What is Savings+?

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.

Table of Contents

• Why Savings+ is an attractive investment option
• Liquidity and redemption
• Why choose Savings+?
• Who should invest in Savings+
• How to get started with Savings+?

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.

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.

Why choose Savings+?

Key benefits of the Savings+ facility include:

• Potential for better returns than savings account: The primary motivation for using Savings+ is the potential to earn relatively higher returns than the interest rate typically offered by traditional savings bank accounts.
• High liquidity: The underlying schemes – Bajaj Finserv Overnight Fund and Bajaj Finserv Liquid Fund – offer high liquidity. Both schemes also offer instant redemption of up to Rs. 50,000 or 90% of the funds, whichever is lower. This provides access to a capital quickly.
• Relative stability and lower risk: The funds available under Savings+ fall into the low/low-to-moderate risk categories. They invest in high-quality, very short-term debt instruments, which helps reduce interest rate risk and credit risk.
• Encouraging investment discipline: The facility is structured to help investors identify the surplus funds in their bank account. This automated or nudged approach may encourage investors to consistently transfer cash that would otherwise sit idle.
• Investment flexibility:Investors are not required to adhere to a fixed commitment like a Systematic Investment Plan (SIP). They may invest as much or as little as they wish, whenever they have surplus funds.

Who should invest in 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 get started with Savings+?

To get started with the Savings+ facility offered by Bajaj Finserv AMC, you would follow a process similar to opening any mutual fund investment.

Step-by-step guide to starting with savings+:

Step-by-step guide to starting with savings+:

1. Visit Bajaj Finserv AMC’s website. Log in, if you already have an account or sign up if you are a first-timer.
2. Ensure KYC compliance: Before making any mutual fund investment, you must ensure your Know Your Customer (KYC) process is complete and verified with KRA (KYC Registration Agency). If you have invested in mutual funds before, your KYC is likely already done. If your KYC is not complete, you will need to submit a few documents, including proof of identity (e.g., PAN card) and proof of address.
3. Select the scheme and option: Choose between the Bajaj Finserv Liquid Fund (which invests in instruments maturing up to 91 days) or the Bajaj Finserv Overnight Fund (which invests in instruments maturing in one day).
4. Determine the investment amount and mode: Since the facility is designed for surplus cash, you can choose to invest via a lumpsum investment.

FAQs

What is Savings+ by Bajaj Finserv AMC?

Savings+ is a facility that facilitates the transfer of surplus money in your bank savings account into the Bajaj Finserv Liquid Fund or the Bajaj Finserv Overnight Fund. It is not a fixed deposit or a bank savings account, but a mutual fund-related product offering idle funds a chance to earn better potential returns than a regular savings account.

How is Savings+ different from a regular savings account?

Unlike a regular bank savings account which offers a fixed interest rate and full deposit insurance, Savings+ invests in short-duration debt mutual funds where returns are not guaranteed. The underlying funds may offer better potential returns than typical savings account rates but carry market-linked risk. Returns are not guaranteed and may fluctuate based on market conditions.

Can I withdraw my money anytime from Savings+?

Yes, you have flexibility to withdraw funds at anytime and you can instantly redeem up to Rs. 50,000 or 90% of your corpus – whichever is lower – from the Bajaj Finserv Liquid Fund and the Bajaj Finserv Overnight Fund. However, for the balance amount, standard redemption timelines apply.

Who should invest in Savings+?

Savings+ may be suitable for investors who have surplus funds lying idle in a bank savings account and who want to potentially earn more than a savings rate while retaining relatively high liquidity. However, investors must be willing to accept some amount of risk because returns/capital stability is not guaranteed and depends on market movements.

Are there any tax benefits on Savings+ investments?

There are no specific extra tax benefits unique to Savings+. Potential capital gains from your investments are added to your annual income and taxed as per your prevailing tax slab.

What is the minimum investment amount in Savings+?

The minimum investment amount in Savings+ is ₹100. This makes it accessible for small amounts of surplus funds.

Is Savings+ suitable for conservative investors?

It may be suitable for investors seeking limited volatility compared to long-duration debt or equity funds, because the underlying funds invest in short-maturity, high-quality instruments. However, returns are not guaranteed and some risk remains.

Can I link my bank account to Savings+ easily?

Yes, the investment process allows you to link your existing bank account to the Savings+ facility. The process is online and streamlined.

What are the risks involved in investing in Savings+?

The primary risks are the standard mutual fund risks: Credit risk (risk of issuer default) interest rate risk (risk of a drop in the value of fixed income securities because of rising interest rates), and liquidity risk (risk of being unable to exit at a fair price). The umbrella risk is that returns are market-linked and NAV can fall, meaning capital protection or returns are not guaranteed. However, because of the high credit quality and the low duration of these instruments, several of these risks are potentially mitigated, resulting in relatively low/low-to-moderate 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.