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6 Best Liquid Mutual Funds 2019
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.
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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.
6 Best Liquid Funds India FY 19 - 20
Fund NAV Net Assets (Cr) 1 MO (%) 3 MO (%) 6 MO (%) 1 YR (%) 2018 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity Reliance Liquid Fund Growth ₹4,636.62
↑ 0.91 ₹34,422 0.6 1.8 3.6 7.5 7.4 0% Aditya Birla Sun Life Liquid Fund Growth ₹305.415
↑ 0.07 ₹53,023 0.6 1.8 3.6 7.5 7.4 7.29% 1M 6D 1M 6D Axis Liquid Fund Growth ₹2,108.31
↑ 0.44 ₹30,460 0.6 1.8 3.6 7.5 7.5 0% Tata Liquid Fund Growth ₹2,992.28
↑ 0.55 ₹18,479 0.6 1.8 3.6 7.4 7.4 7.45% 1M 10D 1M 10D ICICI Prudential Liquid Fund Growth ₹281.175
↑ 0.05 ₹57,392 0.6 1.8 3.6 7.4 7.4 7.18% 1M 1D 1M 3D UTI Liquid Cash Plan Growth ₹3,114.16
↑ 0.60 ₹36,731 0.6 1.8 3.6 7.5 7.4 6.98% 1M 15D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 17 Jul 19 Liquid funds having AUM/Net Assets above 10,000 Crore and managing funds for 5 or more years.
(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. Reliance 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 Reliance 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 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 (Erstwhile TATA Money Market Fund ) To create a highly liquid portfolio of money market instruments so as to provide reasonable returns and high liquidity to the unitholders. Tata Liquid Fund is a Debt - Liquid Fund fund was launched on 1 Sep 04. It is a fund with Low risk and has given a Below is the key information for Tata Liquid Fund Returns up to 1 year are on (Erstwhile ICICI Prudential Liquid Plan) To provide reasonable returns, commensurate with low risk while providing a high level of liquidity, through investments made primarily in money market and debt securities. ICICI Prudential Liquid Fund is a Debt - Liquid Fund fund was launched on 17 Nov 05. It is a fund with Low risk and has given a Below is the key information for ICICI Prudential 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 1. Reliance Liquid Fund
CAGR/Annualized return of 7.4% since its launch. Ranked 11 in Liquid Fund category. Return for 2018 was 7.4% , 2017 was 6.7% and 2016 was 7.7% . Reliance Liquid Fund
Growth Launch Date 9 Dec 03 NAV (17 Jul 19) ₹4,636.62 ↑ 0.91 (0.02 %) Net Assets (Cr) ₹34,422 on 30 Apr 19 Category Debt - Liquid Fund AMC Reliance Nippon Life Asset Management Ltd. Rating ☆☆☆☆ Risk Low Expense Ratio 0.18 Sharpe Ratio 19.29 Information Ratio -0.12 Alpha Ratio 0.77 Min Investment 100 Min SIP Investment 100 Exit Load NIL Yield to Maturity 0% Effective Maturity Modified Duration Growth of 10,000 investment over the years.
Date Value 30 Jun 14 ₹10,000 30 Jun 15 ₹10,884 30 Jun 16 ₹11,764 30 Jun 17 ₹12,578 30 Jun 18 ₹13,448 30 Jun 19 ₹14,465 Returns for Reliance Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 17 Jul 19 Duration Returns 1 Month 0.6% 3 Month 1.8% 6 Month 3.6% 1 Year 7.5% 3 Year 7.1% 5 Year 7.6% 10 Year 15 Year Since launch 7.4% Historical performance (Yearly) on absolute basis
Year Returns 2018 7.4% 2017 6.7% 2016 7.7% 2015 8.3% 2014 9.1% 2013 9.2% 2012 9.7% 2011 8.9% 2010 5.3% 2009 5.5% Fund Manager information for Reliance Liquid Fund
Name Since Tenure Anju Chhajer 1 Oct 13 5.5 Yr. Kinjal Desai 25 May 18 0.85 Yr. Data below for Reliance Liquid Fund as on 30 Apr 19
Asset Allocation
Asset Class Value Cash 100% Other 0% Debt Sector Allocation
Sector Value Cash Equivalent 98.93% Corporate 1.07% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Net Current Assets
Net Current Assets | -13% -₹3,389 Cr Canara Bank
Certificate of Deposit | -6% ₹1,493 Cr 150,000
↑ 150,000 BANK OF BARODA
Certificate of Deposit | -3% ₹770 Cr 77,500
↑ 27,500 91 DTB 26092019
Sovereign Bonds | -3% ₹735 Cr 74,500,000
↑ 74,500,000 91 DTB 01082019
Sovereign Bonds | -3% ₹677 Cr 68,000,000
↑ 67,500,000 91 DTB 18072019
Sovereign Bonds | -2% ₹598 Cr 60,000,000 VEDANTA LIMITED
Commercial Paper | -2% ₹597 Cr 12,000 6.90% Govt Stock 2019
Sovereign Bonds | -2% ₹590 Cr 59,000,000 Power Finance Corporation Ltd.
Commercial Paper | -2% ₹574 Cr 11,500 The Tata Power Company Limited
Commercial Paper | -2% ₹498 Cr 10,000 2. Aditya Birla Sun Life Liquid Fund
CAGR/Annualized return of 7.6% since its launch. Ranked 15 in Liquid Fund category. Return for 2018 was 7.4% , 2017 was 6.7% and 2016 was 7.7% . Aditya Birla Sun Life Liquid Fund
Growth Launch Date 30 Mar 04 NAV (17 Jul 19) ₹305.415 ↑ 0.07 (0.02 %) Net Assets (Cr) ₹53,023 on 30 Apr 19 Category Debt - Liquid Fund AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆☆ Risk Low Expense Ratio 0.19 Sharpe Ratio 18.95 Information Ratio -0.33 Alpha Ratio 0.67 Min Investment 5,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 7.29% Effective Maturity 1 Month 6 Days Modified Duration 1 Month 6 Days Growth of 10,000 investment over the years.
Date Value 30 Jun 14 ₹10,000 30 Jun 15 ₹10,887 30 Jun 16 ₹11,773 30 Jun 17 ₹12,586 30 Jun 18 ₹13,458 30 Jun 19 ₹14,465 Returns for Aditya Birla Sun Life Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 17 Jul 19 Duration Returns 1 Month 0.6% 3 Month 1.8% 6 Month 3.6% 1 Year 7.5% 3 Year 7.1% 5 Year 7.7% 10 Year 15 Year Since launch 7.6% Historical performance (Yearly) on absolute basis
Year Returns 2018 7.4% 2017 6.7% 2016 7.7% 2015 8.4% 2014 9.2% 2013 9.3% 2012 9.7% 2011 9% 2010 5.5% 2009 5.5% Fund Manager information for Aditya Birla Sun Life Liquid Fund
Name Since Tenure Sunaina Cunha 18 Jun 09 9.63 Yr. Kaustubh Gupta 15 Jul 11 7.55 Yr. Data below for Aditya Birla Sun Life Liquid Fund as on 30 Apr 19
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 97.53% Corporate 2.31% Government 0.16% Credit Quality
Rating Value AA 2.13% AAA 97.87% Top Securities Holdings / Portfolio
Name Holding Value Quantity Net Receivables / (Payables)
Net Current Assets | -9% -₹4,572 Cr TATA SONS PRIVATE LIMITED
Commercial Paper | -4% ₹1,972 Cr 39,500
↑ 39,500 Reverse Repo
CBLO/Reverse Repo | -3% ₹1,482 Cr NTPC LIMITED
Commercial Paper | -3% ₹1,411 Cr 28,500
↑ 28,500 7.25% Indusind Bank Limited (26/08/2019)
Net Current Assets | -2% ₹1,000 Cr 6.70% Union Bank Of India (17/09/2019)
Net Current Assets | -2% ₹1,000 Cr 6.65% Canara Bank (13/09/2019)
Net Current Assets | -2% ₹1,000 Cr 6.60% Canara Bank (12/09/2019)
Net Current Assets | -2% ₹1,000 Cr Axis Bank Limited
Certificate of Deposit | -2% ₹965 Cr 97,500
↑ 97,500 6.75% Oriental Bank Of Commerce (19/09/2019)
Net Current Assets | -1% ₹750 Cr 3. Axis Liquid Fund
CAGR/Annualized return of 7.9% since its launch. Ranked 21 in Liquid Fund category. Return for 2018 was 7.5% , 2017 was 6.7% and 2016 was 7.6% . Axis Liquid Fund
Growth Launch Date 9 Oct 09 NAV (17 Jul 19) ₹2,108.31 ↑ 0.44 (0.02 %) Net Assets (Cr) ₹30,460 on 30 Apr 19 Category Debt - Liquid Fund AMC Axis Asset Management Company Limited Rating ☆☆☆☆ Risk Low Expense Ratio 0.15 Sharpe Ratio 19.41 Information Ratio 0 Alpha Ratio 0 Min Investment 500 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 0% Effective Maturity Modified Duration Growth of 10,000 investment over the years.
Date Value 30 Jun 14 ₹10,000 30 Jun 15 ₹10,884 30 Jun 16 ₹11,764 30 Jun 17 ₹12,579 30 Jun 18 ₹13,455 30 Jun 19 ₹14,464 Returns for Axis Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 17 Jul 19 Duration Returns 1 Month 0.6% 3 Month 1.8% 6 Month 3.6% 1 Year 7.5% 3 Year 7.1% 5 Year 7.6% 10 Year 15 Year Since launch 7.9% Historical performance (Yearly) on absolute basis
Year Returns 2018 7.5% 2017 6.7% 2016 7.6% 2015 8.4% 2014 9.1% 2013 9.2% 2012 9.7% 2011 9% 2010 5.6% 2009 Fund Manager information for Axis Liquid Fund
Name Since Tenure Devang Shah 5 Nov 12 6.48 Yr. Aditya Pagaria 13 Aug 16 2.71 Yr. Data below for Axis Liquid Fund as on 30 Apr 19
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 98.94% Corporate 1.06% Credit Quality
Rating Value AA 0.56% AAA 99.44% Top Securities Holdings / Portfolio
Name Holding Value Quantity 91 DTB 29082019
Sovereign Bonds | -3% ₹1,121 Cr 113,767,300
↑ 113,767,300 OIL& NATURAL GAS CORPORATION LIMITED
Commercial Paper | -3% ₹990 Cr 20,000
↑ 20,000 EXPORT-IMPORT BANK OF INDIA
Commercial Paper | -3% ₹961 Cr 19,300
↓ -500 Steel Authority Of India Limited
Commercial Paper | -2% ₹750 Cr 15,000 Oriental Bank Of Commerce
Certificate of Deposit | -2% ₹742 Cr 75,000
↑ 75,000 INDUSIND BANK LIMITED
Certificate of Deposit | -2% ₹639 Cr 64,500
↑ 64,500 91 DTB 21062019
Sovereign Bonds | -2% ₹637 Cr 63,921,800
↑ 10,000,000 Power Finance Corporation Ltd.
Commercial Paper | -2% ₹570 Cr 11,500
↓ -500 91 DTB 01082019
Sovereign Bonds | -2% ₹569 Cr 57,500,000
↑ 57,500,000 Andhra Bank
Certificate of Deposit | -2% ₹524 Cr 52,500
↓ -5,000 4. Tata Liquid Fund
CAGR/Annualized return of 7.6% since its launch. Ranked 18 in Liquid Fund category. Return for 2018 was 7.4% , 2017 was 6.7% and 2016 was 7.7% . Tata Liquid Fund
Growth Launch Date 1 Sep 04 NAV (17 Jul 19) ₹2,992.28 ↑ 0.55 (0.02 %) Net Assets (Cr) ₹18,479 on 30 Apr 19 Category Debt - Liquid Fund AMC Tata Asset Management Limited Rating ☆☆☆☆ Risk Low Expense Ratio 0.21 Sharpe Ratio 21.09 Information Ratio -0.38 Alpha Ratio 1 Min Investment 5,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 7.45% Effective Maturity 1 Month 10 Days Modified Duration 1 Month 10 Days Growth of 10,000 investment over the years.
Date Value 30 Jun 14 ₹10,000 30 Jun 15 ₹10,884 30 Jun 16 ₹11,763 30 Jun 17 ₹12,577 30 Jun 18 ₹13,450 30 Jun 19 ₹14,455 Returns for Tata Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 17 Jul 19 Duration Returns 1 Month 0.6% 3 Month 1.8% 6 Month 3.6% 1 Year 7.4% 3 Year 7.1% 5 Year 7.6% 10 Year 15 Year Since launch 7.6% Historical performance (Yearly) on absolute basis
Year Returns 2018 7.4% 2017 6.7% 2016 7.7% 2015 8.4% 2014 9.1% 2013 9.3% 2012 9.8% 2011 9% 2010 5% 2009 5.5% Fund Manager information for Tata Liquid Fund
Name Since Tenure Amit Somani 16 Oct 13 5.3 Yr. Data below for Tata Liquid Fund as on 30 Apr 19
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 99% Corporate 1% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity RELIANCE INDUSTRIES LIMITED
Commercial Paper | -4% ₹950 Cr 19,000
↑ 6,000 Indusind Bank Ltd
Certificate of Deposit | -3% ₹750 Cr 91 DTB 08082019
Sovereign Bonds | -3% ₹636 Cr 64,277,300
↑ 64,277,300 Net Current Liabilities
Certificate of Deposit | -2% -₹584 Cr PNB HOUSING FINANCE LIMITED
Commercial Paper | -2% ₹572 Cr 11,500
↑ 11,500 91 DTB 22082019
Sovereign Bonds | -2% ₹568 Cr 57,619,000
↑ 57,619,000 SYNDICATE BANK
Certificate of Deposit | -2% ₹564 Cr 56,500
↑ 56,500 ICICI BANK LIMITED
Certificate of Deposit | -2% ₹495 Cr 50,000
↑ 50,000 INDIAN BANK
Certificate of Deposit | -2% ₹495 Cr 50,000
↑ 50,000 PUNJAB NATIONAL BANK
Certificate of Deposit | -2% ₹495 Cr 50,000
↑ 50,000 5. ICICI Prudential Liquid Fund
CAGR/Annualized return of 7.9% since its launch. Ranked 20 in Liquid Fund category. Return for 2018 was 7.4% , 2017 was 6.6% and 2016 was 7.7% . ICICI Prudential Liquid Fund
Growth Launch Date 17 Nov 05 NAV (17 Jul 19) ₹281.175 ↑ 0.05 (0.02 %) Net Assets (Cr) ₹57,392 on 30 Apr 19 Category Debt - Liquid Fund AMC ICICI Prudential Asset Management Company Limited Rating ☆☆☆☆ Risk Low Expense Ratio 0.15 Sharpe Ratio 18.74 Information Ratio -0.61 Alpha Ratio 0.65 Min Investment 500 Min SIP Investment 500 Exit Load NIL Yield to Maturity 7.18% Effective Maturity 1 Month 3 Days Modified Duration 1 Month 1 Day Growth of 10,000 investment over the years.
Date Value 30 Jun 14 ₹10,000 30 Jun 15 ₹10,884 30 Jun 16 ₹11,765 30 Jun 17 ₹12,576 30 Jun 18 ₹13,443 30 Jun 19 ₹14,443 Returns for ICICI Prudential Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 17 Jul 19 Duration Returns 1 Month 0.6% 3 Month 1.8% 6 Month 3.6% 1 Year 7.4% 3 Year 7.1% 5 Year 7.6% 10 Year 15 Year Since launch 7.9% Historical performance (Yearly) on absolute basis
Year Returns 2018 7.4% 2017 6.6% 2016 7.7% 2015 8.3% 2014 9.1% 2013 9.3% 2012 9.7% 2011 8.9% 2010 5.5% 2009 5.6% Fund Manager information for ICICI Prudential Liquid Fund
Name Since Tenure Rahul Goswami 27 Sep 12 6.35 Yr. Rohan Maru 19 Sep 13 5.37 Yr. Data below for ICICI Prudential Liquid Fund as on 30 Apr 19
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 95.48% Corporate 4.52% Credit Quality
Rating Value AA 0.02% AAA 99.98% Top Securities Holdings / Portfolio
Name Holding Value Quantity 91 DTB 29082019
Sovereign Bonds | -6% ₹3,941 Cr 400,000,000
↑ 400,000,000 91 DTB 250719
Sovereign Bonds | -5% ₹3,631 Cr 366,390,400 National Bank For Agriculture And Rural Development
Commercial Paper | -4% ₹2,477 Cr 50,000
↑ 50,000 NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT
Commercial Paper | -3% ₹2,350 Cr 47,500
↑ 47,500 Net Current Assets
Net Current Assets | -3% -₹2,325 Cr 91 DTB 22082019
Sovereign Bonds | -3% ₹1,981 Cr 200,862,400
↑ 200,862,400 RELIANCE INDUSTRIES LIMITED
Commercial Paper | -3% ₹1,979 Cr 40,000
↑ 40,000 Bank Of Baroda
Certificate of Deposit | -2% ₹1,699 Cr 170,000
↓ -27,500 NTPC LIMITED
Commercial Paper | -1% ₹1,011 Cr 20,500
↑ 20,500 Reliance Industries Limited
Commercial Paper | -1% ₹999 Cr 20,000 6. UTI Liquid Cash Plan
CAGR/Annualized return of 7.4% since its launch. Ranked 32 in Liquid Fund category. Return for 2018 was 7.4% , 2017 was 6.7% and 2016 was 7.7% . UTI Liquid Cash Plan
Growth Launch Date 11 Dec 03 NAV (17 Jul 19) ₹3,114.16 ↑ 0.60 (0.02 %) Net Assets (Cr) ₹36,731 on 30 Apr 19 Category Debt - Liquid Fund AMC UTI Asset Management Company Ltd Rating ☆☆☆ Risk Low Expense Ratio 0.09 Sharpe Ratio 20.29 Information Ratio -0.28 Alpha Ratio 0.9 Min Investment 500 Min SIP Investment 1,500 Exit Load NIL Yield to Maturity 6.98% Effective Maturity 1 Month 15 Days Modified Duration Growth of 10,000 investment over the years.
Date Value 30 Jun 14 ₹10,000 30 Jun 15 ₹10,879 30 Jun 16 ₹11,755 30 Jun 17 ₹12,568 30 Jun 18 ₹13,440 30 Jun 19 ₹14,449 Returns for UTI Liquid Cash Plan
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 17 Jul 19 Duration Returns 1 Month 0.6% 3 Month 1.8% 6 Month 3.6% 1 Year 7.5% 3 Year 7.1% 5 Year 7.6% 10 Year 15 Year Since launch 7.4% Historical performance (Yearly) on absolute basis
Year Returns 2018 7.4% 2017 6.7% 2016 7.7% 2015 8.3% 2014 9.1% 2013 9.1% 2012 9.6% 2011 8.9% 2010 5.4% 2009 5.4% Fund Manager information for UTI Liquid Cash Plan
Name Since Tenure Amandeep Chopra 14 Dec 06 12.14 Yr. Amit Sharma 7 Jul 17 1.57 Yr. Data below for UTI Liquid Cash Plan as on 30 Apr 19
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 99.94% Corporate 0.06% Credit Quality
Rating Value AA 1.62% AAA 98.38% Top Securities Holdings / Portfolio
Name Holding Value Quantity HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED
Commercial Paper | -3% ₹1,483 Cr 15,000,000,000
↑ 15,000,000,000 Power Finance Corporation Ltd.
Commercial Paper | -3% ₹1,458 Cr 14,700,000,000
↓ -300,000,000 CANARA BANK
Certificate of Deposit | -3% ₹1,367 Cr 13,700,000,000
↓ -450,000,000 Indusind Bank Ltd. Std - 91 Days
Certificate of Deposit | -3% ₹1,119 Cr 00 Tata Sponge Iron Ltd.
Commercial Paper | -2% ₹1,010 Cr 10,150,000,000
↑ 100,000,000 6.90% Govt Stock 2019
Sovereign Bonds | -2% ₹1,001 Cr 10,000,000,000
↑ 10,000,000,000 POWER GRID CORPORATION OF INDIA LIMITED
Commercial Paper | -2% ₹988 Cr 9,900,000,000 SYNDICATE BANK
Certificate of Deposit | -2% ₹913 Cr 9,150,000,000
↓ -6,600,000,000 Andhra Bank
Certificate of Deposit | -2% ₹797 Cr 8,000,000,000 Reliance Retail Limited
Commercial Paper | -2% ₹791 Cr 8,000,000,000
↑ 8,000,000,000
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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