SmartSave

What Is Smart Save?

SmartSave is a feature introduced by Groww that lets you store money while earning higher returns than a savings bank account. When you keep your money in a savings bank account, you get a return of around 3.5% per annum. With Smartsave, you can get higher returns as compared to savings account.

SmartSave stores your money in ICICI Prudential Liquid Fund. Liquid funds are low-risk mutual funds. Their risk can be compared to that of keeping money in a savings bank account. They offer the same liquidity as a savings account yet higher returns, so your money gets a better chance at appreciating while being accessible.

Why Choose SmartSave?

SmartSave can be considered by investors that have a conservative investing approach and are looking for greater capital appreciation and protection of their investments. SmartSave can help investors create an emergency fund or build a corpus for a short duration as it offers high accessibility . Here are the salient features of SmartSave.

• Provides more returns than a savings account.
• High withdrawal Flexibility - You can withdraw a maximum of Rs 50,000 or 90% of the total amount invested (whichever is lower).
• Withdrawals can be made instantly ; 24/7 even on holidays.
• Options to invest via monthly SIP as well one-time only.

If you want to withdraw the entire amount, you can request for that too and you will get the entire amount in your bank account within 1-2 working days- just like withdrawing from any liquid fund.

How Does SmartSave Score Over a Fixed Deposit?

Both liquid funds and fixed deposits are ideal for investors with a low risk profile. The returns offered by liquid funds and FD are quite similar. However, SmartSave offers greater withdrawal flexibility. In FD, if you withdraw before the time period, you will be charged a penalty. There is no such thing in *SmartSave. Besides, with SmartSave, you also might need to pay less tax if you keep your investment for a long period of time, by availing indexation benefits.

So if you want greater accessibility to your corpus at the same time and need the safety of FDs then SmartSave can come to your aid.

*According to new SEBI guidelines upto 0.07% exit load is charged on liquid funds if the amount is redeemed within 7 days of investing.

Is My Money in SmartSave safe?

Nothing is 100% safe – not even the money kept in the savings bank account. While liquid funds are not entirely risk free and may be prone to interest rate risk and credit risk etc that may influence their NAV. However, there is little to no variation in the NAV fluctuations in the case of liquid funds as they invest mainly in short term debt securities. Liquid Funds are hence are low risk investment instruments and are well suited for conservative investors.