Why Liquid Funds?
My Current
Account deposit is
getting me 0%.
How do I get
return with safety
& liquidity???
I can’t take
risk, its
company
money.
1
Liquid Funds
1. Returns – Vs Zero Return in Current Account
Money sleeps in Current Accounts, Liquid Fund generates Market driven Yield
t Accounts, Liquid Fund generates market driven yield
Current Account
Liquid Funds
2. Manage Cash Flows
Efficient management of Inflow & Outflow can generate returns from Liquid Fund
even on weekends
even on weekends
Inflow
Outflow
Surplus
Liquid Fund
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3. Liquidity
On redemption, money credited into your account in morning next working day.
Liquid Fund generates yield on daily basis. One can invest even for 1 day.
Liquid Fund generates yield on daily basis. One can invest even for 1 day.
Invest
Redeem
Money back with Return
4. Safety
Fund Invests into high credit rated CDs , CPs , CBLO , T –Bill etc with every short term
maturity. into high credit rated CDs, CPs, CBLO, T- Bills etc with very short-term maturity.
3
It must be difficult to handle
Expertise
Time
Manpower
Paper work
4
It’s
SIMPLE
Purchase
You send us purchase transaction on fax before 2 pm
Units Allotted
Original documents to be collected next day
Your Bank transfers money to our account before 2 pm
Redemption
You send us redemption transaction on fax before 3 pm
Units Redeemed
Original documents to be collected next day
Our Bank transfers money to your account in morning on next working day
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In other
words
• For Purchase & Money transfer before 2.00 pm.
•
•
•
•
•
Applicable NAV = T-1 (T=Transaction day) for Liquid Funds
Redemption latest by 3:00 pm.
You can do it on the same day for one day investment.
Direct credit of redemption proceeds on the next working day.
Redemption request should mention amount or units to be redeemed under the
relevant option of the scheme.
Working days: Monday - Friday
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An
Illustration
Case 1 – 1 DAY Parking
Mr. Smart from M/S. XYZ Co decided to park his Current Account surplus for one day only i.e.
Wednesday, since he has payment obligations to honour on Thursday.
On Wednesday
Step 1 – 11 am - He faxed Purchase request to MF office
Step 2 - 11.05 am - Instructs banks to transfer money via NEFT
Step 3 – 1.30 pm - Got confirmation from MF RM on receipt of Fund in MF account
Step 4 – 2.30 pm – Faxed Redemption request to MF office
Step 5 – Units allotted to Mr. Smart’s Company at Tuesday NAV & redeemed at
Wednesday NAV, thus resulting into 1 day accrual return
On Thursday
Step 6 – Money credited in Company’s Current Account by 10.30 am, comfortable
enough to meet his outflows
Step 7 – He received Statement of Account confirming his transactions & for
reconciliation purposes
Mr. Smart is happy with return, which otherwise in current account would have earned ZERO. And it was
simple as well.
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An
Illustration
Case 2 – WEEKEND parking
On Friday, Mr. Smart from M/S. XYZ Co decided to park his Current Account surplus for Saturday &
Case
2 – WEEKEND
Sunday
(2 days).parking
since he has payment obligations to honour directly on Monday. Saturday & Sunday
being holiday.
On Friday
Step 1 – 11 am - He faxed Purchase request to MF office
Step 2 - 11.05 am - Instructs banks to transfer money via NEFT
Step 3 – 1.30 pm - Got confirmation from MF RM on receipt of Fund in MF account
Step 4 – 2.30 pm – Faxed Redemption request to MF office
Step 5 – Units allotted to Mr. Smart’s Company at Thursday NAV & redeemed at
Sunday NAV, thus resulting into 3 days accrual return
On Monday
Step 6 – Money credited in Company’s Current Account by 10.30 am on Monday
comfortable enough to meet his outflows
Step 7 – He received Statement of Account confirming his transactions & for
reconciliation purposes
Mr. Smart is happy with return, which otherwise in current account would have earned ZERO. And it was
simple as well.
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