Digital payments platform PhonePe has announced the launch of a new savings product on its platform that aims to help people earn higher short-term FD-type returns on idle money lying in their savings accounts.

The new product, which is called ‘Liquid Funds’ is on the lines of Mutual Funds. In this, PhonePe will invest money in safer instruments such as bank and government securities. There is no lock-in period and the customer does not have to maintain a minimum balance.

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. 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.”

Users can begin saving with as low as ₹500 in a completely secure and paperless process in less than 5 minutes. Customers can withdraw their money instantly. For instant withdrawal, they can withdraw 90 percent of the balance, up to ₹50,000 per day that will be credited to the user’s bank account within 30 minutes. The balance will be credited within two working days.

PhonePe said that the ‘Liquid Fund’ is targeted at users including those from smaller towns and cities, who have never experienced solutions beyond savings accounts. The company says that it already sees over 56 percent of its transactions from tier II and III cities.