Split your surplus money between sweep-in FDs and liquid funds

SMART MONEY MANAGEMENT | FD guarantees a forward return while liquid fund shows the past returns

- SANJEEV SINHA

YOU MAY OFTEN get surplus money in hand, but may not have a plan to deploy the same in an appropriate investment instrument. In such a situation you'll lose the return till the fund remains idle in your hand. The best way is to immediately invest the money as soon as you receive it unless you have a spending plan.

Sweep-in FD and liquid funds are two attractive investment options available in the market where you can deploy your surplus fund, but it's important to use them in sync with your financial needs. So, let's understand which is a better option for you - a sweep-in FD or a liquid fund?

Pros & cons of sweep-in FDs

Most banks allow you to set up auto sweep-in FDs in your bank account. In auto sweep-in FDs, you can fix a cut-off limit in your bank account and if the account balance increases above your set limit, the excess fund automatically gets transferred to the linked FDs.