USE YOUR BONUS SMARTLY
Your company rewards you with an attractive bonus. Now, wisely invest the money.
NOT THE BANK ACCOUNT
It’s good to see a high balance in your bank account statement. But when it comes to your bonus, it’s best to take it out of the savings account. Otherwise, there’s also a good chance you may spend it.
PARK IN LIQUID MFs
Bank accounts don’t earn high interest rates. Even, savings accounts certainly don’t. That’s why, it is also better to park your bonus in a Liquid Fund or Ultra Short Term Debt Funds, which have historically given higher returns than bank accounts.
INVEST, INVEST, INVEST
Decide exactly how much percentage of the bonus you will spend. Ideally, you should invest half or three-fourth of your bonus. Park this money in Liquid Funds and Ultra Short Term Debt Funds.
DON’T INVEST THE ENTIRE AMOUNT
Some debt is costlier than others. Credit cards form the costliest debt. Use a portion of your bonus to pay this debt off. Invest the rest. That said; don’t pay off cheaper debt like your home loans. They can help you avail Tax benefits.
SYSTEMATIC TRANSFER PLAN
Begin a STP that transfers the money from your Liquid Fund to another MF scheme on a monthly basis. So, this can also help you invest for your long term goals. This is akin to a Systematic Investment Plan.
The money that remains in your Liquid Fund even after your monthly STP deduction can be used as an Emergency Fund.
This way, your money is working smart. So, it also earns you a decent return. Moreover, it is ready for emergencies, and it is helping to meet your future goals.
START TAX SAVING ELSS INVESTMENTS
Start multiple STPs. One of this can be for your annual ELSS investments to save Tax. This way, you can also reduce the burden on your finances in the January-March when you invest for Tax saving purposes.
The other STP you start for long term goals can be in an Equity Fund. This way, you get the benefit of capital protection through the Liquid Fund and also earn returns from the Equity Fund. So, this reduces your exposure to risk.
Not only this, but also the following…….