January 31, 2014 3:03 pm
I want to park my emergency funds in debt funds. What are the good debt funds for this purpose? Is it better to park emergency funds in FD compared to debt funds?
Sarath (and Ashal),
Emergency funds need to be available quickly – within a day’s notice, and hopefully without any penalty. Ultra short term funds and liquid funds fit these requirements better than FDs. Hopefully, the money will remain untouched for a year and you can get indexation benefits as well (for taxation).
Reliance Money Manager fund even offers an ATM card for immediate money access. UTI FRF ST fund is also a good option.
You can consider Birla Sun Life Floating Rate ST Inst or Templeton India TMA Super Inst MFs
Dear Sarath, please split your emergency funds into 2 parts. invest 1 part in FDs and another in liquid fund. Please opt the liquid fund from your existing Eq. funds’ AMCs.
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