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6 Best Liquid Mutual Funds 2022
In common terms, Best Liquid Funds are Debt Mutual Funds or rather money market Mutual Funds with the only difference being in the investment duration. Liquid Funds invest in very short money Market instruments like the Certificate of Deposit, treasury bills, commercial papers etc.
The investment duration of these funds is very short, generally ranging from a couple of days to a few weeks (it can even be one day!). The average residual maturity of liquid funds is less than 91 days as they invest in securities which individually have a maturity upto 91 days. Being a short-term Debt fund, these funds are highly suitable for investors looking for low-risk investments for short duration.
The low maturity period of best liquid funds helps fund managers to fulfil the Redemption demand of investors easily. In the market, there are various liquid fund investments available.
Why Invest in Liquid Funds?
- Liquid funds have no lock-in or very low lock-in period.
- The interest rate of liquid mutual funds is the lowest among all short-term investments due to low maturity period.
- No entry and exit loads are applicable.
- Liquid funds are a perfect solution for investors who wish to park their idle cash for a short duration without the risk of Capital Loss.
Liquid Funds better than Saving Bank Account?
Investing in liquid funds are any day a better option on investment as compared to putting money in popular saving Bank account schemes.
Owing to its familiarity and institutionalized nature of saving bank accounts, an average Indian taxpayer has more trust in them. However, it seems they are not the most popular short-term investment anymore. This is due to the rising acceptance of mutual funds by investors with different investment goals. Your hard earned money that lies in a savings bank account fetches you only 3.5% interest per annum. However, the best liquid funds have returned as high as 6.5-7.5% on an average in the past 1 year period, on an annualized Basis.
So, on returns alone, liquid funds score over a savings bank account. If you have a raise or a bonus coming your way, invest in liquid funds and party later.
Talk to our investment specialist
6 Best Liquid Funds India FY 22 - 23
Fund NAV Net Assets (Cr) 1 MO (%) 3 MO (%) 6 MO (%) 1 YR (%) 2021 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity Axis Liquid Fund Growth ₹2,406.62
↑ 0.40 ₹29,263 0.5 1.3 2.3 4.2 3.3 5.7% 30D 1M 1D UTI Liquid Cash Plan Growth ₹3,549.72
↑ 0.56 ₹32,857 0.5 1.3 2.3 4.1 3.3 5.66% 28D 28D SBI Liquid Fund Growth ₹3,387.95
↑ 0.56 ₹65,441 0.4 1.3 2.3 4.1 3.3 5.67% 1M 10D 1M 13D Aditya Birla Sun Life Liquid Fund Growth ₹348.475
↑ 0.06 ₹42,493 0.4 1.3 2.3 4.1 3.3 5.83% 1M 10D 1M 10D DSP BlackRock Liquidity Fund Growth ₹3,089.5
↑ 0.50 ₹12,226 0.4 1.3 2.3 4.1 3.3 5.68% 25D 29D IDFC Cash Fund Growth ₹2,617.29
↑ 0.47 ₹12,367 0.4 1.3 2.3 4.1 3.2 5.72% 1M 13D 1M 14D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 5 Oct 22 Liquid funds having AUM/Net Assets above 10,000 Crore and managing funds for 5 or more years. Sorted on Last 1 Calendar Year Return.
To provide a high level of liquidity with reasonable returns commensurating with low risk through a portfolio of money market and debt securities. However there can be no assurance that the investment objective of the scheme will be achieved. Axis Liquid Fund is a Debt - Liquid Fund fund was launched on 9 Oct 09. It is a fund with Low risk and has given a Below is the key information for Axis Liquid Fund Returns up to 1 year are on The investment objective of the scheme is to generate steady and reasonable income, with low risk and high level of liquidity from a portfolio of money market securities and high quality debt. UTI Liquid Cash Plan is a Debt - Liquid Fund fund was launched on 11 Dec 03. It is a fund with Low risk and has given a Below is the key information for UTI Liquid Cash Plan Returns up to 1 year are on (Erstwhile SBI - Premier Liquid Fund) To provide attractive returns to the Magnum/Unit holders either through
periodic dividends or through capital appreciation through an actively
managed portfolio of debt and money market instruments. Income may be
generated through the receipt of coupon payments, the amortization of the
discount on the debt instruments, receipt of dividends or purchase and sale of
securities in the underlying portfolio. SBI Liquid Fund is a Debt - Liquid Fund fund was launched on 22 Mar 07. It is a fund with Low risk and has given a Below is the key information for SBI Liquid Fund Returns up to 1 year are on (Erstwhile Aditya Birla Sun Life Cash Plus Fund) An Open-ended liquid scheme with the objective to provide reasonable returns at a high level of safety and liquidity through judicious investments in high quality debt and money market instruments. Aditya Birla Sun Life Liquid Fund is a Debt - Liquid Fund fund was launched on 30 Mar 04. It is a fund with Low risk and has given a Below is the key information for Aditya Birla Sun Life Liquid Fund Returns up to 1 year are on The Scheme seeks to generate reasonable returns commensurate with low risk from a portfolio constituted of money market and high quality debts DSP BlackRock Liquidity Fund is a Debt - Liquid Fund fund was launched on 23 Nov 05. It is a fund with Low risk and has given a Below is the key information for DSP BlackRock Liquidity Fund Returns up to 1 year are on To generate optimal returns with high liquidity by investing in high quality money market and debt instruments. However there is no assurance that the investment objective of the scheme will be realized. IDFC Cash Fund is a Debt - Liquid Fund fund was launched on 4 Jun 08. It is a fund with Low risk and has given a Below is the key information for IDFC Cash Fund Returns up to 1 year are on 1. Axis Liquid Fund
CAGR/Annualized return of 7% since its launch. Ranked 21 in Liquid Fund category. Return for 2021 was 3.3% , 2020 was 4.3% and 2019 was 6.6% . Axis Liquid Fund
Growth Launch Date 9 Oct 09 NAV (05 Oct 22) ₹2,406.62 ↑ 0.40 (0.02 %) Net Assets (Cr) ₹29,263 on 31 Aug 22 Category Debt - Liquid Fund AMC Axis Asset Management Company Limited Rating ☆☆☆☆ Risk Low Expense Ratio 0 Sharpe Ratio -1.93 Information Ratio 0 Alpha Ratio 0 Min Investment 500 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 5.7% Effective Maturity 1 Month 1 Day Modified Duration 30 Days Growth of 10,000 investment over the years.
Date Value 30 Sep 17 ₹10,000 30 Sep 18 ₹10,716 30 Sep 19 ₹11,488 30 Sep 20 ₹12,049 30 Sep 21 ₹12,434 30 Sep 22 ₹12,943 Returns for Axis Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 5 Oct 22 Duration Returns 1 Month 0.5% 3 Month 1.3% 6 Month 2.3% 1 Year 4.2% 3 Year 4.1% 5 Year 5.3% 10 Year 15 Year Since launch 7% Historical performance (Yearly) on absolute basis
Year Returns 2021 3.3% 2020 4.3% 2019 6.6% 2018 7.5% 2017 6.7% 2016 7.6% 2015 8.4% 2014 9.1% 2013 9.2% 2012 9.7% Fund Manager information for Axis Liquid Fund
Name Since Tenure Devang Shah 5 Nov 12 9.83 Yr. Aditya Pagaria 13 Aug 16 6.05 Yr. Data below for Axis Liquid Fund as on 31 Aug 22
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 80.51% Corporate 11.33% Government 8.16% Credit Quality
Rating Value AA 0.23% AAA 99.77% Top Securities Holdings / Portfolio
Name Holding Value Quantity Clearing Corporation Of India Ltd
CBLO/Reverse Repo | -15% ₹3,999 Cr Reliance Industries Limited
CBLO/Reverse Repo | -5% ₹1,451 Cr 91 Dtb 29092022
Sovereign Bonds | -4% ₹1,138 Cr 114,000,000
↓ -5,000,000 National Bank For Agriculture And Rural Development
Commercial Paper | -4% ₹988 Cr 20,000
↑ 20,000 Small Industries Development Bank Of India
Commercial Paper | -3% ₹889 Cr 18,000
↑ 18,000 L&T Finance Limited
Commercial Paper | -3% ₹773 Cr 15,500
↑ 15,500 Indian Bank
Certificate of Deposit | -3% ₹747 Cr 15,000 Reliance Retail Ventures Limited
Commercial Paper | -2% ₹595 Cr 12,000 Punjab National Bank
Certificate of Deposit | -2% ₹498 Cr 10,000 L&T Metro Rail (Hyderabad) Limited
Commercial Paper | -2% ₹497 Cr 10,000 2. UTI Liquid Cash Plan
CAGR/Annualized return of 6.8% since its launch. Ranked 32 in Liquid Fund category. Return for 2021 was 3.3% , 2020 was 4.2% and 2019 was 6.6% . UTI Liquid Cash Plan
Growth Launch Date 11 Dec 03 NAV (05 Oct 22) ₹3,549.72 ↑ 0.56 (0.02 %) Net Assets (Cr) ₹32,857 on 31 Aug 22 Category Debt - Liquid Fund AMC UTI Asset Management Company Ltd Rating ☆☆☆ Risk Low Expense Ratio 0.25 Sharpe Ratio -2.39 Information Ratio -5.33 Alpha Ratio -0.26 Min Investment 500 Min SIP Investment 1,500 Exit Load NIL Yield to Maturity 5.66% Effective Maturity 28 Days Modified Duration 28 Days Growth of 10,000 investment over the years.
Date Value 30 Sep 17 ₹10,000 30 Sep 18 ₹10,713 30 Sep 19 ₹11,485 30 Sep 20 ₹12,032 30 Sep 21 ₹12,417 30 Sep 22 ₹12,922 Returns for UTI Liquid Cash Plan
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 5 Oct 22 Duration Returns 1 Month 0.5% 3 Month 1.3% 6 Month 2.3% 1 Year 4.1% 3 Year 4% 5 Year 5.3% 10 Year 15 Year Since launch 6.8% Historical performance (Yearly) on absolute basis
Year Returns 2021 3.3% 2020 4.2% 2019 6.6% 2018 7.4% 2017 6.7% 2016 7.7% 2015 8.3% 2014 9.1% 2013 9.1% 2012 9.6% Fund Manager information for UTI Liquid Cash Plan
Name Since Tenure Amandeep Chopra 14 Dec 06 15.72 Yr. Amit Sharma 7 Jul 17 5.15 Yr. Data below for UTI Liquid Cash Plan as on 31 Aug 22
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 88.05% Government 7.01% Corporate 4.94% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Net Current Assets
Net Current Assets | -22% ₹6,939 Cr 91 Dtb 22092022
Sovereign Bonds | -4% ₹1,284 Cr 12,850,000,000 91 Dtb 29092022
Sovereign Bonds | -3% ₹1,028 Cr 10,300,000,000 91 DTB 27102022
Sovereign Bonds | -3% ₹994 Cr 10,000,000,000 91 DTB 03112022
Sovereign Bonds | -3% ₹844 Cr 8,500,000,000 Hindustan Petroleum Corporation Limited
Commercial Paper | -3% ₹797 Cr 8,000,000,000 91 DTB 15122022
Sovereign Bonds | -2% ₹789 Cr 8,000,000,000
↑ 8,000,000,000 91 DTB 08122022
Sovereign Bonds | -2% ₹740 Cr 7,500,000,000
↑ 7,500,000,000 Indian Bank
Certificate of Deposit | -2% ₹698 Cr 7,000,000,000
↓ -1,000,000,000 Indian Oil Corporation Limited
Commercial Paper | -2% ₹697 Cr 7,000,000,000 3. SBI Liquid Fund
CAGR/Annualized return of 6.9% since its launch. Ranked 40 in Liquid Fund category. Return for 2021 was 3.3% , 2020 was 4.2% and 2019 was 6.5% . SBI Liquid Fund
Growth Launch Date 22 Mar 07 NAV (04 Oct 22) ₹3,387.95 ↑ 0.56 (0.02 %) Net Assets (Cr) ₹65,441 on 31 Aug 22 Category Debt - Liquid Fund AMC SBI Funds Management Private Limited Rating ☆☆☆ Risk Low Expense Ratio 0.26 Sharpe Ratio -2.56 Information Ratio -4.94 Alpha Ratio -0.32 Min Investment 50,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 5.67% Effective Maturity 1 Month 13 Days Modified Duration 1 Month 10 Days Growth of 10,000 investment over the years.
Date Value 30 Sep 17 ₹10,000 30 Sep 18 ₹10,703 30 Sep 19 ₹11,458 30 Sep 20 ₹12,003 30 Sep 21 ₹12,385 30 Sep 22 ₹12,881 Returns for SBI Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 5 Oct 22 Duration Returns 1 Month 0.4% 3 Month 1.3% 6 Month 2.3% 1 Year 4.1% 3 Year 4% 5 Year 5.2% 10 Year 15 Year Since launch 6.9% Historical performance (Yearly) on absolute basis
Year Returns 2021 3.3% 2020 4.2% 2019 6.5% 2018 7.3% 2017 6.6% 2016 7.6% 2015 8.3% 2014 9% 2013 9.2% 2012 9.6% Fund Manager information for SBI Liquid Fund
Name Since Tenure R. Arun 7 May 18 4.32 Yr. Data below for SBI Liquid Fund as on 31 Aug 22
Asset Allocation
Asset Class Value Cash 96.07% Debt 3.93% Debt Sector Allocation
Sector Value Cash Equivalent 77.41% Government 17.16% Corporate 5.43% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 91 DTB 01122022
Sovereign Bonds | -6% ₹4,362 Cr 441,398,000 Treps
CBLO/Reverse Repo | -6% ₹4,026 Cr 91 DTB 24112022
Sovereign Bonds | -5% ₹3,695 Cr 373,500,000 Canara Bank
Certificate of Deposit | -4% ₹2,988 Cr 60,000 Small Industries Development Bank Of India
Commercial Paper | -4% ₹2,983 Cr 60,000 Housing Development Finance Corporation Limited
Commercial Paper | -4% ₹2,983 Cr 60,000 91 DTB 10112022
Sovereign Bonds | -4% ₹2,563 Cr 258,487,100 Reliance Jio Infocomm Limited
Commercial Paper | -4% ₹2,500 Cr 50,000 HDFC Bank Limited
Certificate of Deposit | -3% ₹1,999 Cr 40,000 Indian Oil Corporation Limited
Commercial Paper | -3% ₹1,998 Cr 40,000 4. Aditya Birla Sun Life Liquid Fund
CAGR/Annualized return of 7% since its launch. Ranked 15 in Liquid Fund category. Return for 2021 was 3.3% , 2020 was 4.3% and 2019 was 6.7% . Aditya Birla Sun Life Liquid Fund
Growth Launch Date 30 Mar 04 NAV (04 Oct 22) ₹348.475 ↑ 0.06 (0.02 %) Net Assets (Cr) ₹42,493 on 31 Aug 22 Category Debt - Liquid Fund AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆☆ Risk Low Expense Ratio 0.33 Sharpe Ratio -2.01 Information Ratio -4.54 Alpha Ratio -0.28 Min Investment 5,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 5.83% Effective Maturity 1 Month 10 Days Modified Duration 1 Month 10 Days Growth of 10,000 investment over the years.
Date Value 30 Sep 17 ₹10,000 30 Sep 18 ₹10,711 30 Sep 19 ₹11,491 30 Sep 20 ₹12,052 30 Sep 21 ₹12,434 30 Sep 22 ₹12,938 Returns for Aditya Birla Sun Life Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 5 Oct 22 Duration Returns 1 Month 0.4% 3 Month 1.3% 6 Month 2.3% 1 Year 4.1% 3 Year 4% 5 Year 5.3% 10 Year 15 Year Since launch 7% Historical performance (Yearly) on absolute basis
Year Returns 2021 3.3% 2020 4.3% 2019 6.7% 2018 7.4% 2017 6.7% 2016 7.7% 2015 8.4% 2014 9.2% 2013 9.3% 2012 9.7% Fund Manager information for Aditya Birla Sun Life Liquid Fund
Name Since Tenure Sunaina Cunha 15 Jul 11 11.14 Yr. Kaustubh Gupta 15 Jul 11 11.14 Yr. Sanjay Pawar 1 Jul 22 0.17 Yr. Harshil Suvarnkar 9 Jun 21 1.23 Yr. Data below for Aditya Birla Sun Life Liquid Fund as on 31 Aug 22
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 73.49% Government 15.43% Corporate 11.08% Credit Quality
Rating Value AA 0.07% AAA 99.93% Top Securities Holdings / Portfolio
Name Holding Value Quantity Reverse Repo
CBLO/Reverse Repo | -17% ₹7,705 Cr Net Receivables / (Payables)
CBLO | -5% -₹2,107 Cr Reliance Jio Infocomm Limited
Commercial Paper | -3% ₹1,241 Cr 25,000 Punjab National Bank
Certificate of Deposit | -2% ₹1,143 Cr 23,000 Indian Bank
Certificate of Deposit | -2% ₹1,034 Cr 20,740
↓ -9,260 The Federal Bank Limited
Certificate of Deposit | -2% ₹990 Cr 20,000 Adani Ports And SPecial Economic Zone Limited
Commercial Paper | -2% ₹699 Cr 14,000 Adani Ports And Special Economic Zone Limited
Commercial Paper | -2% ₹698 Cr 14,000
↑ 14,000 Indian Bank
Certificate of Deposit | -1% ₹695 Cr 14,000
↑ 14,000 Reliance Retail Ventures Limited
Commercial Paper | -1% ₹692 Cr 14,000
↑ 3,000 5. DSP BlackRock Liquidity Fund
CAGR/Annualized return of 6.9% since its launch. Ranked 36 in Liquid Fund category. Return for 2021 was 3.3% , 2020 was 4.2% and 2019 was 6.5% . DSP BlackRock Liquidity Fund
Growth Launch Date 23 Nov 05 NAV (04 Oct 22) ₹3,089.5 ↑ 0.50 (0.02 %) Net Assets (Cr) ₹12,226 on 31 Aug 22 Category Debt - Liquid Fund AMC DSP BlackRock Invmt Managers Pvt. Ltd. Rating ☆☆☆ Risk Low Expense Ratio 0.24 Sharpe Ratio -2.39 Information Ratio -3.37 Alpha Ratio -0.26 Min Investment 1,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 5.68% Effective Maturity 29 Days Modified Duration 25 Days Growth of 10,000 investment over the years.
Date Value 30 Sep 17 ₹10,000 30 Sep 18 ₹10,710 30 Sep 19 ₹11,471 30 Sep 20 ₹12,013 30 Sep 21 ₹12,393 30 Sep 22 ₹12,898 Returns for DSP BlackRock Liquidity Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 5 Oct 22 Duration Returns 1 Month 0.4% 3 Month 1.3% 6 Month 2.3% 1 Year 4.1% 3 Year 4% 5 Year 5.2% 10 Year 15 Year Since launch 6.9% Historical performance (Yearly) on absolute basis
Year Returns 2021 3.3% 2020 4.2% 2019 6.5% 2018 7.4% 2017 6.6% 2016 7.6% 2015 8.3% 2014 9% 2013 9.2% 2012 9.7% Fund Manager information for DSP BlackRock Liquidity Fund
Name Since Tenure Kedar Karnik 17 Jul 16 6.13 Yr. Karan Mundhra 31 May 21 1.25 Yr. Data below for DSP BlackRock Liquidity Fund as on 31 Aug 22
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 81.73% Government 13.4% Corporate 4.87% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Treps / Reverse Repo Investments / Corporate Debt Repo
CBLO/Reverse Repo | -22% ₹2,668 Cr Indian Oil Corporation Limited
Commercial Paper | -6% ₹697 Cr 14,000 182 Dtb 22092022
Sovereign Bonds | -4% ₹455 Cr 45,500,000 Indian Bank
Certificate of Deposit | -3% ₹399 Cr 8,000 Housing Development Finance Corporation Limited
Commercial Paper | -2% ₹300 Cr 6,000 Canara Bank
Certificate of Deposit | -2% ₹299 Cr 6,000 HDFC Bank Limited
Certificate of Deposit | -2% ₹299 Cr 6,000 TATA Steel Limited
Commercial Paper | -2% ₹299 Cr 6,000 Indian Oil Corporation Limited
Commercial Paper | -2% ₹225 Cr 4,500 Indian Bank
Certificate of Deposit | -2% ₹199 Cr 4,000 6. IDFC Cash Fund
CAGR/Annualized return of 6.9% since its launch. Ranked 26 in Liquid Fund category. Return for 2021 was 3.2% , 2020 was 4% and 2019 was 6.3% . IDFC Cash Fund
Growth Launch Date 4 Jun 08 NAV (04 Oct 22) ₹2,617.29 ↑ 0.47 (0.02 %) Net Assets (Cr) ₹12,367 on 31 Aug 22 Category Debt - Liquid Fund AMC IDFC Asset Management Company Limited Rating ☆☆☆ Risk Low Expense Ratio 0.19 Sharpe Ratio -2.64 Information Ratio -5.99 Alpha Ratio -0.27 Min Investment 100 Min SIP Investment 100 Exit Load NIL Yield to Maturity 5.72% Effective Maturity 1 Month 14 Days Modified Duration 1 Month 13 Days Growth of 10,000 investment over the years.
Date Value 30 Sep 17 ₹10,000 30 Sep 18 ₹10,707 30 Sep 19 ₹11,447 30 Sep 20 ₹11,971 30 Sep 21 ₹12,350 30 Sep 22 ₹12,849 Returns for IDFC Cash Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 5 Oct 22 Duration Returns 1 Month 0.4% 3 Month 1.3% 6 Month 2.3% 1 Year 4.1% 3 Year 3.9% 5 Year 5.1% 10 Year 15 Year Since launch 6.9% Historical performance (Yearly) on absolute basis
Year Returns 2021 3.2% 2020 4% 2019 6.3% 2018 7.3% 2017 6.6% 2016 7.6% 2015 8.4% 2014 9.1% 2013 9.2% 2012 9.6% Fund Manager information for IDFC Cash Fund
Name Since Tenure Harshal Joshi 15 Sep 15 6.96 Yr. Brijesh Shah 1 Dec 21 0.75 Yr. Data below for IDFC Cash Fund as on 31 Aug 22
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 73.56% Corporate 21.51% Government 4.92% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Triparty Repo
CBLO/Reverse Repo | -23% ₹2,987 Cr National Bank For Agriculture And Rural Development
Commercial Paper | -8% ₹988 Cr 100,000,000
↑ 100,000,000 HDFC Bank Limited
Certificate of Deposit | -4% ₹570 Cr 57,500,000 Bank Of Baroda
Certificate of Deposit | -4% ₹495 Cr 50,000,000 National Bank For Agriculture And Rural Development
Commercial Paper | -4% ₹494 Cr 50,000,000 Reliance Jio Infocomm Limited
Commercial Paper | -4% ₹493 Cr 50,000,000
↑ 50,000,000 HDFC Bank Limited
Certificate of Deposit | -3% ₹448 Cr 45,000,000 Canara Bank
Certificate of Deposit | -3% ₹398 Cr 40,000,000 Kotak Mahindra Bank Limited **
Certificate of Deposit | -3% ₹396 Cr 40,000,000
↑ 40,000,000 Bajaj Finance Limited
Commercial Paper | -3% ₹346 Cr 35,000,000
How to evaluate Liquid Mutual Funds?
When looking for a liquid mutual fund, the past return should not be the only Factor for consideration. Other factors like fund size, track record, credit quality of Underlying securities should also be kept in mind.
1. Investment Plans
Liquid funds come with different plans like a daily dividend plan, weekly dividend plan, monthly dividend plan and growth plans. In the growth option, profits made by the scheme are invested back into it. This results in the NAV (Net Asset Value) of the scheme rising over time. In the dividend option, the profits made by the fund are not re-invested. Dividends are distributed to the investor from time to time. Investors can choose their plan as per their convenience and liquidity needs.
2. Expense Ratio
Mutual funds charge a fee to manage your funds called an expense ratio. As per SEBI norms, the upper limit of expense ratio is 2.25%. In case of liquid funds, they maintain a lower expense ratio to provide relatively higher returns over a short period of time.
3. Investment Horizon
Plan your investment horizon. Liquid funds are exclusively meant to invest surplus cash over a very short period of time that is for 91 days. So, if you have an idle cash, you can invest here for a short period and earn better returns than bank Savings Account. In case you have a longer investment horizon of up to 1 year, then you may consider investing in short duration funds to get relatively higher returns.
Features of Liquid Mutual Funds
1. Exit Load Of Liquid Mutual Funds
Considering the fact that liquid mutual funds are short-term investments with a low maturity period, the majority of the funds under this category do not levy any exit load on redemption. Also, if there exists any exit load, it is very nominal and usually not more than a week. Liquid funds generally do not have an exit load given they are very short investment products.
2. Volatility Of Liquid Fund Investment
Generally, the volatility of liquid funds is low as the investment lasts for a few days to weeks. So, the risk of loss in investment is quite less. However, it is suggested to make a liquid fund investment considering the market condition to avoid the opportunity of loss.
3. Lock-in Period Of Best Liquid Funds
Given that liquid mutual funds are very short-term investment options, liquid funds do not have any lock-in period. Liquid Funds can be invested for a time period as short as one day going upto a couple of weeks.
4. Liquid Fund Returns
Liquid funds are one of the best short-term investments during a high Inflation period. In the high inflation period, the interest rate on the liquid fund is high. Thus, helping liquid mutual funds to earn good returns. The liquid fund returns are usually higher than that of other traditional investments like bank fixed deposits or savings accounts. However, it is suggested to invest in best liquid funds choosing a right option (growth, dividend payout, dividend re-investment) suiting your needs.
5. Liquid Funds Taxation
Generally, liquid fund returns receive in the form of dividends are not taxed in the hands of investors. However, a Dividend Distribution Tax (DDT) of approximately 28% is deducted by the mutual fund company from the dividends. Moreover, for the investors who have opted for growth option, a short-term Capital Gain tax is deducted as per the individual’s tax slab. This tax Deduction is same as that of a savings account.
How to Invest in Liquid Funds Online?
Open Free Investment Account for Lifetime at Fincash.com
Complete your Registration and KYC Process
Upload Documents (PAN, Aadhaar, etc.). And, You are Ready to Invest!
Due to the lack of awareness about liquid funds, people don’t invest in them and instead keep huge sums in a savings account. But, it’s never too late to begin something good. So, invest in best liquid funds today!
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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