Strategic investing: How Savings+ can help raise your investment game

Savings Plus
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You may be a risk-averse investor, only setting aside money in your savings account, public provident fund or fixed/recurring deposits. You may be an aggressive investor, big on equity. Or, you may be a balanced investor, with a mix or debt and equity in your portfolio, or a conservative one, who leans heavily towards fixed-income funds.

Savings +, a Bajaj Finserv Asset Management Limited offering, can potentially help all these categories of investors to add earning savings plus potential, stability, or diversity to their investment portfolio.

Through Savings+, investors can keep track of their idle funds – money that typically remains in their savings account – and put it into the Bajaj Finserv Overnight Fund or the Bajaj Finserv Liquid Fund.

These fixed-income fund categories offer high liquidity and the potential to earn reasonable returns. They have historically* offered higher returns than most savings accounts.

*Past performance may or may not sustain in the future.

Read on to find out more about the potential ways in which Savings+ can help elevate investment strategies.

  • Table of contents
  1. Strategic investing with Savings+
  2. How Savings+ can raise your investment game
  3. Factors to consider when using Savings+
  4. FAQs

Strategic investing with Savings+

Overnight funds are debt mutual funds that invest in fixed-income securities with a maturity of one business day. Liquid funds, meanwhile, invest in fixed-income securities with a maturity of 91 days. These include commercial papers, certificates of deposit and treasury bills.

Savings+ helps investors potentially earn higher returns on their idle funds by investing them in these low-to-moderate risk and highly liquid mutual funds.

You can invest or explore the facility on the Savings+ page on www.bajajamc.com and link your bank account. Once your account balance is displayed, you can decide how much to invest in the Bajaj Finserv Overnight Fund or the Bajaj Finserv Liquid Fund.

Savings+ offers you the flexibility to invest and whenever you wish to and whatever amount suits you – there is no fixed investment schedule and the minimum amount is Rs. 100. However, you are sent reminders to encourage disciplined investing.

Savings+ also offers instant redemption of up to 90% of your funds, or Rs 50,000, whichever is lesser. The balance amount, if redeemed, will take one business day to be released to your account.

How Savings+ can raise your investment game

Whatever your current saving or investment strategy is, you can consider Savings+ as a way to diversify your portfolio. The liquidity and insta redemption facility can make Savings+ a suitable way to maintain a corpus for emergencies, unplanned expenses or months when you need extra funds. It can also potentially be used to save money for short-term goals

Here are some ways in which the facility can benefit different kinds of investors:

Risk-averse investors: Liquid and overnight funds are linked to market performance, unlike savings accounts, where returns are fixed and capital preservation is near-certain. However, they are not as volatile as equity and relatively safe among fixed-income instruments too, owing to their low duration, the high rating of the underlying securities and high liquidity.

Since investors don’t have to commit to an investment amount or frequency, conservative investors can set aside a small amount of idle funds to assess the return potential.

For the aggressive investor: Investors drawn to the growth potential of equity or high-yielding fixed-income securities can benefit from a stable investment vehicle with modest return potential but a relatively low risk. Savings+ can be useful for building an emergency corpus or to invest money towards a short-term goal.

Such investors can seek to benefit from a higher return potential than savings accounts as well as the relative stability required for very short-term financial goals and emergency funds. Fixed-income instruments are important for portfolio diversification, and Savings+ can enhance the convenience and flexibility of investing in such funds.

For the balanced investor: The investor who understands the need for diversification can benefit from the accessibility and investing convenience offered by Savings+. This facility can be a way to supplement your portfolio and add an extra layer of liquidity and potential stability to it, especially for unplanned expenses and emergency needs.

Factors to consider when using Savings+

To get the most out of your investments, Savings+ may be considered as a part of a diversified portfolio that also has other mutual fund with more growth or income-generation potential and are better suited to long-and mid-term investment goals.

Also, even though there is no SIP, investors should try to maintain a regular investment schedule and redeem funds only when necessary or after reaching the financial goal.

FAQs

What is the difference between strategic investing and traditional investing?
Traditional investors typically set aside money only in instruments such as savings accounts, fixed deposits, recurring deposits and public provident funds that are considered to be virtually risk-free and offering guaranteed returns. Strategic investing is about finding a way to accumulate wealth and capital protection over the long term by trying out avenues with higher return potential. It also involves assessing your financial goals, investment horizon and risk levels to decide what avenue is right for you.

How can Savings+ help me achieve my investment goals?
Savings+ can be seen as a supplement to savings accounts that seeks to combine savings plus a higher return potential. It is useful for building an emergency corpus or to park surplus funds in a place where they remain accessible but still potentially earn reasonable returns. Savings+ makes it easier for investors to access such avenues by giving them reminders and allowing flexible investing. However, unlike a regular savings account, Savings+ does not guarantee fixed returns.

Is Savings+ suitable for all types of investors, regardless of their risk tolerance?
Like any mutual fund scheme, Savings+ is subject to market risk. So, it may not suit individuals with zero risk tolerance. Such a facility may be best suited to those who can take low or moderate risk. Even those with a high risk-appetite may benefit from using low-duration fixed-income instruments for short-term requirements and emergency funds.

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.