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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 ₹2,551.37
↑ 0.48 ₹27,002 0.6 1.7 3.5 6.7 4.9 6.99% 2M 2D 2M 2D UTI Liquid Cash Plan Growth ₹3,762.15
↑ 0.70 ₹33,902 0.6 1.7 3.5 6.7 4.8 7% 1M 25D 1M 25D DSP BlackRock Liquidity Fund Growth ₹3,273.34
↑ 0.63 ₹14,172 0.6 1.7 3.4 6.6 4.8 6.86% 1M 6D 1M 10D Aditya Birla Sun Life Liquid Fund Growth ₹369.501
↑ 0.07 ₹46,406 0.5 1.7 3.5 6.7 4.8 7% 1M 13D 1M 17D IDFC Cash Fund Growth ₹2,772.88
↑ 0.54 ₹13,846 0.5 1.7 3.4 6.6 4.8 6.84% 1M 7D 1M 8D Nippon India Liquid Fund Growth ₹5,598.92
↑ 1.04 ₹32,768 0.5 1.7 3.4 6.6 4.8 6.9% 1M 6D 1M 9D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 22 Aug 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 (22 Aug 23) ₹2,551.37 ↑ 0.48 (0.02 %) Net Assets (Cr) ₹27,002 on 31 Jul 23 Category Debt - Liquid Fund AMC Axis Asset Management Company Limited Rating ☆☆☆☆ Risk Low Expense Ratio 0.22 Sharpe Ratio 1.21 Information Ratio 0 Alpha Ratio 0 Min Investment 500 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 6.99% Effective Maturity 2 Months 2 Days Modified Duration 2 Months 2 Days Growth of 10,000 investment over the years.
Date Value 31 Aug 18 ₹10,000 31 Aug 19 ₹10,735 31 Aug 20 ₹11,280 31 Aug 21 ₹11,644 31 Aug 22 ₹12,098 31 Aug 23 ₹12,916 Returns for Axis Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 22 Aug 23 Duration Returns 1 Month 0.6% 3 Month 1.7% 6 Month 3.5% 1 Year 6.7% 3 Year 4.6% 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 10.83 Yr. Aditya Pagaria 13 Aug 16 7.05 Yr. Sachin Jain 3 Jul 23 0.16 Yr. Data below for Axis Liquid Fund as on 31 Jul 23
Asset Allocation
Asset Class Value Cash 100% Debt 0% Debt Sector Allocation
Sector Value Cash Equivalent 78.57% Corporate 13.53% Government 7.9% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Reliance Industries Limited
CBLO/Reverse Repo | -4% ₹1,099 Cr 91 DTB 14092023
Sovereign Bonds | -4% ₹998 Cr 100,000,000 Reliance Retail Ventures Limited
Commercial Paper | -3% ₹836 Cr 17,000
↑ 17,000 91 DTB 07092023
Sovereign Bonds | -3% ₹799 Cr 80,000,000
↓ -50,000,000 Small Industries Development Bank Of India
Commercial Paper | -3% ₹738 Cr 15,000
↑ 15,000 National Bank For Agriculture And Rural Development
Commercial Paper | -3% ₹737 Cr 15,000
↑ 15,000 National Bank For Agriculture And Rural Development
Commercial Paper | -3% ₹699 Cr 14,000 Small Industries Development Bank Of India
Commercial Paper | -3% ₹697 Cr 14,000 Reliance Retail Ventures Limited
Commercial Paper | -3% ₹697 Cr 14,000 91 DTB 09112023
Sovereign Bonds | -2% ₹588 Cr 59,500,000 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 (22 Aug 23) ₹3,762.15 ↑ 0.70 (0.02 %) Net Assets (Cr) ₹33,902 on 31 Jul 23 Category Debt - Liquid Fund AMC UTI Asset Management Company Ltd Rating ☆☆☆ Risk Low Expense Ratio 0.23 Sharpe Ratio 0.89 Information Ratio -4.57 Alpha Ratio -0.18 Min Investment 500 Min SIP Investment 1,500 Exit Load NIL Yield to Maturity 7% Effective Maturity 1 Month 25 Days Modified Duration 1 Month 25 Days Growth of 10,000 investment over the years.
Date Value 31 Aug 18 ₹10,000 31 Aug 19 ₹10,734 31 Aug 20 ₹11,268 31 Aug 21 ₹11,631 31 Aug 22 ₹12,082 31 Aug 23 ₹12,895 Returns for UTI Liquid Cash Plan
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 22 Aug 23 Duration Returns 1 Month 0.6% 3 Month 1.7% 6 Month 3.5% 1 Year 6.7% 3 Year 4.6% 5 Year 5.2% 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 Amit Sharma 7 Jul 17 6.15 Yr. Data below for UTI Liquid Cash Plan as on 31 Jul 23
Asset Allocation
Asset Class Value Cash 99.86% Debt 0.14% Debt Sector Allocation
Sector Value Cash Equivalent 76.87% Government 19.59% Corporate 3.54% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 91 DTB 13072023
Sovereign Bonds | -4% ₹1,247 Cr 12,500,000,000 182 DTB 31082023
Sovereign Bonds | -4% ₹1,047 Cr 10,500,000,000 Indian Bank
Certificate of Deposit | -3% ₹994 Cr 10,000,000,000 91 DTB 02112023
Sovereign Bonds | -3% ₹943 Cr 9,561,160,000
↑ 9,561,160,000 Small Industries Development Bank Of India
Commercial Paper | -3% ₹749 Cr 7,500,000,000 91 DTB 13072023
Sovereign Bonds | -3% ₹749 Cr 7,500,000,000 National Bank For Agriculture And Rural Development
Commercial Paper | -3% ₹746 Cr 7,500,000,000 Reliance Retail Ventures Limited
Commercial Paper | -2% ₹695 Cr 7,000,000,000 Can Fin Homes Ltd.
Commercial Paper | -2% ₹499 Cr 5,000,000,000 ICICI Securities Primary Dealership Ltd
Commercial Paper | -2% ₹498 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 (22 Aug 23) ₹3,273.34 ↑ 0.63 (0.02 %) Net Assets (Cr) ₹14,172 on 31 Jul 23 Category Debt - Liquid Fund AMC DSP BlackRock Invmt Managers Pvt. Ltd. Rating ☆☆☆ Risk Low Expense Ratio 0.25 Sharpe Ratio 0.45 Information Ratio -5.74 Alpha Ratio -0.2 Min Investment 1,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 6.86% Effective Maturity 1 Month 10 Days Modified Duration 1 Month 6 Days Growth of 10,000 investment over the years.
Date Value 31 Aug 18 ₹10,000 31 Aug 19 ₹10,726 31 Aug 20 ₹11,254 31 Aug 21 ₹11,613 31 Aug 22 ₹12,063 31 Aug 23 ₹12,867 Returns for DSP BlackRock Liquidity Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 22 Aug 23 Duration Returns 1 Month 0.6% 3 Month 1.7% 6 Month 3.4% 1 Year 6.6% 3 Year 4.5% 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 7.13 Yr. Karan Mundhra 31 May 21 2.25 Yr. Data below for DSP BlackRock Liquidity Fund as on 31 Jul 23
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 67.57% Government 22.95% Corporate 9.48% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 91 DTB 13072023
Sovereign Bonds | -5% ₹743 Cr 74,500,000 India (Republic of)
- | -5% ₹665 Cr 67,500,000
↑ 67,500,000 182 DTB 07092023
Sovereign Bonds | -4% ₹603 Cr 60,500,000
↑ 3,000,000 National Bank For Agriculture And Rural Development
Commercial Paper | -4% ₹597 Cr 12,000 Export-Import Bank Of India
Commercial Paper | -4% ₹498 Cr 10,000 HDFC Bank Limited
Debentures | -3% ₹354 Cr 3,400 Net Receivables/Payables
CBLO | -3% ₹340 Cr Bank Of Baroda
Certificate of Deposit | -2% ₹323 Cr 6,500 Tata Power Co Ltd.
Commercial Paper | -2% ₹300 Cr 6,000 Reliance Retail Ventures Limited
Commercial Paper | -2% ₹299 Cr 6,000 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 (22 Aug 23) ₹369.501 ↑ 0.07 (0.02 %) Net Assets (Cr) ₹46,406 on 31 Jul 23 Category Debt - Liquid Fund AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆☆ Risk Low Expense Ratio 0.33 Sharpe Ratio 0.97 Information Ratio -3.99 Alpha Ratio -0.19 Min Investment 5,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 7% Effective Maturity 1 Month 17 Days Modified Duration 1 Month 13 Days Growth of 10,000 investment over the years.
Date Value 31 Aug 18 ₹10,000 31 Aug 19 ₹10,740 31 Aug 20 ₹11,287 31 Aug 21 ₹11,648 31 Aug 22 ₹12,098 31 Aug 23 ₹12,915 Returns for Aditya Birla Sun Life Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 22 Aug 23 Duration Returns 1 Month 0.5% 3 Month 1.7% 6 Month 3.5% 1 Year 6.7% 3 Year 4.6% 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 12.14 Yr. Kaustubh Gupta 15 Jul 11 12.14 Yr. Sanjay Pawar 1 Jul 22 1.17 Yr. Dhaval Joshi 21 Nov 22 0.78 Yr. Data below for Aditya Birla Sun Life Liquid Fund as on 31 Jul 23
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 63.81% Corporate 21.86% Government 14.33% Credit Quality
Rating Value AA 0.79% AAA 99.21% Top Securities Holdings / Portfolio
Name Holding Value Quantity 182 DTB 22092023
Sovereign Bonds | -7% ₹2,789 Cr 280,000,000 Reverse Repo
CBLO/Reverse Repo | -6% ₹2,554 Cr Net Receivables / (Payables)
Net Current Assets | -6% -₹2,386 Cr Small Industries Development Bank Of India
Commercial Paper | -5% ₹1,966 Cr 40,000
↑ 40,000 Bank Of Baroda
Certificate of Deposit | -5% ₹1,954 Cr 39,700
↑ 39,700 182 DTB 14092023
Sovereign Bonds | -3% ₹1,082 Cr 108,500,000 IDFC Bank Limited
Certificate of Deposit | -2% ₹959 Cr 19,500
↑ 19,500 Bank Of Maharashtra
Certificate of Deposit | -2% ₹948 Cr 19,000
↓ -1,000 Rural Electrification Corporation Limited
Commercial Paper | -2% ₹895 Cr 18,000 Punjab And Sind Bank
Certificate of Deposit | -2% ₹800 Cr 16,000
↑ 16,000 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 (22 Aug 23) ₹2,772.88 ↑ 0.54 (0.02 %) Net Assets (Cr) ₹13,846 on 31 Jul 23 Category Debt - Liquid Fund AMC IDFC Asset Management Company Limited Rating ☆☆☆ Risk Low Expense Ratio 0.23 Sharpe Ratio 0.39 Information Ratio 0 Alpha Ratio 0 Min Investment 100 Min SIP Investment 100 Exit Load NIL Yield to Maturity 6.84% Effective Maturity 1 Month 8 Days Modified Duration 1 Month 7 Days Growth of 10,000 investment over the years.
Date Value 31 Aug 18 ₹10,000 31 Aug 19 ₹10,707 31 Aug 20 ₹11,217 31 Aug 21 ₹11,574 31 Aug 22 ₹12,021 31 Aug 23 ₹12,822 Returns for IDFC Cash Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 22 Aug 23 Duration Returns 1 Month 0.5% 3 Month 1.7% 6 Month 3.4% 1 Year 6.6% 3 Year 4.5% 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 7.96 Yr. Brijesh Shah 1 Dec 21 1.75 Yr. Data below for IDFC Cash Fund as on 31 Jul 23
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 77.29% Corporate 13.04% Government 9.67% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Triparty Repo
CBLO/Reverse Repo | -9% ₹1,342 Cr 91 DTB 17112023
Sovereign Bonds | -5% ₹799 Cr 81,000,000
↑ 81,000,000 91 DTB 02112023
Sovereign Bonds | -4% ₹514 Cr 52,000,000
↑ 52,000,000 Canara Bank
Certificate of Deposit | -3% ₹498 Cr 50,000,000 Larsen And Toubro Limited
Commercial Paper | -3% ₹494 Cr 50,000,000 Larsen And Toubro Limited
Commercial Paper | -3% ₹470 Cr 47,500,000 Small Industries Development Bank Of India
Commercial Paper | -3% ₹448 Cr 45,000,000 Reliance Retail Ventures Limited
Commercial Paper | -3% ₹400 Cr 40,000,000
↓ -10,000,000 91 DTB 26102023
Sovereign Bonds | -3% ₹396 Cr 40,000,000 91 DTB 09112023
Sovereign Bonds | -3% ₹395 Cr 40,000,000
↑ 40,000,000 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 (22 Aug 23) ₹5,598.92 ↑ 1.04 (0.02 %) Net Assets (Cr) ₹32,768 on 31 Jul 23 Category Debt - Liquid Fund AMC Nippon Life Asset Management Ltd. Rating ☆☆☆☆ Risk Low Expense Ratio 0.34 Sharpe Ratio 0.36 Information Ratio 0 Alpha Ratio 0 Min Investment 100 Min SIP Investment 100 Exit Load NIL Yield to Maturity 6.9% Effective Maturity 1 Month 9 Days Modified Duration 1 Month 6 Days Growth of 10,000 investment over the years.
Date Value 31 Aug 18 ₹10,000 31 Aug 19 ₹10,742 31 Aug 20 ₹11,288 31 Aug 21 ₹11,646 31 Aug 22 ₹12,090 31 Aug 23 ₹12,896 Returns for Nippon India Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 22 Aug 23 Duration Returns 1 Month 0.5% 3 Month 1.7% 6 Month 3.4% 1 Year 6.6% 3 Year 4.5% 5 Year 5.2% 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 9.92 Yr. Siddharth Deb 1 Mar 22 1.5 Yr. Kinjal Desai 25 May 18 5.27 Yr. Akshay Sharma 1 Dec 22 0.75 Yr. Data below for Nippon India Liquid Fund as on 31 Jul 23
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 69.89% Government 16.05% Corporate 14.06% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Reverse Repo
CBLO/Reverse Repo | -6% ₹1,654 Cr 182 DTB 14092023
Sovereign Bonds | -3% ₹893 Cr 89,500,000 8.83% Govt Stock 2023
Sovereign Bonds | -3% ₹788 Cr 78,500,000
↑ 78,500,000 6.88%corporate Bond Repo (Md 07-09-2023) (Counterparty Reliance Industries
CBLO/Reverse Repo | -3% ₹764 Cr Bank Of Baroda
Certificate of Deposit | -3% ₹743 Cr 15,000 Indian Bank
Certificate of Deposit | -3% ₹737 Cr 15,000
↑ 15,000 91 DTB 26102023
Sovereign Bonds | -3% ₹733 Cr 74,000,000 Canara Bank
Certificate of Deposit | -2% ₹691 Cr 14,000 Bank Of Maharashtra
Certificate of Deposit | -2% ₹689 Cr 14,000
↑ 14,000 91 DTB 02112023
Sovereign Bonds | -2% ₹643 Cr 65,000,000
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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