September 30, 2010 11:54 pm
Which is the best place to park your emergency funds?
If its an emergency Fund then in no case you can take a risk.
My options are Savings + Liquid Funds.
Don’t take any chance with your emergency funds. Just put them in banks savings account. Some banks Like ICICI, SBI are giving facility of “extra interest” on account of transferring that amount to fixed deposit, which you can liquidate anytime. Take that option. You’ll get interest anywhere between 6% – 7% depending upon the interest rate & tenure you choose.
Do not park your funds in any mutual funds – be it liquid or floating rate as the company will take some time to transfer funds to your bank account. What if, there is bank holiday or non-business day.
If you’re talking about emergency fund, take all these points in mind before taking any decision.
Hope it will help you.
Emergency fund should not go to any risky fund – my suggestion will be to put half of it in saving account or sweep in account and half in liquid/floater funds/ultra short term fund.
If you don’t want to take any risks you can invest in MF Liquid Funds. You will get returns between 5 – 6 % returns, which is better than bank savings. However if you can take slight risk you can invest in MF MIP wherein you can atleast get 10 – 12% returns which is better than Bank FDs.
Bank Saving Account
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