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6 Best Liquid Mutual Funds 2023
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 23 - 24
Fund NAV Net Assets (Cr) 1 MO (%) 3 MO (%) 6 MO (%) 1 YR (%) 2022 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity Axis Liquid Fund Growth ₹2,456.51
↑ 0.53 ₹29,674 0.5 1.6 3.1 5.1 4.9 6.47% 1M 4D 1M 5D UTI Liquid Cash Plan Growth ₹3,622.46
↑ 0.77 ₹23,212 0.5 1.6 3 5.1 4.8 6.38% 1M 3D 1M 3D DSP BlackRock Liquidity Fund Growth ₹3,153.15
↑ 0.62 ₹11,186 0.5 1.6 3 5.1 4.8 6.61% 1M 6D 1M 10D Aditya Birla Sun Life Liquid Fund Growth ₹355.695
↑ 0.09 ₹39,953 0.5 1.6 3 5.1 4.8 6.81% 1M 28D 1M 28D IDFC Cash Fund Growth ₹2,670.8
↑ 0.53 ₹11,163 0.5 1.6 3 5.1 4.8 6.6% 25D 26D Nippon India Liquid Fund Growth ₹5,393.14
↑ 1.14 ₹25,438 0.5 1.6 3 5 4.8 6.58% 1M 13D 1M 16D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 1 Feb 23 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 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 (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 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 (Erstwhile Reliance Liquid Fund - Treasury Plan) The investment objective of the scheme is to generate optimal returns consistent with moderate levels of risk and high liquidity. Accordingly, investments shall predominantly be made in Debt and Money Market Instruments. Nippon India Liquid Fund is a Debt - Liquid Fund fund was launched on 9 Dec 03. It is a fund with Low risk and has given a Below is the key information for Nippon India Liquid 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 2022 was 4.9% , 2021 was 3.3% and 2020 was 4.3% . Axis Liquid Fund
Growth Launch Date 9 Oct 09 NAV (01 Feb 23) ₹2,456.51 ↑ 0.53 (0.02 %) Net Assets (Cr) ₹29,674 on 31 Dec 22 Category Debt - Liquid Fund AMC Axis Asset Management Company Limited Rating ☆☆☆☆ Risk Low Expense Ratio 0 Sharpe Ratio -0.7 Information Ratio 0 Alpha Ratio 0 Min Investment 500 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 6.47% Effective Maturity 1 Month 5 Days Modified Duration 1 Month 4 Days Growth of 10,000 investment over the years.
Date Value 31 Jan 18 ₹10,000 31 Jan 19 ₹10,751 31 Jan 20 ₹11,445 31 Jan 21 ₹11,911 31 Jan 22 ₹12,308 31 Jan 23 ₹12,940 Returns for Axis Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 1 Feb 23 Duration Returns 1 Month 0.5% 3 Month 1.6% 6 Month 3.1% 1 Year 5.1% 3 Year 4.2% 5 Year 5.3% 10 Year 15 Year Since launch 7% Historical performance (Yearly) on absolute basis
Year Returns 2022 4.9% 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% Fund Manager information for Axis Liquid Fund
Name Since Tenure Devang Shah 5 Nov 12 10.16 Yr. Aditya Pagaria 13 Aug 16 6.39 Yr. Data below for Axis Liquid Fund as on 31 Dec 22
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 76.48% Government 15.35% Corporate 8.17% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Clearing Corporation Of India Ltd
CBLO/Reverse Repo | -12% ₹3,751 Cr 91 DTB 02022023
Sovereign Bonds | -4% ₹1,142 Cr 114,575,900 National Bank For Agriculture And Rural Development
Commercial Paper | -3% ₹1,022 Cr 20,500 91 DTB 16032023
Sovereign Bonds | -3% ₹965 Cr 97,500,000 Housing Development Finance Corporation Limited
Commercial Paper | -3% ₹898 Cr 17,964 National Bank For Agriculture And Rural Development
Certificate of Deposit | -3% ₹821 Cr 16,500 Punjab National Bank
Certificate of Deposit | -2% ₹744 Cr 15,000 Tata Steel Ltd
Commercial Paper | -2% ₹742 Cr 15,000
↑ 15,000 Aditya Birla Finance Limited
Commercial Paper | -2% ₹741 Cr 15,000 Export-Import Bank Of India
Commercial Paper | -2% ₹697 Cr 14,000 2. UTI Liquid Cash Plan
CAGR/Annualized return of 6.8% since its launch. Ranked 32 in Liquid Fund category. Return for 2022 was 4.8% , 2021 was 3.3% and 2020 was 4.2% . UTI Liquid Cash Plan
Growth Launch Date 11 Dec 03 NAV (01 Feb 23) ₹3,622.46 ↑ 0.77 (0.02 %) Net Assets (Cr) ₹23,212 on 31 Dec 22 Category Debt - Liquid Fund AMC UTI Asset Management Company Ltd Rating ☆☆☆ Risk Low Expense Ratio 0.23 Sharpe Ratio -1.16 Information Ratio -4.87 Alpha Ratio -0.24 Min Investment 500 Min SIP Investment 1,500 Exit Load NIL Yield to Maturity 6.38% Effective Maturity 1 Month 3 Days Modified Duration 1 Month 3 Days Growth of 10,000 investment over the years.
Date Value 31 Jan 18 ₹10,000 31 Jan 19 ₹10,750 31 Jan 20 ₹11,441 31 Jan 21 ₹11,897 31 Jan 22 ₹12,294 31 Jan 23 ₹12,919 Returns for UTI Liquid Cash Plan
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 1 Feb 23 Duration Returns 1 Month 0.5% 3 Month 1.6% 6 Month 3% 1 Year 5.1% 3 Year 4.1% 5 Year 5.3% 10 Year 15 Year Since launch 6.8% Historical performance (Yearly) on absolute basis
Year Returns 2022 4.8% 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% Fund Manager information for UTI Liquid Cash Plan
Name Since Tenure Amandeep Chopra 14 Dec 06 16.06 Yr. Amit Sharma 7 Jul 17 5.49 Yr. Data below for UTI Liquid Cash Plan as on 31 Dec 22
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 75.85% Government 15.6% Corporate 8.55% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Net Current Assets
Net Current Assets | -25% ₹7,594 Cr National Bank For Agriculture And Rural Development
Commercial Paper | -5% ₹1,584 Cr 16,000,000,000
↓ -1,000,000,000 Housing Development Finance Corporation Limited
Commercial Paper | -2% ₹742 Cr 7,500,000,000 National Bank For Agriculture And Rural Development
Commercial Paper | -2% ₹698 Cr 7,000,000,000 Canara Bank
Certificate of Deposit | -2% ₹673 Cr 6,750,000,000
↑ 1,750,000,000 182 DTB 19012023
Sovereign Bonds | -2% ₹590 Cr 5,900,000,000
↑ 5,900,000,000 HDFC Bank Limited
Certificate of Deposit | -2% ₹500 Cr 5,000,000,000 Mangalore Refinery & Petrochemicals Limited
Commercial Paper | -2% ₹500 Cr 5,000,000,000
↑ 5,000,000,000 91 DTB 19012023
Sovereign Bonds | -2% ₹500 Cr 5,000,000,000 Union Bank Of India
Certificate of Deposit | -2% ₹500 Cr 5,000,000,000 3. DSP BlackRock Liquidity Fund
CAGR/Annualized return of 6.9% since its launch. Ranked 36 in Liquid Fund category. Return for 2022 was 4.8% , 2021 was 3.3% and 2020 was 4.2% . DSP BlackRock Liquidity Fund
Growth Launch Date 23 Nov 05 NAV (01 Feb 23) ₹3,153.15 ↑ 0.62 (0.02 %) Net Assets (Cr) ₹11,186 on 31 Dec 22 Category Debt - Liquid Fund AMC DSP BlackRock Invmt Managers Pvt. Ltd. Rating ☆☆☆ Risk Low Expense Ratio 0.24 Sharpe Ratio -1.24 Information Ratio -3.04 Alpha Ratio -0.24 Min Investment 1,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 6.61% Effective Maturity 1 Month 10 Days Modified Duration 1 Month 6 Days Growth of 10,000 investment over the years.
Date Value 31 Jan 18 ₹10,000 31 Jan 19 ₹10,747 31 Jan 20 ₹11,424 31 Jan 21 ₹11,878 31 Jan 22 ₹12,270 31 Jan 23 ₹12,893 Returns for DSP BlackRock Liquidity Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 1 Feb 23 Duration Returns 1 Month 0.5% 3 Month 1.6% 6 Month 3% 1 Year 5.1% 3 Year 4.1% 5 Year 5.2% 10 Year 15 Year Since launch 6.9% Historical performance (Yearly) on absolute basis
Year Returns 2022 4.8% 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% Fund Manager information for DSP BlackRock Liquidity Fund
Name Since Tenure Kedar Karnik 17 Jul 16 6.46 Yr. Karan Mundhra 31 May 21 1.59 Yr. Data below for DSP BlackRock Liquidity Fund as on 31 Dec 22
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 65.07% Government 25.28% Corporate 9.65% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Treps / Reverse Repo Investments / Corporate Debt Repo
CBLO/Reverse Repo | -7% ₹856 Cr 91 DTB 09032023
Sovereign Bonds | -6% ₹743 Cr 75,000,000 National Bank for Agriculture and Rural Development
Commercial Paper | -4% ₹493 Cr 10,000
↑ 10,000 Small Industries Development Bank of India
Commercial Paper | -4% ₹493 Cr 10,000
↑ 10,000 91 DTB 09022023
Sovereign Bonds | -3% ₹448 Cr 45,000,000 91 DTB 16032023
Sovereign Bonds | -3% ₹445 Cr 45,000,000 Canara Bank
Certificate of Deposit | -3% ₹419 Cr 8,500
↑ 8,500 Indian Bank
Certificate of Deposit | -3% ₹394 Cr 8,000
↑ 8,000 Small Industries Development Bank Of India
Commercial Paper | -3% ₹374 Cr 7,500 HDFC Bank Limited
Certificate of Deposit | -2% ₹325 Cr 6,500 4. Aditya Birla Sun Life Liquid Fund
CAGR/Annualized return of 7% since its launch. Ranked 15 in Liquid Fund category. Return for 2022 was 4.8% , 2021 was 3.3% and 2020 was 4.3% . Aditya Birla Sun Life Liquid Fund
Growth Launch Date 30 Mar 04 NAV (01 Feb 23) ₹355.695 ↑ 0.09 (0.02 %) Net Assets (Cr) ₹39,953 on 31 Dec 22 Category Debt - Liquid Fund AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆☆ Risk Low Expense Ratio 0.33 Sharpe Ratio -1.28 Information Ratio -4.2 Alpha Ratio -0.26 Min Investment 5,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 6.81% Effective Maturity 1 Month 28 Days Modified Duration 1 Month 28 Days Growth of 10,000 investment over the years.
Date Value 31 Jan 18 ₹10,000 31 Jan 19 ₹10,749 31 Jan 20 ₹11,447 31 Jan 21 ₹11,915 31 Jan 22 ₹12,309 31 Jan 23 ₹12,935 Returns for Aditya Birla Sun Life Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 1 Feb 23 Duration Returns 1 Month 0.5% 3 Month 1.6% 6 Month 3% 1 Year 5.1% 3 Year 4.2% 5 Year 5.3% 10 Year 15 Year Since launch 7% Historical performance (Yearly) on absolute basis
Year Returns 2022 4.8% 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% Fund Manager information for Aditya Birla Sun Life Liquid Fund
Name Since Tenure Sunaina Cunha 15 Jul 11 11.47 Yr. Kaustubh Gupta 15 Jul 11 11.47 Yr. Sanjay Pawar 1 Jul 22 0.5 Yr. Harshil Suvarnkar 9 Jun 21 1.56 Yr. Data below for Aditya Birla Sun Life Liquid Fund as on 31 Dec 22
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 69.36% Government 18.82% Corporate 11.82% Credit Quality
Rating Value AA 0.61% AAA 99.39% Top Securities Holdings / Portfolio
Name Holding Value Quantity 91 DTB 30032023
Sovereign Bonds | -17% ₹8,481 Cr 858,689,700
↑ 858,689,700 Bank Of Maharashtra
Certificate of Deposit | -4% ₹1,734 Cr 35,000
↑ 35,000 Union Bank Of India
Certificate of Deposit | -3% ₹1,587 Cr 32,000
↑ 32,000 Reverse Repo
CBLO/Reverse Repo | -3% ₹1,495 Cr Net Receivables / (Payables)
CBLO | -3% -₹1,488 Cr Union Bank Of India
Certificate of Deposit | -3% ₹1,399 Cr 28,000 Reliance Jio Infocomm Limited
Commercial Paper | -3% ₹1,248 Cr 25,000 National Bank for Agriculture and Rural Development
Commercial Paper | -2% ₹1,010 Cr 20,500
↑ 20,500 Indian Bank
Certificate of Deposit | -2% ₹995 Cr 20,000
↑ 20,000 Adani Ports & Special Economic Zone
Commercial Paper | -2% ₹990 Cr 20,000
↑ 20,000 5. IDFC Cash Fund
CAGR/Annualized return of 6.9% since its launch. Ranked 26 in Liquid Fund category. Return for 2022 was 4.8% , 2021 was 3.2% and 2020 was 4% . IDFC Cash Fund
Growth Launch Date 4 Jun 08 NAV (01 Feb 23) ₹2,670.8 ↑ 0.53 (0.02 %) Net Assets (Cr) ₹11,163 on 31 Dec 22 Category Debt - Liquid Fund AMC IDFC Asset Management Company Limited Rating ☆☆☆ Risk Low Expense Ratio 0.19 Sharpe Ratio -1.43 Information Ratio 0 Alpha Ratio 0 Min Investment 100 Min SIP Investment 100 Exit Load NIL Yield to Maturity 6.6% Effective Maturity 26 Days Modified Duration 25 Days Growth of 10,000 investment over the years.
Date Value 31 Jan 18 ₹10,000 31 Jan 19 ₹10,735 31 Jan 20 ₹11,396 31 Jan 21 ₹11,836 31 Jan 22 ₹12,225 31 Jan 23 ₹12,844 Returns for IDFC Cash Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 1 Feb 23 Duration Returns 1 Month 0.5% 3 Month 1.6% 6 Month 3% 1 Year 5.1% 3 Year 4.1% 5 Year 5.1% 10 Year 15 Year Since launch 6.9% Historical performance (Yearly) on absolute basis
Year Returns 2022 4.8% 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% Fund Manager information for IDFC Cash Fund
Name Since Tenure Harshal Joshi 15 Sep 15 7.3 Yr. Brijesh Shah 1 Dec 21 1.08 Yr. Data below for IDFC Cash Fund as on 31 Dec 22
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 68.41% Corporate 18.23% Government 13.37% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Triparty Repo
CBLO/Reverse Repo | -20% ₹2,219 Cr National Bank For Agriculture And Rural Development
Debentures | -9% ₹996 Cr 99,500,000 HDFC Bank Limited
Certificate of Deposit | -5% ₹504 Cr 50,500,000 Hindustan Petroleum Corporation Limited
Commercial Paper | -4% ₹499 Cr 50,000,000 Union Bank Of India
Certificate of Deposit | -4% ₹498 Cr 50,000,000
↑ 50,000,000 Tata Capital Financial Services Limited
Commercial Paper | -4% ₹398 Cr 40,000,000 Reliance Retail Ventures Limited
Commercial Paper | -4% ₹397 Cr 40,000,000 Kotak Mahindra Bank Limited (Formerly Kotak Mahindra Finance Limited)
Certificate of Deposit | -3% ₹348 Cr 35,000,000
↑ 35,000,000 Bank Of Baroda
Certificate of Deposit | -3% ₹348 Cr 35,000,000 Reliance Retail Ventures Limited
Commercial Paper | -3% ₹298 Cr 30,000,000 6. Nippon India Liquid Fund
CAGR/Annualized return of 6.8% since its launch. Ranked 11 in Liquid Fund category. Return for 2022 was 4.8% , 2021 was 3.2% and 2020 was 4.3% . Nippon India Liquid Fund
Growth Launch Date 9 Dec 03 NAV (01 Feb 23) ₹5,393.14 ↑ 1.14 (0.02 %) Net Assets (Cr) ₹25,438 on 31 Dec 22 Category Debt - Liquid Fund AMC Nippon Life Asset Management Ltd. Rating ☆☆☆☆ Risk Low Expense Ratio 0.32 Sharpe Ratio -1.39 Information Ratio 0 Alpha Ratio 0 Min Investment 100 Min SIP Investment 100 Exit Load NIL Yield to Maturity 6.58% Effective Maturity 1 Month 16 Days Modified Duration 1 Month 13 Days Growth of 10,000 investment over the years.
Date Value 31 Jan 18 ₹10,000 31 Jan 19 ₹10,751 31 Jan 20 ₹11,450 31 Jan 21 ₹11,914 31 Jan 22 ₹12,305 31 Jan 23 ₹12,923 Returns for Nippon India Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 1 Feb 23 Duration Returns 1 Month 0.5% 3 Month 1.6% 6 Month 3% 1 Year 5% 3 Year 4.1% 5 Year 5.3% 10 Year 15 Year Since launch 6.8% Historical performance (Yearly) on absolute basis
Year Returns 2022 4.8% 2021 3.2% 2020 4.3% 2019 6.7% 2018 7.4% 2017 6.7% 2016 7.7% 2015 8.3% 2014 9.1% 2013 9.2% Fund Manager information for Nippon India Liquid Fund
Name Since Tenure Anju Chhajer 1 Oct 13 9.25 Yr. Siddharth Deb 1 Mar 22 0.84 Yr. Kinjal Desai 25 May 18 4.61 Yr. Akshay Sharma 1 Dec 22 0.08 Yr. Data below for Nippon India Liquid Fund as on 31 Dec 22
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 74.11% Government 17.23% Corporate 8.66% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 91 DTB 16022023
Sovereign Bonds | -6% ₹1,766 Cr 177,500,000
↓ -7,500,000 91 DTB 16032023
Sovereign Bonds | -6% ₹1,658 Cr 167,500,000 Hindustan Zinc Limited
Commercial Paper | -4% ₹1,198 Cr 24,000 National Bank For Agriculture And Rural Development
Commercial Paper | -4% ₹1,191 Cr 24,000 Reverse Repo
CBLO/Reverse Repo | -3% ₹988 Cr 91 DTB 09022023
Sovereign Bonds | -3% ₹981 Cr 98,500,000
↓ -4,500,000 182 DTB 02022023
Sovereign Bonds | -3% ₹803 Cr 80,500,000
↓ -9,500,000 Reliance Retail Ventures Limited
Commercial Paper | -3% ₹749 Cr 15,000 91 DTB 02022023
Sovereign Bonds | -2% ₹598 Cr 60,000,000
↓ -15,000,000 HDFC Bank Limited
Certificate of Deposit | -2% ₹550 Cr 11,000
↑ 1,000
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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