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PhonePe Launches Liquid Fund: Is It a Good Investment Option?

IndianMoney.com Research Team | Posted On Monday, January 27,2020, 05:13 PM

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PhonePe Launches Liquid Fund: Is It a Good Investment Option?

 

 

Digital Payments Company Phone Pe announced the launch of liquid fund investment through its app on Wednesday 8th Jan 2020. This is a great opportunity for the users of the app to invest their surplus money in liquid mutual funds and earn an extra income. The app has a tie-up with the Aditya Birla Mutual Fund for this offering where the users can start investing from a minimum amount of Rs. 500. There is no prescribed upper limit on the liquid mutual fund investments.

Subscribers of the scheme have the flexibility of withdrawing and depositing their money easily with the help of a simple click. You can now invest in liquid fund schemes absolutely free of cost suing the Phone Pe app.

Want to know more on  Liquid Funds? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice/education to ensure that you are not misguided while buying any kind of financial products.

Phone Pe, the flipkart acquired company stepped into financial services in 2018 with the buying and selling of gold and with the introduction if tax-saving funds in 2019. As of now, the app offers three equity-linked savings schemes along with one liquid mutual fund investment option.

See Also: What Are Liquid Funds? Is It Good To Invest In Liquid Funds?

Terence Lucien, the head of mutual funds, Phone Pe, said in a statement, “This is our second product in the mutual funds space after tax-saving funds where we have created a completely digital investment flow for our users. Liquid funds will allow millions of our users to earn higher returns on their savings with the ability to withdraw their money instantly 24x7. We will continue to add more such financial solutions for our users to manage their money and fulfil their life aspirations in a better way."

What are Liquid Funds?

Liquid funds can be simply defined as debt mutual funds that allow subscribers to invest in short-term market instruments like treasury bills, call money and G-secs, thus making it a safe investment option for investors. These funds usually invest in instruments that have a maturity of up to 91 days. These investments contain low-risk and are highly liquid. They allow investors to earn better returns compared to a savings account, thus they can park their idle money and earn decent returns within a short tenure.

See Also: Saving Account vs. Liquid Funds: Which Gives Better Returns

Should You Invest in Liquid Funds?

Experts believe that liquid funds are a good investment option for beginners and low-risk investors and can be an ideal option to fulfil short-term needs of any investor. Therefore investors who are looking to invest in mutual funds and investors who are looking to park their savings for a short-term can opt for liquid fund investment.

However, investors must evaluate the risk exposure of these funds before making an investment decision. As discussed these funds carry the lowest risk and are not completely risk-free options like FDs or savings account.

Also, investors must equip themselves with the knowledge of the charges they have to carry on such investments. As per the guidelines issued by SEBI, liquid funds carry an exit load of 0.0065-0.0045% in case the investor exits his investments within 7 days of investment. Revised guidelines also state that liquid fund schemes can invest a maximum of 20% of their total assets in one sector. These guidelines helped strengthen liquid funds as now they are even safer investment option than before.

See Also: Debt Funds vs. Liquid Funds: Which One Should I Invest?

Should You Invest in Liquid Funds Through Phone Pe?

Now the main question arises, that is, whether you should opt for such investments through Phone Pe app? What are its benefits?

Phone Pe is a digital product that allows users to make transactions within seconds. Along with providing attractive features like payment of credit card bills, purchase gold and transfer money up to Rs. 1 Lakh using the Phone Pe wallet, the app is now offering you an investment option.

If you are willing to make investments on the go then investment through this app makes sense. This will enable you to earn higher returns than bank savings account with minimal documentation and hassle.

With this facility, 175 million Phone Pe users can now convert their surplus money into income-generating investment. There are huge numbers of customers who have idle money lying in their wallets ranging from 5000 to 50000. Thus with this digital investment option customers can at least convert half their savings into investment. The option is integrated with the Phone Pe mobile app that needs users to authenticate through a KYC process before they start investing.

You can not only invest money digitally but you can also track the growth of your savings in real-time. Further, there are no lock-in periods or no minimum balance requirements.

See Also: How to Invest in Liquid Funds?

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