“A penny saved is a penny earned”. This age-old proverb holds true even today, especially when it comes to managing your business finances effectively.
Did you know? About 5 out of 12 months, the funds are lying idle with a business, and thus Business Owners, Trustees for Schools, Hospitals or Temples, are losing lakhs of Interest on treasury by keeping money idle in the current account.
One often overlooked area where companies excess funds lie idle is the current account. Many businesses keep their funds in a current account, which is convenient for day-to-day operations. However, the downside is that these funds earn 0% interest.
The question you should be asking is “Why Keep Money Idle in Current A/C with 0% Return?”
In this blog, we discuss an effective way to efficiently utilize the funds lying idle in your current account earning 0% return. Our team of experienced CFA analyst believe that such funds should not remain idle. As small amounts add up to large sums over long periods.
We will explore the concept of the “Weekend Parking Strategy”—a smart approach to efficiently utilize the funds lying idle in your current account.
Idle Cash- Weekend Parking Strategy
Do I have a registered Will in place?
Do I have any outstanding loan?
Who’s my nominee?
Have I listed all my assets and investments?
Have I purchased any life insurance policy?
We shift the idle funds from your current account into liquid and overnight funds that offer highs liquidity and earn interest during the non-business days. This interest quickly adds up over time and translates into significant earnings for your business.
In conclusion, liquid funds present an excellent opportunity to park idle cash efficiently. By parking your idle cash over non-business days, you enjoy the same level of liquidity and security while significantly boosting your returns. Don’t let your hard-earned money sit idle when it can work harder for you.
Remember, a penny saved is a penny earned, and the sooner you start, the more you stand to gain.
Connect with our CFA team to efficiently utilize the funds lying idle in your current account earning 0% return.
Open-ended debt schemes with a one-day maturity that invest primarily in overnight securities are called overnight funds. These offer a shorter time horizon than bank-specific investments, making them more attractive to investors who need access to their funds within a day.
Business Owner or Trustee for Schools, Hospitals or Temples, whose idle funds in current account are earning 0% return. We recommend parking the idle cash over weekends in overnight funds to earn higher rate of return on your idle funds while also maintaining high liquidity.
If your investing horizon is extremely short, overnight funds may be a suitable fit for you. Since these MFs don’t own any high-risk securities or assets, they are considered low-risk investments.
Overnight funds may be redeemed quickly and easily by contact the iVentures team or via our mobile application.
Starting 1st April 2023, gains from overnight funds will now be added to your taxable income and taxed at the slab rate.