Where to park the short-term money?

With the ongoing demonetisation the old notes can be deposited in the bank accounts and there is limit to the cash that can be withdrawn. So what best can be done with the idle funds lying in the savings accounts which on an average fetch not more than 4 per cent per annum.

One of the better ways to park money efficiently can be to put money in the short term debt funds. In short term debt funds there will be no entry load or exit load and the transactional charges are nil.  The money can be parked for as short as three months to one year in these short term debt funds. 

When it comes to returns, the top performing debt funds have managed to deliver returns in excess of 9 per cent for a one year period. ICICI Prudential Short Term Fund, Tata Short Term Bond Fund- Regular plan and UTI Short Term Income Fund- Regular plan are amongst the best performing short term debt funds in the market having delivered good returns.

So investors with cash requirement one year hence can park the funds in the short term debt fund instead of keeping it idle in the savings account.