A phone is an essential investment we all make and if it’s the latest bad boy in the market, like the OnePlus 8 Pro costing anywhere between Rs 54,999 or Rs 59,999, you need a solid savings plan to dream it up. Here are three short-term saving tips that will have your back so you can pick up your favourite tech toy without any hassles.
This is part of the debt funds category within the broader mutual funds sector. The fund houses (providers of these funds) will pool your money along with other investors’ to majorly buy debt securities that mature as soon as 91 days or three months. In lay terms, most often bonds of corporations are bought that are due soon. They are liquid because there isn’t a lock-in of 6 months or 1 year, like other debt funds. What’s more, you even earn returns at the rate of a minimum of 6.5% upwards (historical analysis). The minimum amount to deposit can be either Rs 1,000 or Rs 5,000 depending on the scheme you choose. You can easily put your bonus away into something like this.
So if you are anticipating the release of a dearly beloved phone, you could set apart some cash to be invested in liquid funds. But be aware that due to redemption pressure during the bad economic situation, Franklin Templeton had to shut down six of its debt funds. However, not every fund house makes credit heavy investment. Our advice is to seek out an adviser or a friend who understands the debt fund market well. Here is a couple of good performing ones: Quant Liquid Fund and Edelwiess Liquid Fund.
Term Deposit and Recurring Deposit
Term Deposit may sound rather old-fashioned, so let’s refer to it by its more popular name, Fixed Deposit (FD). But did you know you can invest your money into a term deposit for as low as seven days? Although the interest you earn can be negligible for a seven-day term — around 3% per annum — the goal is saving discipline. If you want to buy the One Plus 8 Pro you could have saved a certain sum of money each month. Let’s say you are looking for the 12 GB, 156 GB model (at Rs 59,999), you could have invested Rs 20,000 each month into a month-long term deposit (or even 7 days for liquidity).
Another option is the good old recurring deposit (RD). The name has it all — you deposit a predetermined amount each month and earn a fixed rate of interest. There is a lock-in period of at least one month before which you cannot withdraw or close our account. Generally, the minimum tenure is six months, but this can vary from bank to bank. Pro saving tip: Smaller banks/financial institutions provide slightly higher interest rates to consumers. Check out Suryodaya Small Finance Bank and Utkarsh Small Finance Bank.
Both FDs and RD have very low requirements for minimum deposits. Once you have reached your phone-buying goal, you could continue them by reducing the deposit amount to continue saving. Often you can begin RDs and FDs via net banking.
Savings Bank Account
Yes, we are really recommending a bank account. If you find starting separate mutual fund folios or savings deposit accounts cumbersome, you could just set reminders to save a certain amount into your bank account, and swear to not use it. Private institutions like Kotak Mahindra Bank offer 6% interest rates on its savings account, much higher than usual. There is even a zero balance account you can take advantage of. High Net Worth Individuals may tap into smaller banks such as ESAF Small Finance Bank or Equitas Small Finance Bank for interest rates crossing 7% on significant account balances.
If you start now, it’ll be a few months before you have the money to buy this particular phone in question. Maybe something better will be out by then, but at least you’ll have the funds to grab that model immediately. Saving is not daunting — it is just a matter of consistency and remaining focused on your goal. But assess your monthly cash inflow and outflow before opting for any of these saving tips.