Next time when your clients get an SMS on salary credit, it could be directly in their MF account instead of a bank account.
Nippon India Mutual Fund has relaunched ‘salary advantage’ program in which salaried individuals can choose to draw their salary into a folio of Nippon India MF instead of a bank account. The objective is to give the individual an opportunity to earn better interest rates than a bank account.
The fund house believes that many salaried individuals have surplus money in their bank accounts but they do not invest them diligently and end up losing out the opportunity to grow their money.
Saugata Chatterjee, Co- Chief Business Officer, Nippon India MF said that those who opt for ‘Salary Advantage’ have the flexibility of choosing the quantum of salary that they want to receive through the MF folios. Depending on that, the employer divides their salary between MF account and savings account. The credited amount is then invested in liquid mutual funds, which has the potential to earn higher returns than a bank’s savings account.
While investing in liquid funds could give 6-7% return, saving in bank account gives around 3.5-4% return.
Chatterjee further added that the amount invested through this product is liquid and can be withdrawn at any given time. To ensure that investing in this program remains as liquid as a bank account, Nippon India is offering the investors a Visa-debit card. Using this card, investors can withdraw money from ATMs or use it at retail points.
So far, the fund house has tied up with nearly 100 companies for the ‘Salary Advantage Program’. Further, it is currently approaching several multinational companies and online aggregators.
Nippon MF launched the earlier version of ‘salary advantage’ program in 2011 in which it had allowed investment in 11 schemes including equity funds.
