Is it good to invest Rs 5,000-Rs 10,000 idle cash in short term liquid funds that can be withdrawn anytime, and also fetch some income?
Mayur Hajela, Ghaziabad
The strategy to invest surplus cash in liquid funds is a good move compared to it being retained in a savings bank account. But, you need to keep in mind that you need to be KYC compliant to be able to put your money in liquid funds. To encourage liquid funds as an alternate to bank savings account, several AMCs have come up with apps and simple tools that allow you to transfer idle cash from your bank to these funds, which could also be redeemed as convenient, without the hassles of filling redemption forms and so on. Yes, make use of the idle cash in liquid funds than earn nothing from them in real terms.
