PhonePe launches new savings product ‘Liquid Fund’ for users on the platform
Bengaluru-based payments platform PhonePe on Wednesday announced the launch of a new savings product ‘Liquid Fund’ on its app.
The all-digital product aims to help PhonePe users grow their savings by earning higher short-term FD-like returns with the ease and liquidity of a savings account.
According to PhonePe, users can begin saving with as low as Rs 500 in a completely secure and paperless process in less than five minutes.
PhonePe said that customers can also withdraw their money instantly - anytime and from anywhere. There is no lock-in period and the customer does not have to maintain a minimum balance.
The company’s Liquid Fund product is targeted towards users across India including those from smaller towns and cities, who have never experienced solutions beyond savings accounts.
Currently, PhonePe already sees over 56 percent of its transactions from Tier II and Tier III cities.
Speaking on the launch, Terence Lucien, Head of Mutual Funds, PhonePe, said,
“This is our second product in the Mutual Funds space after Tax Saving Funds where we have created a completely digital investment flow for our users. Liquid Funds will allow millions of our users to earn higher returns on their savings with the ability to withdraw their money instantly 24x7*. We will continue to add more such financial solutions for our users to manage their money and fulfill their life aspirations in a better way.”
PhonePe launched its first wealth management product in March, last year. Launched in partnership with two asset management companies (AMCs) - ICICI Prudential and Aditya Birla Sun Life – the company offered an equity linked savings schemes (ELSS) to help people save taxes under Section 80C of the Income Tax Act.
Section 80C allowed individuals to reduce their taxable income by up to Rs 1,50,000 by claiming deductions on certain investments and expenditure.
Recently, in September last year, Paytm Money, which is Paytm’s wealth management arm and a competitor to PhonePe’s financial services business, raised Rs 40 crore in funding from its parent, One97 Communications Pvt. Ltd.
(Edited by Megha Reddy)