Bajaj Finserv Mutual Fund has launched a new facility that enables you to invest the surplus money lying in your savings bank account, into the fund house. Called Savings+, this facility will help your idle money earn a bit more.
What is it about?
Savings+ works just like a traditional and age-old, Fixed Deposit (FD) sweep-in account. Just like the bank FD sweep-in account which invests surplus money lying in your savings bank account, into an FD, Savings+ will take your excess money in your savings bank account and invest in two of Bajaj Finserv MF’s debt schemes. These two schemes are Bajaj Finserv Liquid Fund and Bajaj Finserv Overnight Fund.
Here’s where it differs from a typical Fixed Deposit (FD) sweep-in account in a bank. The fund house has tied up with Perfios, a digital platform that has digitally connected with the Account Aggregator (AA) network. An AA is a digital platform that acts like your financial dashboard. In simple words, it pulls out your financial history, your bank account balance, your financial investments, credit card details and puts it up on a digital dashboard, in a secured manner. If you ever wish to, say, apply for a loan, your potential lender (a bank or a non-bank finance firm) can access your financial history to ascertain your potential to repay the loans in a timely manner. AA is a growing eco-system in India at the moment.
To be able to use Savings+, you need to sign up with Perfios. This facility is available on Bajaj Finserv Asset Management Company’s website. Distributors who sell Bajaj Finserv mutual fund schemes can also set this up for you. Once you enter your mobile number and validate it with via a One-Time Password, Perfios pulls up the basic details of all your bank accounts where your number is registered. Once you select the chosen bank account whose surplus you wish to invest, it analyses your bank statement. The aim is to analyse your surplus amount for the last six months, after accounting for all your investments and spends. Once it comes up with a figure, you select the scheme of your choice, transfer the amount and your investment is done. You can even edit the amount, if you wish to either invest a lower or higher amount than what shows up in the analysis.
This way your surplus amount from your bank account gets invested.
What works?
Savings+ allows you earn a bit more than your savings bank account. While your savings bank earns you around 3.5 percent interest and onwards, a liquid fund can earn around a 5-6 percent return.
Your liquid and overseas funds are liquid. You can get the money within 24 hours of applying for a redemption.
What doesn’t?
Savings+ facility allows you to invest your surplus amount just once. In a sense that the analysis of your last six months’ bank account to arrive at your surplus would be available only for that particular month when you run your query. If you wish to do this every month, you have to run this query yourself and the calculator will show you your results.
You can, however, choose to do an SIP as well. But here, you’ve got to select an amount and then stick with it every month, even if your next month’s surplus amount turns out to be different. “A mutual fund cannot sweep out different amounts of money, every month, from an investor’s bank account without the consent from the investor,” says Ganesh Mohan, Chief Executive Officer, Bajaj Finserv AMC.
Since the facility has been launched by Bajaj Finserv, your surplus money would obviously be invested with just one fund house. But this is okay since the facility is launched by a fund house and not a fintech MF distribution platform.
Your bank needs to have a tie-up with the AA network. If your bank hasn’t yet tied up with the AA network, you will not be able to transfer funds using this method to the fund house. According to Sahamiti, a not-for-profit company formed out of an association of financial institutions to promote the AA network in India, around 72 banks are on board the AA network.
Moneycontrol’s take
Any facility that nudges you - the investor- to invest surplus money in a mutual fund and not let your money lie idle, is good for the investor. A facility like this works well if you end up with a surplus amount every now and then - or even once in a while - so that your money is utilised well.
For a more permanent solution to deploying your corpus though, it’s always better to start a systematic investment plan into an equity, hybrid or even a short-term debt mutual fund.
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