The post demonetisation drive has created a situation where after all the mandatory tax savings I am still left with a lot of money in my bank. I am looking to park Rs 5 lakh into efficient instruments than the bank and with little risk. Please suggest a way out.

Maneesh Kumar, Gurgaon

Your situation is understandable and you are in the right lines of wanting to put your savings into productive assets. Keeping cash in the bank or in hand is a difficult proposition these days given the short supply of cash in the systems. We would suggest you consider keeping aside money in a liquid fund, which is an alternate to the bank. However investments in these funds come with no guarantees.

Liquid fund are mutual fund which invests primarily in money market instruments like certificate of deposits, treasury bills, commercial papers and term deposits. These funds have no lock-in period and withdrawals from them can are typically processed in a short span. For instance, if you fill in a redemption request before 3 PM (between Monday and Friday), the money is credited to your account the next day before noon. These funds also have no entry and exit loads.

These days certain AMCs offer an ATM card access with liquid funds, which means you can go and withdraw the money you have in these funds from ATMs. This route does have certain limitations on the sum that you can draw from the ATM, but in functionality, it is closest to how money in a savings bank account functions. So, put in the excess money that you have in the bank into any liquid fund for efficient money management.

olmdesk@outlookindia.com