PhonePe on Thursday announced the launch of a new savings product ‘Liquid Fund’ on its app. This digital product, PhonePe claims, can help its users grow their savings by earning higher short term FD-like returns.   

It said in a statement that users can begin saving with Rs 500 in a paperless process in less than 5 minutes. 

“Liquid Funds are the best way for new users to experience Mutual Funds as the money is invested in safer instruments such as bank and government securities,” it said.

Like most mutual funds, users can withdraw their money at any point. This product has no lock-in period and the customer does not have to maintain a minimum balance. When a user wants to withdraw instantly, 90% of the balance, up to Rs. 50,000 max. per day will be credited to the user’s bank account within 30 minutes. The balance will be credited within 2 working days.

With this launch, PhonePe is hoping to take large strides towards its goal of expanding awareness and adoption of Financial Services products in India. PhonePe aims to achieve this by creating simple products and offerings that are intuitive for customers to understand and easy to apply for. PhonePe’s Liquid Fund product is targeted at users across India including those from smaller towns and cities, who have never experienced solutions beyond Savings Accounts. PhonePe already sees over 56% of its transactions from Tier 2 and Tier 3 cities, the company said.     

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 fulfil their life aspirations in a better way.”