FAQs
What is Savings+?
Savings+ is an investment solution that enables investors to park their surplus funds in Bajaj Finserv Liquid Fund and Bajaj Finserv Overnight Fund. These mutual funds offer superior return potential as compared to savings accounts.
What is a liquid fund?
It is a type of mutual fund that invests in short-term securities, like treasury bills (T-Bills) and money market funds, that have a maturity of up to 91 days.
What is an overnight fund?
It is a type of debt mutual fund that invests in overnight debt securities.
Who should invest in savings+?
Saving+ is a suitable option for investors who want to deploy their surplus funds in low-risk mutual funds instead of leaving it idle in their savings account. It offers higher return potential than bank accounts along with high liquidity and relative stability.
Is Savings+ risk-free?
Savings+ is not risk free. Returns depend on market conditions. Standard risk factors affecting debt mutual funds, such as interest rate risk and credit risk, apply to Savings+ investments as well. However, the low duration of the portfolio mitigates these risks to a significant extent.
What is the difference between Savings+ and a savings account?
Savings+ is not an account but a facility through which you can invest money from your bank savings account into the Bajaj Finserv Overnight Fund or Bajaj Finserv Liquid Fund. These avenues have the potential to offer better returns than traditional bank savings accounts. However, unlike savings accounts, the returns are not fixed or guaranteed and depend on market conditions.
Where does Savings+ invest my money?
The Savings+ facility is available for Bajaj Finserv Overnight Fund or Bajaj Finserv Liquid Fund.
For detailed scheme-related information, visit the following links:
What are the main benefits of using Savings+ for short-term goals?
Savings+ enables you to put surplus funds into Bajaj Finserv Overnight Fund and Bajaj Finserv Liquid Fund. Both are relatively low-risk/low to moderate risk debt mutual funds that can potentially provide higher returns than regular savings accounts while also maintaining liquidity. This makes Savings+ suitable for short-term goals.
How can I optimise my investments with Savings+?
To optimise your investments, invest consistently and regularly, top up your investments when you have extra funds when available and avoid making unnecessary withdrawals.
Is Savings+ suitable for both short-term and long-term financial strategies?
Savings+ can be suitable for short-term goals because it offers modest return potential, liquidity and relative stability of capital invested. Longer term investments may benefit more from equities, hybrid funds and other investment avenues that offer inflation-beating return potential and long-term capital appreciation.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
This document should not be treated as endorsement of the views/opinions or as investment advice. This document should not be construed as a research report or a recommendation to buy or sell any security. This document is for information purpose only and should not be construed as a promise on minimum returns or safeguard of capital. This document alone is not sufficient and should not be used for the development or implementation of an investment strategy. The recipient should note and understand that the information provided above may not contain all the material aspects relevant for making an investment decision. Investors are advised to consult their own investment advisor before making any investment decision in light of their risk appetite, investment goals and horizon. This information is subject to change without any prior notice.
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