Should you shift all your money from a savings account to liquid funds?

The SBI savings account interest rate dropped to 2.5%, among the lowest we've seen in the past. Other banks also offer rates in the range of 2.5% - 3 % pa.

We got a bunch of queries asking if they should move their money from SB to liquid funds, as liquid funds' Yield to Maturity (YTM) is about 6%. But is that what you will really earn?

Here’s a Varsity explainer 🧵 We all understand liquid funds. They are MFs that invest in short-term debt securities issued by the Government, Banks, and companies.

Relatively, they are safe. But what most people don't understand is YTM. 🤔

In 2024, Jane Street, a Wall Street high-frequency trading (HFT) firm, made a profit of over $2.3 billion in India alone. In 2023, they made about a billion dollars. India is one of their most profitable markets.

Do retail traders stand a chance against HFT traders? Here is Varsity’s take on this. 🧵👇(1/8) Besides Jane Street, many Wall Street HFT heavyweights are active in India - Citadel Securities, Tower Research, and Jump Trading.

Trading is a zero-sum game. One trader's profit is another trader's loss. Jane Street alone inflicted a combined loss of $2.3 billion on its counterparties in a single year. We will not get into the how; that's another topic. (2/8)

The RBI recently slashed the repo rate by 50 bps. This is great news for the economy and borrowers in general because the interest you pay every month should reduce.

But then you see your next home loan EMI, and it has not changed; it's the same. Ever wondered why?

Here is a Varsity explainer and everything you need to know about home loans and the RBI’s repo rate. There are two components to any loan: the interest rate that you pay and the tenure over which you repay your loan.

When the RBI reduces the repo rate, you naturally expect your EMIs to reduce. However, most banks usually keep the EMI amount the same, but reduce the loan tenure.

Of course, you can speak to the bank to reduce the EMI amount while keeping the tenure unchanged.
Both options reduce your interest outgo.

SEBI’s debarment of Gensol and its promoters from the securities market has resurfaced the discussion on corporate governance.

Is there a way of spotting red flags in corporate governance? Let’s explore👇. 🧵(1/11) When studying a listed firm, check for the "Independent Auditor's Report" in its annual report.

The first section of the Auditor's Report is titled “Opinion” or “Unqualified Opinion.” It is a red flag⛳️ if titled anything else. (2/11)

What if we told you Nifty will expire somewhere between 23193 and 24006 on April 3rd, 2025?

No, a YouTube baba or WhatsApp University didn’t tell us that.

It’s from a legit research paper by Andrew Mack and Euan Sinclair that’s currently blowing up in the options world.👇(1/7) The ATM straddle premium can be used to calculate the option's implied spot price at expiry.

Source: Retail Options Trading - Andrew Mack and Euan Sinclair, 2024. (2/7)

India will remove Google tax from 01 April.

Do you know what is Google tax? And is this in response to Trump’s potential reciprocal tariffs?

A quick thread!🧵 (1/8) Google tax, or equalization levy, was first introduced by India in 2016 to tax the digital ad revenues of MNCs not based in India.

In 2020, India expanded the levy with a 2% tax on e-commerce revenues of non-Indian companies.
Other countries followed suit. (2/8)

The Nifty 50 has recovered 4.5% this week.

Reason: investors have been buying because Nifty's PE has fallen to what is perceived as a ‘fair valuation.’

But should you base your investments on Index PE? We have 3 reasons why index PE should be taken with a pinch of salt. (1/5) 1⃣The top 8 stocks make up ~50% of the Nifty 50 index, while the other 42 represent the other half. The index will reflect more about the few heavyweight stocks than the majority but low-weight stocks.

What about sectors? (2/5)

🚨 Big update on DigiLocker

You can soon view all your financial holdings in a single DigiLocker a/c.

Key feature: DigiLocker will automatically notify nominees upon the user's demise.

Nominees can access all holdings in one place & approach AMCs/brokers to claim assets.
🧵 DigiLocker, a digital wallet by the Govt of India, lets you store & access e-docs like Aadhaar, PAN, DL, birth/death certificates, insurance, bank & NPS statements - anytime, anywhere.

Now, you can also view MF folios & demat statements. These e-docs are valid as originals.

After becoming SEBI Chairperson, Tuhin Kanta Pandey's first public speech was on ‘India’s Growth Story: Opportunities & Prospects’. When a new leader takes charge, we look for their intent, vision & style. Here's what he said at the Moneycontrol-CNBC Global Wealth Summit. 🧵👇 Background

Tuhin Kanta Pandey is a 1987 batch IAS officer. In his 30+ yrs of experience, he served as Union Finance & Revenue Secretary and was with DIPAM & NITI Aayog.

He holds a Master’s in Economics from Punjab University & an MBA from the University of Birmingham (UK).

IndusInd Bank shares dropped 27% today.

Here👇 is a quick thread on everything you need to know about what is happening with IndusInd Bank.🧵
(1/10) IndusInd Bank noted some discrepancies that could hit its net worth by 2.35%. How?

Banks typically hedge their overnight derivative positions. If a bank has to make USD payments tomorrow, it would hedge the position today to avoid INR losses at the time of the payment. (2/10)

If you have watched Scam 1992 or The Big Bull, you probably know about the Harshad Mehta scam.

But do you know the reforms that India saw because of that scam?

Here’s a quick thread🧵👇(1/8) Dematerialization.

Mehta would get multiple loans against the same set of shares from multiple banks. He could do that because shares were traded in physical form at that time.

Dematerialization has eliminated the scope for pledging the same share with multiple lenders. (2/8)

Nassim Nicholas Taleb introduced The Lindy Effect in his book Antifragile in 2012.

The theory suggests that the chances of a new tech/idea to survive increase as their age increases.

With indices down ~20%, now might be a good time to study the Lindy Effect on the markets. 👇🧵(1/11) We wanted to see if there was any connection between a business's age and its likelihood of survival.

If the Lindy Effect works on stocks, older stocks are more likely to emerge fine from the current downturn. Here’s how we went about it and what we found. (2/11)

Warren Buffett has completed 60 years of running Berkshire Hathaway. As usual, he wrote an annual letter to Berkshire’s shareholders, and it is filled with investment nuggets and wisdom.

We spent the weekend deep-diving into it; here👇 is everything you need to know.🧵 (1/15) Buffett starts by discussing mistakes but doesn’t give details. In the past, he has listed his mistakes as and when they happened.

But he also mentions “pleasant surprises in both the potential of the business as well as the ability and fidelity of the manager.” (2/15)

Moats can be of different types.

Here’s a thread🧵 of a few Indian businesses with different types of moats. (1/6) Brand Moat: Nestle Maggi enjoys unbeaten brand loyalty in instant noodles.

Remember how it was banned in 2015 due to a health scare? Yet, when it was re-launched only months later, it reclaimed 60%+ market share very quickly. Maggi’s taste and brand loyalty are its moat. (2/6)

Budget 2025: When less is more.

Can someone earning ₹12.75 lakh take home more than someone earning ₹13 lakh?

Yes—at least to some extent.

Here’s a thread 🧵 Take ‘A’, who earns an annual salary of 12.75 lakhs. ‘A’ gets a standard deduction (SD) of 75,000, making the taxable income Rs 12 lakh.

Tax liability after Budget 2025: Nil

Here, ‘A’ is getting a full rebate on tax liability as the income is 12 lakhs or less.

Union Budget 2025: A big relief for the middle class.

No income tax till 12 lakhs under the new tax regime.

You can save more than a lakh based on your income level.

How much will you save in taxes? Read this thread🧵👇. (1/6) You have zero tax liability for up to 12 lakhs, but it doesn't mean income up to 12 lakhs is tax-exempt.

If you earn 12 lakhs or less, you will get a full rebate on your tax outgo.

If you earn over 12 lakhs, all your income above 4 lakhs is taxable.

A few examples👇. (2/6)

The Nasdaq, Nvidia, Microsoft, and other prominent AI stocks fell on Friday.

A hedge-fund-backed AI lab has emerged in China that could give them all a run for their money.
You guessed it right. It is DeepSeek.

What’s so special about it? (1/7)🧵 DeepSeek makes LLM models just like OpenAI, Google, and Meta.

What has stunned the US Big Tech is that its latest LLM model, the DeepSeek-V3, was built for less than $6 million😮.

How much is OpenAI spending on its LLM models? $5 billion a year! (2/7)

Do you know the difference between a luxury car and a brick?

You would pay a premium for a Rolls Royce but not for bricks🧱.

Premium pricing enables businesses to make more profits, but what can make bricks profitable? (1/7)🧵 Warren Buffett’s Berkshire Hathaway acquired Acme Bricks in 2000.

Acme was not a Chanel or Rolls Royce that could command hefty prices. These luxury brands can hike prices, and customers will still buy them.

But brickmakers can’t do that. So, what was Acme’s edge? (2/7)

Are you waiting for RBI rate cuts to buy a home? Whether you are a potential home loan borrower or already have one, you need to know these relatively new rules on EMIs that could save you significant amounts in interest.

Especially after RBI intervened in 2023, giving more flexibility to borrowers.

Here’s a thread🧵 These rules are for floating-rate personal loans.

Interest rates on floating-rate loans depend on benchmark rates (like RBI's repo rate). For many years, when interest rates went up, the EMI amount stayed the same, but the loan tenure increased.

It’s a relief when rates fall but tough when they rise — but that’s part of the deal.

Say you made 20% each on large-cap and SME stocks—the same returns. But would you treat them the same?

We bet your answer is a big no—and rightly so! The risk taken for each is worlds apart.

Now think of mutual funds: schemes within the same category can deliver similar returns but would have taken different risks to achieve them. How do you compare?

Risk-adjusted returns! As per SEBI's new circular, it is now mandatory for mutual funds to share it publicly.
A thread 🧵 SEBI believes the ‘Risk-Adjusted Return’ (RAR) gives a holistic picture of a mutual fund's performance. It shows how much return a scheme generates for each unit of risk taken.

That’s why all equity funds must display RARs to be shown as an ‘information ratio.’

Coldplay will do 5 concerts in India.

Concerts usually spur local economic activity. Maybe that’s why Argentina hosted 10 Coldplay gigs in 2022.

But the Coldplay concert did something else in Argentina - it introduced the ‘Coldplay Dollars.’

What are Coldplay Dollars?🧵(1/10) Let’s say a ticket to a Coldplay concert in Argentina was USD 100.

1 USD was roughly 170 Pesos at that time.

So, Argentines had to basically pay 17000 pesos. However, they were charged 22100 pesos😮.

That’s 30% higher. Why so?
(2/10)