Best Alternative To Saving Bank Account | Better Option Than Savings A/C
Best Alternative to Saving Bank Account
The traditional savings accounts paying nothing interest, so people are looking for Best Alternative to Saving Bank Account which provides Better Option than Savings A/C. Opening a saving account is the first step to reach at financial goal, which is mostly taken by the peoples but it is not the suitable place to put your money if you want acquire high interest rate. To put the money in liquidity funds are more beneficial rather than saving accounts.
There are far better places to park your hard-earning savings like as Paytm, Liquidity mutual funds. A fleet of upstart companies and even old ones offering latest schemes, in which you can invest your money and get better interest rate rather than saving account. According to the Federal Deposit Insurance Corporation, the average savings account interest rate is nearby 0.06% which is not enough.
Best Alternative To Saving Bank Account
Liquid funds are significant type of mutual fund in which people invest their money for short time period and acquire interest rate. It doesn’t contain any locking period. At the time of high interest rate scenario, everyone wants to earn high interest rate within the short tenure. It mostly produces interest rate up to 9 percent which is much higher than saving accounts.
Why Liquidity Funds?
Various banks provide various interest rates at saving account, mostly banks provides their customers around 4 % interest but only handful of banks recommend 6-7% interest on a savings. A smart customer always moves towards a good liquid fund. While on the other hand liquid mutual funds delivered 9.5% to 8.7% interest rate which is much higher than the 4% interest rate of saving account.
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It needs of investors not at all compromised means you know how quickly you can get your hands on your cash i.e. customer can obtain money whenever he/she need. Cash, savings account, checkable account are the assets of Liquidity because they can transform into cash as per requirement. In the case of unforeseen happening or financial setback you have to all redemption requests submitted before the cut-off time and you can payouts next day you can also call it redemption on T+1 basis.
The maturity period of portfolio is less than 91 days, the risk factors related to its interest rate doesn’t come up to the mark as it does in other debt funds and managers also charge high credit rating to maintain a very high quality portfolio that makes it less susceptible to default risk. While on the other hand, liquid funds are less risk free. The net asset values of liquid funds demonstrated a negative return over a short period.
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The interest rate of saving bank account is added to an individual’s income and interest up to Rs 10,000 in one financial year is not liable from tax. Different bank pay various interest as some pay quarterly intervals and mostly do half-yearly.
Liquid funds are open-ended schemes in which you can invest your money and get high interest rate. The logic of these funds is to have a portfolio consisting high on liquidity, low risk, it offers all time facilities and services which is customer require.
Do you know about chit funds and its works? There are so many chit funds available in market like as shriram chit funds, margadarsi chit funds etc. We have found large scale of frauds in previous year because people don’t know what exactly the chit fund works? We explain the chit work by the following example.
Assume there are 20 people’s works in company and each can contribute Rs 1,000 per month for the next 20 years. But the organizer decides 5% organizer charge for fixing the meetings, collecting money etc.
20 x 1000= 20,000
20,000 x 5% = 1,000
Suppose one person among of 20 persons bid 16,000. That means he accept the loss of 4, 000. That means 200 rupees deduct from the each person’s paying amount.
800 x 20 = 16,000
But the organizer charge is 5 percent of total amount on 20,000 that means 1,000.
Final amount = 16,000-1000=15000.
Know About – Rights Of A Mutual Fund Investor
Prepaid Credit Cards
If you have an old credit card with previous facilities, so apply for prepaid credit card which offers you tremendous security from the online frauds at the time of online transactions. It comes loaded with funds and simple in using. The biggest benefit of this credit card is that you can complete your transactions without incurring any debts and paying huge interests. You can obtain many extensive rewards points by using this card. There is some well known bank which provides the Prepaid Credit Cards facility like as SBI bank, ICICI bank, yes bank, Axis bank and HDFC bank.
Types Of Prepaid Credit Cards
- Open looped cards
- Closed Loop Cards
- Semi-Open Looped Cards
- Reloadable cards
- Non-Reloadable cards
Benefits Of Prepaid Credit Cards
- It is safest option of online transactions. You don’t need to worry about your transactions.
- You can use Open looped prepaid cards for withdrawing amount from ATM.
- It is easy to use and most beneficial.
- You can use this card as a gift card or travel card.
- Card holder also acquires extra cash for urgent purchases.
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Public Provident Fund
For the purpose of biggest investment “public provident fund” is the excellent option because it has very strict and specific rules for withdrawing the amount from the user the account. Investor can withdraw his balance from Public Provident account after the completion of maturity period of 15 years. Those who are extravagant now have a tremendous saving option because withdrawals consists convinced rules.
For example kirti has created a PPF account in January 2010. She can’t withdraw her money from his account before 1st April 2025. But in specific condition, she can withdraw some part of saving amount after 5 years of creating PPF account.
Current PPF interest rate – 8%
Documents required to open PPF Account
- Duly filled PPF account opening form
- Identity proof
- Residence proof
- Couple of passport size photographs
- driving license, PAN card, passport, voter id
If you always possess surplus amount in your saving account and earn only 3 to 4 percent interests but now, a far better options presents in markets rather than saving accounts because saving accounts paying nothing interest in comparison of other saving schemes.