Community Information
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Where to keep money for the medium-term trading?
I understand that liquidity is king in the market, one metric which I always try to optimise is buying power reduction. However, keeping cash brings a different set of challenges in that I do not get any interest on this ideal money (my broker provides zero interest, my bank IMPS limit is 2L & UPI is 50k; moreover, CASA interest for my bank is 2.9% so I will not prefer to keep it in my bank account). The easiest way to earn interest on ideal money is to buy debt and sell it before I need to make the trade or neutralise my account. What are the most liquid fixed-income assets in India and their indicative interest rate? I do not want to pledge them and use them as a margin since they are my cash. I am hoping to keep 50% of my money permanently there (the emergency fund needs instant access, but I hope that I should never have to use it), and the rest I will rotate with an expected holding duration of 7-10 days). What alternatives do you use for it? Liquidbees are the most popular, and CDSL does not charge CD+18% GST on them, but my broker does. Could you please provide me with what will be my final return on 10L (weighted average annual holding), assuming I am making 252 trades (B+S) of 1L each (5yr average annual return of fund - trading charges and taxes of different brokers - any additional charges specific to liquid bees) along with the spread, liquidity, and how quickly I can use the cash (not margin) for trading once I sold them?2
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