Reliance Capital Asset Management Ltd has tweaked and re-launched a product that aims to take on banks offering higher interest rates on their savings bank account. Originally launched in January 2006, it’s called Reliance Any Time Money Card.
What is it?
It works just like your bank’s automated teller machine or ATM-cum-debit card. Using this card you can withdraw money from any of your Reliance mutual fund (MF) schemes or can even shop with it. When this card was issued in 2006, it was only introduced for three schemes. Later, the fund house extended this card to all the schemes.
Here comes the major tweak behind the card’s relaunch. The MF mandates that you must invest in either Reliance Liquid fund—Treasury Plan (a liquid scheme) or Reliance Money Manager Fund (an ultra short-term scheme) to be eligible for this card. Over and above this, you are free to invest in any of the other Reliance MF schemes. Additionally, the fund house has a tie-up with HDFC Bank Ltd. Through an HDFC Bank’s automated teller machine, you can withdraw from any of Reliance MF schemes.
But if you withdraw from any other bank’s Visa-enabled ATM—or shop using Reliance ATM card—you can only withdraw from either of the two primary account schemes that you have invested in. The fund house said that the ATM card is meant as an alternative to savings bank account and to offer similar liquidity. The fund house, therefore, claims that it does not make sense to invest in long-tenor schemes such as equity and bond funds and then withdraw from them.
Limits and cost
The card comes free of cost, except when you use it to withdraw cash—or check your account balance—when you are abroad. The card offers instant liquidity compared with the traditional way of MF withdrawals. You can withdraw up to 50% of the scheme’s balance or Rs 50,000, whichever is lower. That’s the daily limit; you can continue to withdraw the next day, provided you have sufficient account balance.
Should you acquire the card?
It’s hard to imagine anyone who still doesn’t have an ATM card of a bank, so this ATM card acts as an additional one, if you need one, that is. Go for the card if you are invested in Reliance AMC schemes because it is free of cost. You may just want to keep it for emergencies. You may also have to invest further in their primary account schemes to be eligible for the card, but the convenience and liquidity that it offers may be worth the effort. In this case, you may invest a minuscule amount in liquid funds.
Remember though, using your equity or other long-tenor funds to sponsor your shopping or withdrawal needs is a bad idea; these are best left untouched to meet your original finance goals. If you must withdraw, stick to your liquid fund investments for withdrawals.
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