- . Meaning
a). Idle Funds are basically money that is not invested, and therefore, earning no interest or investment income
b). They are the funds that are not deposited, and thus, not participating in the Economic Markets
c). It is often coined as “Wasted Funds” as there is no appreciation in value
2). What Can Be Done?
i). For Companies
a). The funds can be effectively used for Capital Expansion & reduce dependence on Borrowed Funds
b). They can also play an excellent role in Inventory Management
c). It can help the company acquire better acquisition opportunities, buying the right target at the right time.
d). Finally, it can also help the company generate a secondary source of income by further investing into Return Generating Assets
ii). For Individuals
a). Idle funds for individuals is a subjective matter & a part of personal choice
b). While some like to play it safe by investing in risk-free or low risk funds, some like to go for investing in funds better returns and higher risks
c). Goals, Objectives and Targets should be chalked out and a plan should be identified
d). While short-term and mid-term investments provide liquidity for exigencies, long-term investments assist in taking care of large expenses (buying a property, etc.)
