Where is your money invested in Savings+?

Despite their growing popularity, there are still many who are wary of investing in mutual funds, believing them to be highly risky or only suitable for those who are well-versed in the financial markets.

Savings+ by Bajaj Finserv Asset Management Ltd seeks to bridge this gap by encouraging investors to put an amount of their choosing in Bajaj Finserv Liquid Fund and Bajaj Finserv Overnight Fund. Both are highly liquid debt mutual funds carrying relatively lower risk. By spreading money between their savings accounts and these mutual funds, conservative investors can combine the relative stability of savings plus the superior return potential of mutual funds.

This article tells you more about how Savings+ works and the mutual fund schemes it invests in.

Table of contents

What is Savings+
Liquid funds
Overnight funds

Savings+

Savings+ is a new facility by Bajaj Finserv Asset Management Ltd that offers investors a convenient way to potentially earn modest returns on their surplus funds. This is the money that remains in your savings accounts after bills and other expenses have been paid. Instead of leaving these funds idle in a savings account, where interest rates are approximately 3% for most leading banks, you can use Savings+ to invest the money in Bajaj Finserv’s Overnight Fund or Liquid Fund.

Both these offer better potential returns than savings accounts. They are also low-to-moderate risk investment avenues as they invest in highly rated fixed-income securities with a short maturity. However, returns are not guaranteed and can fluctuate based on market conditions.

Savings+ also offers instant redemption facility of up to Rs 50,000 or 90% of your investments, whichever is lesser.

To invest, you can visit the Savings+ page on www.bajajamc.com and link your bank account. The portal will display your current account balance and the amount of surplus money you typically have in your account. Based on this information, you can decide how much to invest. The minimum investment amount is Rs 100. You can choose to park all or just some of your surplus funds in Bajaj Finserv Liquid Fund or Bajaj Finserv Overnight Fund.

Also, you are free to invest whenever you like – there is no monthly schedule or mandatory instalment.

Liquid Funds

Liquid mutual funds are a type of debt mutual fund that invests in short-term money market instruments such as Treasury bills, commercial paper and certificates of deposit with maturity upto 91 days.

They offer high liquidity and better return potential than a traditional savings account. They also carry lower risk than equity funds and long-duration debt funds.
Such funds mitigate credit risk possibility by investing in high-quality, highly rated securities. Credit risk refers to the possibility or probability that a borrower will not repay the money they owe.

Additionally, the short maturity of the debt securities reduces the fund's sensitivity to interest rate changes. Thereby, it mitigates interest rate risk, which is the possibility that an increase in interest rates will result in a drop in the value of debt securities.
This can make such funds suitable for investors seeking a relatively stable avenue with modest return potential and easy accessibility.

Overnight Funds

Overnight mutual funds are debt mutual funds that invest in overnight securities such as TREPS, reverse repos and treasury bills and other government securities with a maturity of one day.

Since the securities mature in one day, the interest rate risk is minimal. Additionally, credit risk is mitigated by investing in high-quality securities. The short maturity also allows high liquidity. Such funds can be suitable for institutional investors who want to park surplus funds overnight or investors with idle funds who seek better return potential than that offered by savings accounts.

Conclusion

Savings+ by Bajaj Finserv Asset Management Ltd helps investors generate better potential returns on the idle funds in their savings accounts by investing the surplus into the Bajaj Finserv Overnight Fund or the Bajaj Finserv Liquid Fund. The liquidity and relative stability of these funds make them a suitable investment avenue for risk-averse investors or those looking to build an emergency cash reserve. It can also be suitable for short-term investments.

FAQs

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:

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.