Worried About Keeping Your Cash Surplus Safe? You Need This Solution | Fusion - WeRIndia

Worried About Keeping Your Cash Surplus Safe? You Need This Solution

Worried About Keeping Your Cash Surplus Safe? You Need This Solution

“The more your money works for you, the less you have to work for money.”

There are instances in your life when you end up with surplus cash in your hand. In life, as your responsibilities grow, your need for liquidity of money also increases. Though keeping a surplus of cash in your home can be a risky business. In such cases, like everyone else, you would stash your cash in the safety of a bank account.

Keeping your surplus cash in the bank will give minimum returns, when in fact you’re looking to grow your money. Wealth creation from the surplus cash acts beneficially during various emergencies. This is the reason there are alternative investment instruments, where you can park your money to earn higher returns than a savings bank account without compromising on liquidity. Mutual Funds is one of the best liquid funds through which you can keep your cash safe as well as helps in wealth creation.

Let’s dig into how mutual funds can prove to be the best financial instrument to keep your cash surplus safe:

  1. It is easy to Buy & Exit A Mutual Fund

Most people like you take a step back and have second thoughts about investing since you fear that you might lose the liquidity of cash in case of any emergency. There are investment options that lock in your money for some time.  Though, unless you choose close-ended mutual funds, buying and existing a mutual fund scheme is relatively more comfortable.

At any point (when the demand is high), you can sell your units. Keep an eye on surprises such as the exit charge or the penalty for pre-exit. Remember, after the fund house releases NAV that day, mutual fund transactions occur only once a day.

  1. Overall Risk is Optimized

We know that keeping cash in surplus at home is not safe. On the other hand, there is risk involved when you invest all that cash in any financial instrument. While investing, taking calculated risk always yields better results in the long run. This is where mutual funds stand out. The fund managers who invest your money always go for more than one asset class, like equities, debts and money market instruments to spread the risks. This is called diversification. This way, when one asset class doesn’t perform, the other can compensate with higher returns to avoid the loss for your surplus cash that’s invested.

  1. You Get Helped by a Professional Fund Manager

A mutual fund is preferred because you do not need to allocate work and resources yourself. A fund manager takes care of everything and decides what to do with your savings. They decide either to invest your money in debt or equity or both, and they decide how long to keep the money in that and when to take out.

So, this works as a security net for you when you don’t have prior knowledge about investments. Hence, along with keeping your cash safe, you get professional fund managers to help you with wealth creation too.

The bottom line is that instead of following the usual pattern of keeping your money saved in a bank account, invest in mutual funds for extra benefits and maximum returns. If you still have doubts, then you can consult a reputable financial advisor like FinEdge to help you make the right investment decision!

Image Credit:- Photo by Michael Longmire on Unsplash (Free for commercial use)

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