Do you have deposites in bank account.. Invest wisely

Demonetisation has brought in people's money into banks, in the form of huge deposits. It is natural now for the depositors to think of what to do with the money. Instead of just keeping it in banks, it is better to invest it well.

Deposits should not lie idle

Money in the form of bank deposits, even for a single day, is excess. You will not get even four per cent interest on it. Money lying idle in savings deposits, after monthly expenditure, is not useful in any way. Categorically speaking, a certain amount necessary for monthly expenditure should be deposited in a 'deposit wallet.' A small emergency account, needed for, say another 15 days might be kept aside. The rest can be invested wisely.A part of monthly earnings must be saved for the future. If you do not need this money for another five years, it can be diverted to equity funds. There is no other method that would give you more for your investments than equity funds. Bombay Stock Exchange (BSE) Sensex has given more than 10 per cent annual dividends in the past 20 years. If you had deposited Rs. 1 lakh in 1995, your investment would have grown to Rs. 6.75 lakh. This is based on Sensex estimates. Some mutual funds equity investments have earned an average over 20 per cent dividend. This shows that it earned double the dividends than what is quoted above.

Between one and five years

Annual income that is not needed within five years can be deposited in less risky schemes. For this, debt mutual funds are convenient. Some amount can be invested in equity balance funds. These attract more gains than fixed deposits. Even liquidity factor is flexible. You can simply liquidate the funds whenever you need them.

Within a year

Few people keep huge deposits in banks, as they are likely to need them within six months or a year. This is not a wise step. Instead, these amounts could be diverted to ultra short-term deposits. Bank deposits yield four per cent interest. The gains are less than the rate of inflation. Moreover, liquid funds facilitate easy withdrawals at anytime as per the wishes of the customer. This is possible through Immediate Payment Service (IMPS). Withdrawals are easy through ATMs. However, a good Assets Management Company (AMC) must be chosen.

Sweep-in Savings Accounts

For some, money management is a headache. They just deposit money in the banks and keep it there. Liquid funds, mutual funds investments and filling up the forms are all too complicated for them. Such ones would do good to change their savings accounts to 'Sweep-in Accounts.' This means, extra amounts in existing deposits, after the permitted limits, will automatically be credited in fixed deposits. But it will not be blocked. This means, the money can be withdrawn through checks, debit card or net banking. These deposits earn seven per cent interest.

Financial Management

At present, all wallets are empty. The little amount that is drawn from banks is disappearing fast for small necessities. Under these circumstances, a wise plan is necessary for optimum utilisation of the deposits lying idle in the bank. Emergency funds, investments and payment of bills, should be done without fail. Entertainment and thriftiness should be kept aside. Demonetisation had been a big learning experience in discipline regarding expenditure. Mostly importantly, you should not stop monthly investments, just because the money is not sufficient. Only expenditure should be reined in.

Kiddy bank for kids

Buying a kiddy bank for kids and making them save small coin change in it on a daily basis, is advantageous even for adults. These coins would come in use when needy. Moreover, a deposit is being made in the name of children. The money can be used to buy something for the children. This way the youngsters also learn about savings.