Articles about Mutual Fund (MF) investments typically speak about fulfilling long-term goals. So naturally, investors assume that MFs cannot help achieving short-term goals.
Let us break this myth with the example of Ramesh, a travel junkie.
Recently, the company Ramesh worked for achieved success and rewarded its employees with bonuses. With this bonus, Ramesh wanted to plan a trip to Europe.
However, Ramesh was working on a big and prestigious project that would take about eight months to complete. He could travel to Europe only after this project ended. So his travel dates were uncertain.
So Ramesh decided to make use of liquid fund which are ideal for such cases where the investment period is short, but uncertain. The Funds also allow him to redeem them on any working day. The money would be credited to his account the working day after he submits a request for withdrawal, allowing for high liquidity. Certain Fund Houses also allow one to request for withdrawal through an SMS or App.
This way, he could let his money grow until he was ready to travel. He could redeem some of the funds when he finally started preparing for his trip like accommodation and flight bookings. He could use the rest of the funds during the trip to buy foreign currency and pay for daily expenses.
Planning for short-term goals become convenient with Liquid Funds.