I have to park Rs 6 lac as Emergency fund.If I keep this amount in savings account I will get 4% interest but with 30% tax slab , effective Rate of interest may be 2.8% per annum.
If I keep this amount in Liquid fund I may get interest of 5 % per annum & tax deduction of 30%
My Query is
- As this is Emergency fund , I may not require the amount say for 2-3 years.In savings account at least I will get 2.8% interest which will be added in my savings annually & cumualative benefit will be there.
- In case of liquid fund , I will get amount only when I redeem the units but no annual interest like savings account.
1 Answers
Hi,
If you have good amount of other sources of income, you may choose both the options.
Kindly note that returns from Mutual Funds are not guaranteed. However, debt funds are more tax efficient than FDs/Saving deposits.
Kindly read :
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