I want to keep Rs 1 lakh as emergency fund. Which is better Mutual fund or Bank.?

Question

It should be available at short notice say a day or two and should also fetch decent returns. Consider tax implications also and give me a reply

Answer 1

Best Answer - Chosen by Asker

Always Bank Deposit is having more liquidity. You can choose between SB or FD. You can withdraw money from SB anytime even through ATM. From FD also you get back your funds immediately even not competing the term you deposited through premature closure with a meagre loss of interest,
To get interest from SB, the deposits should run through the last day of the month from the 10th of the same month. If you withdraw the money anytime on the day or before the last day, you will not get any interest for the month. But for FD you will get interest upto the days of withdrawal provided the FD has run for the minimum days stipulated. At any day you can withdraw the FD with short notice, ie immediately of your request.

There is not much tax implication. It is zero, if you could sign on the forms supplied by the banker.

Source(s):

banker

Asker's Rating:

Asker's Comment:

Excellant. Thankyou for the information

Answer 2

central bank of india

Source(s):

i know it is the best bank of india

Answer 3

always bank

Answer 4

As for as emergency fund is concerned, i prefer bank to mutual fund

Answer 5

if u want tax impliciations select some ELSS funds, like icici tax saver (G), tauraus libra tax shield, (visit moneycontrol.com for more options). there will be a initial lock in period of three years for all tax saving schemes after which yr money will be available in a short notice, but it fetch you a good return.

Answer 6

Bank would be the best choice as you can withdraw at the moment of your choice.

Answer 7

emergency fund is a fund which is kept as a backup and can be ready for use in a moment notice.
idea here is to have it safely and which that can be redeemed or taken in a jiffy.
i would advice no MF or FDs these will take around 3 to 7 days to reach your account.

i would strongly advice it to in your bank ( so that you can withdraw it a moment notice)
or at home .

Source(s):

my love for personal finance.