Understanding Savings+: Make the most of your idle savings

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Savings+ is a unique investment facility offered by Bajaj Finserv AMC that allows you to put your idle savings to work. Through this option, you can invest directly from your bank account into relatively stable low-duration debt funds with the aim of earning potentially higher returns than a regular savings account.

While traditional savings accounts offer limited returns, the overnight and liquid funds available via Savings+ have the potential to deliver comparatively better returns with only slightly higher associated risk.

Therefore, considering the potential upside, it makes sense to understand how Savings+ works and what strategies you can adopt to maximise its benefits. Read on to learn more about Saving Plus tips and strategies.

  • Table of contents
  1. How does Savings+ investment work?
  2. Benefits of the Savings+ platform
  3. Strategies to maximise Savings+ return potential
  4. Diversify overall investment portfolio
  5. FAQs

How does Savings+ investment work?

The process of getting started with Savings+ is simple.

  • First, log onto the dedicated section at www.bajajamc.com and link your bank account.
  • Choose to invest a suitable amount from your surplus funds into either the Bajaj Finserv Overnight Fund or Bajaj Finserv Liquid Fund.
  • Both options invest in low-risk debt securities like TREPS, commercial paper, certificates of deposit, and treasury bills.
  • While there are no fixed investment mandates, the portal sends regular reminders encouraging regular contributions.
  • Once the money is transferred, it remains within the chosen scheme until you redeem it.
  • Up to 90% of holdings or Rs.50,000, whichever is lower, can be instantly redeemed.

Benefits of the Savings+ platform

  • Potential for higher returns than savings accounts due to market-linked returns from debt investments. However, unlike savings accounts, returns from Savings+ are not guaranteed.
  • Liquidity to access invested amounts whenever required. Instant partial redemptions offer added convenience.
  • Reminders nudge disciplined investing of idle balances without rigid mandates locking you in. Flexibility to invest opportunistically.
  • Suitable for parking short-term funds towards upcoming goals like expenditures, vacations, or other current liabilities.
  • Relatively low-risk profile from underlying holdings like TREPS, commercial paper maintains less volatility on capital invested better than longer duration debt options.

Strategies to maximize Savings+ return potential

With the general advantages clear, here are some specific tactics to boost your investment outcomes with Savings+:

  • Start systematic contributions: Set up monthly transfers of a fixed amount you can comfortably invest. This cultivates healthy financial habits for consistent wealth growth.
  • Reinvest intermittent lump sums: Beyond regular sums, look for extra funds from tax refunds, bonuses, or other windfalls to supplement your portfolio periodically. Larger investments harness the power of compounding to accelerate wealth creation.
  • Intensify during fortuitous times: When extra liquidity arises, assess market conditions, and increase investments if opportunities look promising. Tactical timing allows capturing yields during favorable macroeconomic backdrops.
  • Allocate idle emergency reserves: Instead of leaving funds idle in savings accounts, earmark a comfortable floating corpus through disciplined Savings+ monthly savings. This creates a liquid net with more earning potential more than a traditional bank account.

Diversify overall investment portfolio

While Savings+ suits short-to-medium goals, one must always maintain appropriate asset allocation via diverse instruments. A balanced approach mitigates undue exposure while capturing varied class-wise returns and tax treatment benefits.

Conclusion
Savings+ offers Indian investors an accessible route to build targeted, liquid reserves while still potentially outperforming redundant cash holdings. Consistency and investment decisions aligned with one’s life stages can optimize the opportunity to boost long-term wealth creation via Savings+ using otherwise dormant balances. However, investors must always consult a financial advisor before making any investment decisions.

FAQs:

What is the process to redeem money from my Savings+ investments?
To redeem invested amounts via Savings+, you can choose to redeem up to 90% of your holdings or Rs. 50,000 whichever is lower instantly online. The redeemed amount will be credited back to your linked bank account on the same day. Any redemption request over this instant redemption limit will be processed the next business day.

Are the returns on Savings+ investments taxable?
Yes, any returns generated on the mutual fund investments made via the Savings+ platform are taxable as per your income tax slab.

Are liquid funds risky?
Since they invest in securities with short maturities, usually less than 91 days, liquid funds carry relatively lower interest rate risk compared to longer duration debt funds. However, liquid funds still carry some credit risk as the underlying instruments are subject to default, though the high quality of issuers can help mitigate this risk.

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.