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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 ₹2,510.96
↑ 0.46 ₹25,739 0.6 1.8 3.4 6.3 4.9 7.09% 1M 8D 1M 8D UTI Liquid Cash Plan Growth ₹3,702.79
↑ 0.72 ₹27,772 0.6 1.8 3.4 6.2 4.8 7.23% 1M 27D 1M 27D Aditya Birla Sun Life Liquid Fund Growth ₹363.672
↑ 0.07 ₹39,131 0.6 1.8 3.5 6.3 4.8 7.32% 1M 20D 1M 20D Nippon India Liquid Fund Growth ₹5,511.04
↑ 1.01 ₹22,983 0.6 1.8 3.4 6.2 4.8 7.09% 1M 14D 1M 19D HDFC Liquid Fund Growth ₹4,430.7
↑ 0.79 ₹50,753 0.6 1.7 3.4 6.2 4.8 6.8% 1M 17D 1M 17D SBI Liquid Fund Growth ₹3,533.25
↑ 0.61 ₹60,376 0.6 1.7 3.4 6.2 4.8 7.09% 1M 24D 1M 28D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 26 May 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 (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 (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 The primary objective of the Scheme is to enhance income consistent with a high level of liquidity, through a judicious portfolio mix comprising of money market and debt instruments. HDFC Liquid Fund is a Debt - Liquid Fund fund was launched on 17 Oct 00. It is a fund with Low risk and has given a Below is the key information for HDFC Liquid Fund 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 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 (26 May 23) ₹2,510.96 ↑ 0.46 (0.02 %) Net Assets (Cr) ₹25,739 on 30 Apr 23 Category Debt - Liquid Fund AMC Axis Asset Management Company Limited Rating ☆☆☆☆ Risk Low Expense Ratio 0.25 Sharpe Ratio 0.39 Information Ratio 0 Alpha Ratio 0 Min Investment 500 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 7.09% Effective Maturity 1 Month 8 Days Modified Duration 1 Month 8 Days Growth of 10,000 investment over the years.
Date Value 30 Apr 18 ₹10,000 30 Apr 19 ₹10,753 30 Apr 20 ₹11,409 30 Apr 21 ₹11,796 30 Apr 22 ₹12,202 30 Apr 23 ₹12,934 Returns for Axis Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 26 May 23 Duration Returns 1 Month 0.6% 3 Month 1.8% 6 Month 3.4% 1 Year 6.3% 3 Year 4.3% 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 10.49 Yr. Aditya Pagaria 13 Aug 16 6.72 Yr. Data below for Axis Liquid Fund as on 30 Apr 23
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 70.62% Government 22.24% Corporate 7.14% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Clearing Corporation Of India Ltd
CBLO/Reverse Repo | -6% ₹1,895 Cr 91 DTB 13072023
Sovereign Bonds | -3% ₹989 Cr 100,000,000 91 DTB 15062023
Sovereign Bonds | -3% ₹806 Cr 81,000,000 Punjab National Bank
Certificate of Deposit | -3% ₹795 Cr 16,000 National Bank For Agriculture And Rural Development
Commercial Paper | -3% ₹777 Cr 15,600
↑ 4,100 Canara Bank
Certificate of Deposit | -3% ₹749 Cr 15,000 91 DTB 25052023
Sovereign Bonds | -3% ₹749 Cr 75,000,000 Indian Bank
Certificate of Deposit | -3% ₹747 Cr 15,000 Punjab National Bank
Certificate of Deposit | -2% ₹738 Cr 15,000
↑ 15,000 Small Industries Development Bank Of India
Commercial Paper | -2% ₹572 Cr 11,500 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 (26 May 23) ₹3,702.79 ↑ 0.72 (0.02 %) Net Assets (Cr) ₹27,772 on 30 Apr 23 Category Debt - Liquid Fund AMC UTI Asset Management Company Ltd Rating ☆☆☆ Risk Low Expense Ratio 0.23 Sharpe Ratio -0.1 Information Ratio -4.86 Alpha Ratio -0.16 Min Investment 500 Min SIP Investment 1,500 Exit Load NIL Yield to Maturity 7.23% Effective Maturity 1 Month 27 Days Modified Duration 1 Month 27 Days Growth of 10,000 investment over the years.
Date Value 30 Apr 18 ₹10,000 30 Apr 19 ₹10,752 30 Apr 20 ₹11,396 30 Apr 21 ₹11,784 30 Apr 22 ₹12,187 30 Apr 23 ₹12,914 Returns for UTI Liquid Cash Plan
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 26 May 23 Duration Returns 1 Month 0.6% 3 Month 1.8% 6 Month 3.4% 1 Year 6.2% 3 Year 4.3% 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 Amit Sharma 7 Jul 17 5.82 Yr. Data below for UTI Liquid Cash Plan as on 30 Apr 23
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 60.03% Government 25.42% Corporate 14.55% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity National Bank For Agriculture And Rural Development
Commercial Paper | -4% ₹1,243 Cr 12,500,000,000 91 DTB 27072023
Sovereign Bonds | -4% ₹1,233 Cr 12,500,000,000
↑ 12,500,000,000 91 DTB 23062023
Sovereign Bonds | -4% ₹1,192 Cr 12,000,000,000 Net Current Assets
Net Current Assets | -4% ₹1,041 Cr Indian Bank
Certificate of Deposit | -3% ₹846 Cr 8,500,000,000 91 DTB 18052023
Sovereign Bonds | -3% ₹790 Cr 7,900,000,000 91 DTB 06072023
Sovereign Bonds | -3% ₹743 Cr 7,500,000,000 91 DTB 20072023
Sovereign Bonds | -3% ₹741 Cr 7,500,000,000
↑ 7,500,000,000 7.16% Govt Stock 2023
Sovereign Bonds | -2% ₹700 Cr 7,000,000,000 Punjab & Sind Bank
Certificate of Deposit | -2% ₹500 Cr 5,000,000,000 3. 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 (26 May 23) ₹363.672 ↑ 0.07 (0.02 %) Net Assets (Cr) ₹39,131 on 30 Apr 23 Category Debt - Liquid Fund AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆☆ Risk Low Expense Ratio 0.33 Sharpe Ratio -0.02 Information Ratio -4.07 Alpha Ratio -0.16 Min Investment 5,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 7.32% Effective Maturity 1 Month 20 Days Modified Duration 1 Month 20 Days Growth of 10,000 investment over the years.
Date Value 30 Apr 18 ₹10,000 30 Apr 19 ₹10,747 30 Apr 20 ₹11,403 30 Apr 21 ₹11,799 30 Apr 22 ₹12,202 30 Apr 23 ₹12,931 Returns for Aditya Birla Sun Life Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 26 May 23 Duration Returns 1 Month 0.6% 3 Month 1.8% 6 Month 3.5% 1 Year 6.3% 3 Year 4.3% 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 11.8 Yr. Kaustubh Gupta 15 Jul 11 11.8 Yr. Sanjay Pawar 1 Jul 22 0.83 Yr. Dhaval Joshi 21 Nov 22 0.44 Yr. Data below for Aditya Birla Sun Life Liquid Fund as on 30 Apr 23
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 68.16% Corporate 17.34% Government 14.5% Credit Quality
Rating Value AA 0.09% AAA 99.91% Top Securities Holdings / Portfolio
Name Holding Value Quantity Reverse Repo
CBLO/Reverse Repo | -6% ₹2,622 Cr 7.16% Govt Stock 2023
Sovereign Bonds | -6% ₹2,433 Cr 243,337,000 91 DTB 13072023
Sovereign Bonds | -5% ₹1,908 Cr 192,921,400 Indian Bank
Certificate of Deposit | -4% ₹1,792 Cr 36,000 Bank Of Maharashtra
Certificate of Deposit | -2% ₹996 Cr 20,000 Dbs Bank India Limited
Certificate of Deposit | -2% ₹993 Cr 20,000 Indian Bank
Certificate of Deposit | -2% ₹991 Cr 20,000 Reliance Retail Ventures Limited
Commercial Paper | -2% ₹985 Cr 19,800 Net Receivables / (Payables)
CBLO | -2% -₹875 Cr ICICI Securities Limited
Commercial Paper | -2% ₹795 Cr 16,000 4. 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 (26 May 23) ₹5,511.04 ↑ 1.01 (0.02 %) Net Assets (Cr) ₹22,983 on 30 Apr 23 Category Debt - Liquid Fund AMC Nippon Life Asset Management Ltd. Rating ☆☆☆☆ Risk Low Expense Ratio 0.32 Sharpe Ratio -0.37 Information Ratio 0 Alpha Ratio 0 Min Investment 100 Min SIP Investment 100 Exit Load NIL Yield to Maturity 7.09% Effective Maturity 1 Month 19 Days Modified Duration 1 Month 14 Days Growth of 10,000 investment over the years.
Date Value 30 Apr 18 ₹10,000 30 Apr 19 ₹10,753 30 Apr 20 ₹11,410 30 Apr 21 ₹11,800 30 Apr 22 ₹12,198 30 Apr 23 ₹12,915 Returns for Nippon India Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 26 May 23 Duration Returns 1 Month 0.6% 3 Month 1.8% 6 Month 3.4% 1 Year 6.2% 3 Year 4.2% 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 9.59 Yr. Siddharth Deb 1 Mar 22 1.17 Yr. Kinjal Desai 25 May 18 4.94 Yr. Akshay Sharma 1 Dec 22 0.41 Yr. Data below for Nippon India Liquid Fund as on 30 Apr 23
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 64.03% Corporate 21.17% Government 14.8% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Net Current Assets
Net Current Assets | -16% -₹3,780 Cr Reverse Repo
CBLO/Reverse Repo | -9% ₹2,026 Cr 91 DTB 15062023
Sovereign Bonds | -6% ₹1,488 Cr 150,000,000 Reliance Retail Ventures Limited
Commercial Paper | -4% ₹985 Cr 20,000
↑ 20,000 91 DTB 08062023
Sovereign Bonds | -4% ₹930 Cr 93,682,500 91 DTB 25052023
Sovereign Bonds | -4% ₹881 Cr 88,500,000
↓ -7,500,000 Sikka Ports & Terminals Limited
Commercial Paper | -3% ₹674 Cr 13,500
↓ -2,500 Small Industries Development Bank Of India
Commercial Paper | -3% ₹595 Cr 12,000 Union Bank Of India
Certificate of Deposit | -2% ₹507 Cr 10,200 Small Industries Development Bank Of India
Commercial Paper | -2% ₹498 Cr 10,000 5. HDFC Liquid Fund
CAGR/Annualized return of 6.8% since its launch. Ranked 35 in Liquid Fund category. Return for 2022 was 4.8% , 2021 was 3.2% and 2020 was 4.1% . HDFC Liquid Fund
Growth Launch Date 17 Oct 00 NAV (26 May 23) ₹4,430.7 ↑ 0.79 (0.02 %) Net Assets (Cr) ₹50,753 on 30 Apr 23 Category Debt - Liquid Fund AMC HDFC Asset Management Company Limited Rating ☆☆☆ Risk Low Expense Ratio 0.3 Sharpe Ratio -0.65 Information Ratio -5.9 Alpha Ratio -0.24 Min Investment 5,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 6.8% Effective Maturity 1 Month 17 Days Modified Duration 1 Month 17 Days Growth of 10,000 investment over the years.
Date Value 30 Apr 18 ₹10,000 30 Apr 19 ₹10,741 30 Apr 20 ₹11,378 30 Apr 21 ₹11,751 30 Apr 22 ₹12,148 30 Apr 23 ₹12,863 Returns for HDFC Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 26 May 23 Duration Returns 1 Month 0.6% 3 Month 1.7% 6 Month 3.4% 1 Year 6.2% 3 Year 4.2% 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 4.1% 2019 6.5% 2018 7.2% 2017 6.5% 2016 7.6% 2015 8.4% 2014 9.1% 2013 9.3% Fund Manager information for HDFC Liquid Fund
Name Since Tenure Anupam Joshi 27 Oct 15 7.51 Yr. Swapnil Jangam 6 Oct 22 0.57 Yr. Data below for HDFC Liquid Fund as on 30 Apr 23
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 67.02% Government 19.36% Corporate 13.61% Credit Quality
Rating Value AA 0.26% AAA 99.74% Top Securities Holdings / Portfolio
Name Holding Value Quantity 91 DTB 23062023
Sovereign Bonds | -5% ₹2,502 Cr 252,000,000 Bank Of Baroda
Certificate of Deposit | -5% ₹2,482 Cr 50,000 91 DTB 13072023
Sovereign Bonds | -5% ₹2,473 Cr 250,000,000 Reverse Repo
CBLO/Reverse Repo | -4% ₹2,195 Cr Ntpc Limited
Commercial Paper | -4% ₹1,978 Cr 40,000
↑ 40,000 Small Industries Development Bank Of India
Commercial Paper | -4% ₹1,972 Cr 40,000 91 DTB 03082023
Sovereign Bonds | -3% ₹1,749 Cr 177,500,000
↑ 177,500,000 91 DTB 15062023
Sovereign Bonds | -3% ₹1,492 Cr 150,000,000 Punjab National Bank
Certificate of Deposit | -2% ₹1,241 Cr 25,000 Reliance Retail Ventures Limited
Commercial Paper | -2% ₹1,000 Cr 20,000 6. SBI Liquid Fund
CAGR/Annualized return of 6.9% since its launch. Ranked 40 in Liquid Fund category. Return for 2022 was 4.8% , 2021 was 3.3% and 2020 was 4.2% . SBI Liquid Fund
Growth Launch Date 22 Mar 07 NAV (26 May 23) ₹3,533.25 ↑ 0.61 (0.02 %) Net Assets (Cr) ₹60,376 on 30 Apr 23 Category Debt - Liquid Fund AMC SBI Funds Management Private Limited Rating ☆☆☆ Risk Low Expense Ratio 0.28 Sharpe Ratio -0.35 Information Ratio 0 Alpha Ratio 0 Min Investment 50,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 7.09% Effective Maturity 1 Month 28 Days Modified Duration 1 Month 24 Days Growth of 10,000 investment over the years.
Date Value 30 Apr 18 ₹10,000 30 Apr 19 ₹10,740 30 Apr 20 ₹11,375 30 Apr 21 ₹11,760 30 Apr 22 ₹12,159 30 Apr 23 ₹12,875 Returns for SBI Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 26 May 23 Duration Returns 1 Month 0.6% 3 Month 1.7% 6 Month 3.4% 1 Year 6.2% 3 Year 4.3% 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 7.3% 2017 6.6% 2016 7.6% 2015 8.3% 2014 9% 2013 9.2% Fund Manager information for SBI Liquid Fund
Name Since Tenure R. Arun 7 May 18 4.98 Yr. Data below for SBI Liquid Fund as on 30 Apr 23
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 79.9% Government 14.07% Corporate 6.03% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 91 DTB 15062023
Sovereign Bonds | -7% ₹4,716 Cr 474,276,600 91 DTB 23062023
Sovereign Bonds | -5% ₹3,501 Cr 352,574,000 National Bank For Agriculture And Rural Development
Commercial Paper | -5% ₹3,295 Cr 66,000
↓ -8,000 91 DTB 08062023
Sovereign Bonds | -5% ₹3,286 Cr 330,000,000 Reliance Retail Ventures Limited
Commercial Paper | -4% ₹2,956 Cr 60,000
↑ 60,000 Union Bank Of India
Certificate of Deposit | -4% ₹2,595 Cr 52,170
↓ -14,500 91 DTB 01062023
Sovereign Bonds | -4% ₹2,517 Cr 252,500,000 Small Industries Development Bank Of India
Commercial Paper | -4% ₹2,485 Cr 50,000 Punjab National Bank
Certificate of Deposit | -3% ₹2,324 Cr 46,500
↓ -2,000 Treps
CBLO/Reverse Repo | -3% ₹2,240 Cr
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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