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If you have any extra cash lying idle in your bank account, make sure you are using it smartly. Let’s take a look at some smart ways through which you can put your extra cash to work.
To park your funds for any short-term goals, you can go with liquid funds, recurring deposits, or sweep-in fixed deposits that can help you earn without blocking money for too long.
Liquid funds invest in short-term debt and are easy to redeem. With decent returns and lower risk, this is a good option for those who want to invest money for a short time period.
A sweep-in FD links to your savings account, automatically moving excess funds to earn higher interest in a fixed deposit.
For guaranteed returns over the long run, you can consider small savings schemes like Post Office MIS, National Savings Certificates, RBI Floating Rate Bonds, etc.
The Post Office Monthly Income Scheme (MIS) offers stable returns and is a desirable option for those in need of safe investment options backed by the government.
NSC offers fixed, guaranteed returns with tax benefits. For tax-free maturity and retirement fund building, you can opt for the Public Provident Fund (PPF).
These bonds are government-backed with variable interest rates that are revised every six months. They are risk-free with competitive returns.
For those who have low risk capacity, these bonds generally offer better returns as compared to traditional bank deposits.
If you wish to invest in low-risk mutual funds, debt and hybrid funds, equity saving funds, or arbitrage funds offer modest returns.
If you have high risk capacity, equity mutual funds are the way to go. With higher returns, diversified equity MFs could be the right choice for long-term wealth building.
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