I want to buy stocks when market dips, for this reason i would need to hold cash which would be needed to be invested in market during such dips.
I don’t want to keep this cash lying in bank account or just added as funds in zerodha.
What are different ways in which this cash can be utilized to generate very small returns while keeping the capital secure ?
Today some Banks like Kotak offer upto 6% as Savings Account interest. Transfer to broker account happens instantly through payment gateway/UPI. Why don’t you transfer from Savings the moment you want to buy and then execute the trade. Till such time the funds lie in your Savings account earning 6% interest. Can’t see a safer mode than keeping funds in the Bank account.
Buy LiquidBEES. It is an ETF. You get around 6% tax free returns. When you want to buy stocks, you can sell LiquidBEES and buy stocks immediately.
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Also, check out money manager funds on Coin. Some of them give you an average of over 8.5% p.a. But liquidbees are the easiest to buy and can be sold instantly to buy equity when the market dips, although the returns are slightly lesser.
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People’s started saying FD in Banks are not safe. Any comments on this. If so, then where to park the money
There are short term money management debt funds of AMCs you can buy them and keep till you get a chance to invest in equity.
Secondly, there are listed bonds on NSE cm segment, this bonds are available with different coupons, you can buy them and hold till you get a chance to invest in equity.
Benefit of investing through listed bonds is you will get net settlement benefit while selling . I mean you can sell bonds and buy shares on the same day as both are available under same segment of exchange , you need not to wait for the payout of sold bonds unlike in case of MFs where payout comes on next day
Thanks for your advice, can you also please guide me on how we can buy such bonds from NSE using zerodha account.
That’s the clause. If anything goes wrong with the bank, you’ll get only 1 lac. Govt is looking to increase this amount in the FRDI bill. That’s why it is very essential to keep the money only in good banks(steady growth, no debt, controlled NPA)
https://www.nseindia.com/live_market/dynaContent/live_watch/equities_stock_watch.htm?cat=SEC here you can check all the bonds lists on NSE CM segment. You can select most liquid one suitable to your risk appetite. This can be added in market watch of zerodha kite and start purchase.
But spread. Is too. Much for some bones
Liquidbees seems to be the only (?) good option.