Does investing in Liquidbees make any sense?

Personal finance
11

In that case, keep your money in Post Office Savings Account (POSA) as discussed on this thread about returns from Liquid Fund:

  1. 4% interest rate credited at the end of the financial year. Higher than SBI Savings Account (2.7%), HDFC (3%), and even higher than last 1-year return of many Liquid Funds and Liquidbees ETF.

  2. POSA does not come under RBI, but directly under ministry of finance and commerce so has a sovereign guarantee. Money in a bank is safe only up to Rs 5 lakh under DICGC insurance. But even if you keep 10 Cr in POSA, it’s safe with a Govt guarantee earning a constant 4% interest amount.

  3. Tax exemption of up to Rs 3500 for a single account and Rs 7000 for a joint account on POSA interest amount every year.

E.g. If I keep Rs 1 Lakh in a single account, @ 4% interest I would earn Rs 4000 as interest amount but out of which Rs 3500 would be tax-exempted under section 10(15)(1). So only Rs 500 interest amount is taxable. If you keep 2 lakh in a joint account (say with a family member), @4% you would get Rs 8,000 as interest amount but out of which Rs 7000 gets tax exemption and you pay tax only on Rs 1000.

  1. Money is accessible 24x7 with the mobile app and Debit card. Even in the middle of the night, I can withdraw money. Unlike Liquidbees, you don’t have to wait for the market to open to access your funds.

  2. Other features like home-delivery of cash and deposit of cash from your home (now a paid service).

You may ask, if POSA is so good why do we need a growth-based Liquid ETF (and not a dividend-based)?
It would help investors reduce taxability with the indexation benefit of a debt fund, and no TDS because there are no dividends.

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