Articles
Liquid Mutual Funds vs Savings Accounts: Which is a Better Option
by Dhanuja N. Mutual Funds ExpertA savings account is a place where we can keep our money safely and withdraw it as and when we like with the help of a cheque or card. One of the most beneficial advantages of a savings account is that it gives account holders a certain amount of interest for keeping their money in the bank. Therefore it is quite preferable for the account holders to keep their money safely and at the same time earn a certain amount of interest.
Liquid mutual funds on the other hand are considered to be mutual funds that are subject to low risk. Liquid Mutual funds usually do not invest in stocks and especially high-risk stocks and for that very reason, the risk associated with them is low. But even then, they are prone to certain risks. These risks involve the change in interest rate and credit risk in the investments.
If we want to compare liquid Mutual funds and savings accounts, we need to keep in mind many things:
Risk factor: The risk factor associated with savings accounts is almost equal to none but in the case of liquid mutual funds, it does have some level of risk involved.
Money withdrawal: When we withdraw money from a savings account, we receive it immediately but when we do so from liquid funds, we receive it only within a day or two.
Minimum balance: When we want to keep money in a savings account, it requires a minimum amount of balance but that is not so in the case of liquid funds.
Bank's involvement: In the case of liquid mutual funds, there is no involvement of banks to transact or get cash but in terms of savings account, banks involvement is necessary.
Main aim: While choosing liquid funds and savings accounts, one must be clear about their aim. Because one must choose liquid mutual funds only when they wish to receive a higher return value as compared to a savings account but if someone wishes to keep their money safely in the bank then they must definitely go for a savings account.
Therefore, which one to choose completely depends on the person who is making the choice. It varies from person to person and choices are affected by various other factors too. Therefore, keeping in mind all the factors, one must choose between liquid mutual funds and savings accounts. Both have their own advantages and disadvantages; therefore, it will completely depend on the person as to where he wants to keep his money and the purpose behind it.
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
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About Dhanuja N. 
Mutual Funds Expert
0 connections, 0 recommendations, 21 honor points.Joined APSense since, May 3rd, 2023, From Mumbai, India.
Created on Jul 25th 2023 23:52. Viewed 142 times.
