We are bringing up the age-old, ubiquitous question that troubles every income receiver: how to save the salary and protect capital? The traditional savings method can potentially help you build capital. But, are there any other approaches to saving your salary? As we move forward and rethink savings solutions, the mutual fund industry quietly grows, providing various effective solutions for saving your salary. The mutual fund classes like liquid fund and overnight fund then can become the trailblazers when it comes to stashing away the extra cash.

Liquid, low-duration, and overnight funds: salary savings options?

Investors ideally prefer an investment solution that offers a reliable way to park surplus cash and also potentially generate some returns. Fortunately, these funds can offer these benefits. Some even more attractive abilities of these funds include encouraging potential capital protection and liquidity benefits to investors. They facilitate an easy withdrawal process, encouraging a convenient transaction.

Liquid funds

Liquid funds can save your salary effectively. These are types of open-ended debt mutual funds that invest in low-risk, short-term market instruments like government bonds, Treasury bills, commercial bills, etc. They have maturities up to 91 days. They are highly liquid, facilitate an easy withdrawal process, and can be suitable for short-term investment goals.

Overnight funds

Overnight funds invest in overnight securities like overnight reverse repos and other debt securities with maturity periods of 1 day. The fund manager purchases the bonds during the trading hours and sells them the next day upon maturity. They use these profits to buy more overnight bonds, thus repeating this cycle. This one-day maturity period can facilitate easy withdrawal. They may have zero interest rate risk and minimum credit risk due to investing in less risky debt instruments.

Low-duration funds

Low-duration funds can also be a good choice for saving your salary. These funds fall into the same category as liquid funds and overnight funds. These debt fund types enjoy high liquidity characteristics with a maturity duration of 6–12 months. These short-term debt securities can provide potential security against market volatility but are subject to changing interest rates.

Active Savings App: a salary-saving solution

Are you in a dilemma regarding choosing which mutual fund type is suitable for short-term savings? We have the answer! You can enjoy the collective benefits of these three funds by investing your salary in our Active Savings App. With this app, saving your salary has just become easier.

The aim of these debt funds is to provide liquidity and reduce the overall risk by investing in less risky debt securities. Our app blends this power, offering a suitable way to save your salary. Investors must remember that these funds aim for potential capital protection due to their intrinsic debt fund characteristics. Therefore, investing a portion of your salary through our Active Savings App can potentially protect the capital and earn some interest.

The Active Savings App offers a seamless user experience.

• One-time registration through a PAN number

• Easy bank account integration

• Effortless transfer of money from your bank account to the app

• Instant withdrawal facility

Conclusion

Saving your salary can be the stepping stone to creating better financial discipline. While building capital wealth is important, capital protection also requires equal attention. Our Active Savings App follows this principle and aim to combine the power of these three funds to offer a suitable savings solution to investors. So, investors can park their salaries and let their surplus cash potentially earn interest while they focus on other things.

Aditya Birla Sun Life AMC Limited/Aditya Birla Sun Life Mutual Fund is not guaranteeing/offering/communicating any indicative yield/returns on investments.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.