2 Legit Ways Described In This Article, Can Help You Earn An Extra Income

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Ever wanted to have an extra income other than the fixed salary that you earn every month which is not enough to fulfill your financial needs. In this article, two easy ways have been discussed that are the Liquid Funds and the Accrual funds.

The investors ready to put a small amount of their hard money can invest in the Liquid Funds or accrual funds or anyone can invest in both of the routes to have an extra income. Before anyone invests money in either of the two, it is very important to note the difference between the Liquid Funds or Accrual funds.

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Liquid Funds are those mutual fund schemes which are ideal for putting money for a very short period of time and the time duration is not more than three months. Since these funds are of a very short period of time, it has a lower volatility and fewer risks. Accrual funds are those funds which invest in Debt papers of short and medium tenures to generate interest income. These funds usually do not take any interest rate and they only stick to the earning interest of the investor.

Accrual funds can be helpful for those who have crossed the age of retirement and living their life on the small amount of money given as pensions. According to the financial experts, investing in the accrual funds can help the retired person with higher post-tax income.

 

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The investor will invest in the accrual funds and subsequently, a systematic withdrawal plan (SWP) for the same scheme will be established. The Systematic Withdrawal Plan (SWP) is set up in such a way that only the gains from the fund are transferred to the investor’s bank account, at regular intervals. The benefit of the accrual fund is that the investor enjoys a regular flow of extra income and in return pays lower tax even though a fixed deposit was deposited. In this investment, only the gains of the investors are taxed.

Investing in Liquid Funds could generate annual returns of nearly 7% and the important thing is that the return after investing in the Liquid Funds can be very attractive. After investing in the Liquid Funds, the banks cut interest in the savings account and these liquid funds are almost a perfect substitute product for SB accounts. In the liquid funds, the fund manager can generate a higher amount of returns and the amount that the investor receives can be a bit higher than expected.

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