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6 Best Liquid Mutual Funds 2021
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 21 - 22
Fund NAV Net Assets (Cr) 1 MO (%) 3 MO (%) 6 MO (%) 1 YR (%) 2020 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity Aditya Birla Sun Life Liquid Fund Growth ₹336.568
↑ 0.03 ₹29,710 0.3 0.8 1.6 3.2 4.3 0% Axis Liquid Fund Growth ₹2,323.19
↑ 0.22 ₹24,759 0.3 0.8 1.7 3.2 4.3 3.61% 27D 27D ICICI Prudential Liquid Fund Growth ₹309.641
↑ 0.03 ₹35,561 0.3 0.8 1.6 3.2 4.3 3.62% 21D 23D Nippon India Liquid Fund Growth ₹5,106.22
↑ 0.47 ₹20,961 0.3 0.8 1.6 3.2 4.3 3.65% 1M 5D 1M 6D SBI Liquid Fund Growth ₹3,273.94
↑ 0.33 ₹49,644 0.3 0.8 1.7 3.2 4.2 3.61% 25D 25D UTI Liquid Cash Plan Growth ₹3,427.43
↑ 0.31 ₹25,609 0.3 0.8 1.7 3.2 4.2 3.62% 25D 27D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 3 Dec 21 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.
(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 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 (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 (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 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. Aditya Birla Sun Life Liquid Fund
CAGR/Annualized return of 7.1% since its launch. Ranked 15 in Liquid Fund category. Return for 2020 was 4.3% , 2019 was 6.7% and 2018 was 7.4% . Aditya Birla Sun Life Liquid Fund
Growth Launch Date 30 Mar 04 NAV (03 Dec 21) ₹336.568 ↑ 0.03 (0.01 %) Net Assets (Cr) ₹29,710 on 31 Oct 21 Category Debt - Liquid Fund AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆☆ Risk Low Expense Ratio 0.31 Sharpe Ratio -5.39 Information Ratio -2.95 Alpha Ratio -0.39 Min Investment 5,000 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 Nov 16 ₹10,000 30 Nov 17 ₹10,664 30 Nov 18 ₹11,446 30 Nov 19 ₹12,236 30 Nov 20 ₹12,786 30 Nov 21 ₹13,196 Returns for Aditya Birla Sun Life Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 3 Dec 21 Duration Returns 1 Month 0.3% 3 Month 0.8% 6 Month 1.6% 1 Year 3.2% 3 Year 4.8% 5 Year 5.7% 10 Year 15 Year Since launch 7.1% Historical performance (Yearly) on absolute basis
Year Returns 2020 4.3% 2019 6.7% 2018 7.4% 2017 6.7% 2016 7.7% 2015 8.4% 2014 9.2% 2013 9.3% 2012 9.7% 2011 9% Fund Manager information for Aditya Birla Sun Life Liquid Fund
Name Since Tenure Sunaina Cunha 15 Jul 11 10.3 Yr. Kaustubh Gupta 15 Jul 11 10.3 Yr. Harshil Suvarnkar 9 Jun 21 0.39 Yr. Data below for Aditya Birla Sun Life Liquid Fund as on 31 Oct 21
Asset Allocation
Asset Class Value Cash 99.81% Debt 0.19% Debt Sector Allocation
Sector Value Cash Equivalent 88.07% Corporate 11.93% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 182 DTB 02122021
Sovereign Bonds | -3% ₹1,001 Cr 100,212,500 91 DTB 23122021
Sovereign Bonds | -3% ₹997 Cr 100,000,000 91 DTB 16122021
Sovereign Bonds | -3% ₹947 Cr 95,000,000 91 DTB 02122021
Sovereign Bonds | -2% ₹679 Cr 68,000,000 Housing Development Finance Corporation Limited
Debentures | -2% ₹616 Cr 6,150
↑ 2,000 182 DTB 25112021
Sovereign Bonds | -2% ₹525 Cr 52,500,000 182 DTB 18112021
Sovereign Bonds | -1% ₹275 Cr 27,500,000 Housing Development Finance Corporation Limited
Debentures | -1% ₹200 Cr 2,000 182 DTB 23122021
Sovereign Bonds | -1% ₹189 Cr 19,000,000 Housing Development Finance Corporation Limited
Debentures | -0% ₹100 Cr 1,000 2. Axis Liquid Fund
CAGR/Annualized return of 7.2% since its launch. Ranked 21 in Liquid Fund category. Return for 2020 was 4.3% , 2019 was 6.6% and 2018 was 7.5% . Axis Liquid Fund
Growth Launch Date 9 Oct 09 NAV (03 Dec 21) ₹2,323.19 ↑ 0.22 (0.01 %) Net Assets (Cr) ₹24,759 on 15 Nov 21 Category Debt - Liquid Fund AMC Axis Asset Management Company Limited Rating ☆☆☆☆ Risk Low Expense Ratio 0.23 Sharpe Ratio -5.11 Information Ratio 0 Alpha Ratio 0 Min Investment 500 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 3.61% Effective Maturity 27 Days Modified Duration 27 Days Growth of 10,000 investment over the years.
Date Value 30 Nov 16 ₹10,000 30 Nov 17 ₹10,671 30 Nov 18 ₹11,457 30 Nov 19 ₹12,241 30 Nov 20 ₹12,790 30 Nov 21 ₹13,202 Returns for Axis Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 3 Dec 21 Duration Returns 1 Month 0.3% 3 Month 0.8% 6 Month 1.7% 1 Year 3.2% 3 Year 4.8% 5 Year 5.7% 10 Year 15 Year Since launch 7.2% Historical performance (Yearly) on absolute basis
Year Returns 2020 4.3% 2019 6.6% 2018 7.5% 2017 6.7% 2016 7.6% 2015 8.4% 2014 9.1% 2013 9.2% 2012 9.7% 2011 9% Fund Manager information for Axis Liquid Fund
Name Since Tenure Devang Shah 5 Nov 12 8.99 Yr. Aditya Pagaria 13 Aug 16 5.22 Yr. Data below for Axis Liquid Fund as on 15 Nov 21
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 92.61% Corporate 5.98% Government 1.41% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 91 DTB 16122021
Sovereign Bonds | -4% ₹997 Cr 100,000,000 182 DTB 30122021
Sovereign Bonds | -4% ₹886 Cr 89,000,000
↑ 10,000,000 91 DTB 23122021
Sovereign Bonds | -3% ₹797 Cr 80,000,000 91 DTB 02022022
Sovereign Bonds | -3% ₹794 Cr 80,000,000
↑ 80,000,000 364 DTB 13012022
Sovereign Bonds | -1% ₹303 Cr 30,500,000
↑ 30,500,000 Housing Development Finance Corporation Limited
Debentures | -1% ₹300 Cr 3,000
↑ 3,000 364 DTB 18112021
Sovereign Bonds | -1% ₹300 Cr 30,000,000 91 DTB 02122021
Sovereign Bonds | -1% ₹265 Cr 26,506,600 91 DTB 09122021
Sovereign Bonds | -1% ₹249 Cr 25,000,000 Power Grid Corporation of India Limited
Debentures | -1% ₹201 Cr 2,000
↑ 2,000 3. ICICI Prudential Liquid Fund
CAGR/Annualized return of 7.3% since its launch. Ranked 20 in Liquid Fund category. Return for 2020 was 4.3% , 2019 was 6.6% and 2018 was 7.4% . ICICI Prudential Liquid Fund
Growth Launch Date 17 Nov 05 NAV (03 Dec 21) ₹309.641 ↑ 0.03 (0.01 %) Net Assets (Cr) ₹35,561 on 31 Oct 21 Category Debt - Liquid Fund AMC ICICI Prudential Asset Management Company Limited Rating ☆☆☆☆ Risk Low Expense Ratio 0.32 Sharpe Ratio -5.83 Information Ratio -3.14 Alpha Ratio -0.39 Min Investment 500 Min SIP Investment 99 Exit Load NIL Yield to Maturity 3.62% Effective Maturity 23 Days Modified Duration 21 Days Growth of 10,000 investment over the years.
Date Value 30 Nov 16 ₹10,000 30 Nov 17 ₹10,662 30 Nov 18 ₹11,439 30 Nov 19 ₹12,219 30 Nov 20 ₹12,765 30 Nov 21 ₹13,170 Returns for ICICI Prudential Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 3 Dec 21 Duration Returns 1 Month 0.3% 3 Month 0.8% 6 Month 1.6% 1 Year 3.2% 3 Year 4.8% 5 Year 5.7% 10 Year 15 Year Since launch 7.3% Historical performance (Yearly) on absolute basis
Year Returns 2020 4.3% 2019 6.6% 2018 7.4% 2017 6.6% 2016 7.7% 2015 8.3% 2014 9.1% 2013 9.3% 2012 9.7% 2011 8.9% Fund Manager information for ICICI Prudential Liquid Fund
Name Since Tenure Rahul Goswami 27 Sep 12 9.1 Yr. Rohan Maru 19 Sep 13 8.12 Yr. Data below for ICICI Prudential Liquid Fund as on 31 Oct 21
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 87.84% Corporate 12.16% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 91 DTB 25112021
Sovereign Bonds | -3% ₹1,249 Cr 125,000,000 364 DTB 18112021
Sovereign Bonds | -3% ₹1,150 Cr 115,000,000 91 DTB 02122021
Sovereign Bonds | -2% ₹899 Cr 90,000,000 91 DTB 13012022
Sovereign Bonds | -2% ₹805 Cr 80,966,000 182 DTB 25112021
Sovereign Bonds | -2% ₹625 Cr 62,500,000
↑ 50,000,000 Hindustan Petroleum Corporation Limited
Domestic Bonds | -2% ₹598 Cr 12,000
↑ 12,000 91 DTB 02022022
Sovereign Bonds | -1% ₹539 Cr 54,327,800
↑ 54,327,800 91 DTB 06012022
Sovereign Bonds | -1% ₹408 Cr 41,000,000 91 DTB 16122021
Sovereign Bonds | -1% ₹398 Cr 39,882,700
↑ 10,000,000 182 DTB 02122021
Sovereign Bonds | -1% ₹200 Cr 20,000,000 4. Nippon India Liquid Fund
CAGR/Annualized return of 7% since its launch. Ranked 11 in Liquid Fund category. Return for 2020 was 4.3% , 2019 was 6.7% and 2018 was 7.4% . Nippon India Liquid Fund
Growth Launch Date 9 Dec 03 NAV (03 Dec 21) ₹5,106.22 ↑ 0.47 (0.01 %) Net Assets (Cr) ₹20,961 on 31 Oct 21 Category Debt - Liquid Fund AMC Nippon Life Asset Management Ltd. Rating ☆☆☆☆ Risk Low Expense Ratio 0.29 Sharpe Ratio -5.63 Information Ratio -2.97 Alpha Ratio -0.42 Min Investment 100 Min SIP Investment 100 Exit Load NIL Yield to Maturity 3.65% Effective Maturity 1 Month 6 Days Modified Duration 1 Month 5 Days Growth of 10,000 investment over the years.
Date Value 30 Nov 16 ₹10,000 30 Nov 17 ₹10,666 30 Nov 18 ₹11,449 30 Nov 19 ₹12,242 30 Nov 20 ₹12,787 30 Nov 21 ₹13,192 Returns for Nippon India Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 3 Dec 21 Duration Returns 1 Month 0.3% 3 Month 0.8% 6 Month 1.6% 1 Year 3.2% 3 Year 4.8% 5 Year 5.7% 10 Year 15 Year Since launch 7% Historical performance (Yearly) on absolute basis
Year Returns 2020 4.3% 2019 6.7% 2018 7.4% 2017 6.7% 2016 7.7% 2015 8.3% 2014 9.1% 2013 9.2% 2012 9.7% 2011 8.9% Fund Manager information for Nippon India Liquid Fund
Name Since Tenure Anju Chhajer 1 Oct 13 8.09 Yr. Kinjal Desai 25 May 18 3.44 Yr. Data below for Nippon India Liquid Fund as on 31 Oct 21
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 93.61% Corporate 6.39% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 91 DTB 09122021
Sovereign Bonds | -4% ₹998 Cr 100,000,000
↑ 100,000,000 182 DTB 18112021
Sovereign Bonds | -3% ₹788 Cr 78,810,000
↓ -20,000,000 364 DTB 25112021
Sovereign Bonds | -3% ₹734 Cr 73,500,000 91 DTB 06012022
Sovereign Bonds | -2% ₹597 Cr 60,000,000 364 DTB 06012022
Sovereign Bonds | -2% ₹523 Cr 52,500,000 91 DTB 02122021
Sovereign Bonds | -2% ₹514 Cr 51,506,600 182 DTB 16122021
Sovereign Bonds | -2% ₹499 Cr 50,000,000 91 DTB 16122021
Sovereign Bonds | -1% ₹351 Cr 35,191,300
↑ 2,500,000 91 DTB 23122021
Sovereign Bonds | -1% ₹299 Cr 30,000,000
↑ 30,000,000 JM Financial Capital Limited
Debentures | -1% ₹250 Cr 5,000
↑ 5,000 5. SBI Liquid Fund
CAGR/Annualized return of 7.1% since its launch. Ranked 40 in Liquid Fund category. Return for 2020 was 4.2% , 2019 was 6.5% and 2018 was 7.3% . SBI Liquid Fund
Growth Launch Date 22 Mar 07 NAV (03 Dec 21) ₹3,273.94 ↑ 0.33 (0.01 %) Net Assets (Cr) ₹49,644 on 31 Oct 21 Category Debt - Liquid Fund AMC SBI Funds Management Private Limited Rating ☆☆☆ Risk Low Expense Ratio 0.26 Sharpe Ratio -5.03 Information Ratio -4.08 Alpha Ratio -0.37 Min Investment 50,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 3.61% Effective Maturity 25 Days Modified Duration 25 Days Growth of 10,000 investment over the years.
Date Value 30 Nov 16 ₹10,000 30 Nov 17 ₹10,655 30 Nov 18 ₹11,425 30 Nov 19 ₹12,191 30 Nov 20 ₹12,724 30 Nov 21 ₹13,134 Returns for SBI Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 3 Dec 21 Duration Returns 1 Month 0.3% 3 Month 0.8% 6 Month 1.7% 1 Year 3.2% 3 Year 4.7% 5 Year 5.6% 10 Year 15 Year Since launch 7.1% Historical performance (Yearly) on absolute basis
Year Returns 2020 4.2% 2019 6.5% 2018 7.3% 2017 6.6% 2016 7.6% 2015 8.3% 2014 9% 2013 9.2% 2012 9.6% 2011 9% Fund Manager information for SBI Liquid Fund
Name Since Tenure R. Arun 7 May 18 3.49 Yr. Data below for SBI Liquid Fund as on 31 Oct 21
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 90.19% Corporate 8.97% Government 0.84% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 91 DTB 25112021
Sovereign Bonds | -9% ₹5,593 Cr 559,788,000 91 DTB 10022022
Sovereign Bonds | -4% ₹2,535 Cr 255,522,100
↑ 255,522,100 91 DTB 27012022
Sovereign Bonds | -3% ₹1,987 Cr 200,000,000 91 DTB 02022022
Sovereign Bonds | -3% ₹1,508 Cr 151,937,100
↑ 151,937,100 182 DTB 30122021
Sovereign Bonds | -2% ₹1,295 Cr 130,000,000 91 DTB 19112021
Sovereign Bonds | -2% ₹1,000 Cr 100,000,000 JM Financial Capital Limited
Debentures | -1% ₹824 Cr 16,500
↑ 16,500 91 DTB 09122021
Sovereign Bonds | -0% ₹257 Cr 25,768,700 Dalmia Cement Bharat Lmiited
Debentures | -0% ₹248 Cr 5,000
↑ 5,000 91 DTB 06012022
Sovereign Bonds | -0% ₹244 Cr 24,500,000 6. UTI Liquid Cash Plan
CAGR/Annualized return of 7% since its launch. Ranked 32 in Liquid Fund category. Return for 2020 was 4.2% , 2019 was 6.6% and 2018 was 7.4% . UTI Liquid Cash Plan
Growth Launch Date 11 Dec 03 NAV (03 Dec 21) ₹3,427.43 ↑ 0.31 (0.01 %) Net Assets (Cr) ₹25,609 on 31 Oct 21 Category Debt - Liquid Fund AMC UTI Asset Management Company Ltd Rating ☆☆☆ Risk Low Expense Ratio 0.25 Sharpe Ratio -5.3 Information Ratio -3.71 Alpha Ratio -0.35 Min Investment 500 Min SIP Investment 1,500 Exit Load NIL Yield to Maturity 3.62% Effective Maturity 27 Days Modified Duration 25 Days Growth of 10,000 investment over the years.
Date Value 30 Nov 16 ₹10,000 30 Nov 17 ₹10,666 30 Nov 18 ₹11,449 30 Nov 19 ₹12,233 30 Nov 20 ₹12,767 30 Nov 21 ₹13,180 Returns for UTI Liquid Cash Plan
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 3 Dec 21 Duration Returns 1 Month 0.3% 3 Month 0.8% 6 Month 1.7% 1 Year 3.2% 3 Year 4.8% 5 Year 5.7% 10 Year 15 Year Since launch 7% Historical performance (Yearly) on absolute basis
Year Returns 2020 4.2% 2019 6.6% 2018 7.4% 2017 6.7% 2016 7.7% 2015 8.3% 2014 9.1% 2013 9.1% 2012 9.6% 2011 8.9% Fund Manager information for UTI Liquid Cash Plan
Name Since Tenure Amandeep Chopra 14 Dec 06 14.89 Yr. Amit Sharma 7 Jul 17 4.32 Yr. Data below for UTI Liquid Cash Plan as on 31 Oct 21
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 84.8% Corporate 15.2% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 91 DTB 09122021
Sovereign Bonds | -7% ₹1,916 Cr 19,200,000,000
↑ 19,200,000,000 91 DTB 23122021
Sovereign Bonds | -3% ₹698 Cr 7,000,000,000 182 DTB 30122021
Sovereign Bonds | -2% ₹498 Cr 5,000,000,000 364 DTB 18112021
Sovereign Bonds | -1% ₹250 Cr 2,500,000,000 91 DTB 16122021
Sovereign Bonds | -1% ₹249 Cr 2,500,000,000 182 DTB 16122021
Sovereign Bonds | -1% ₹249 Cr 2,500,000,000 91 DTB 25112021
Sovereign Bonds | -1% ₹200 Cr 2,000,000,000 182 DTB 25112021
Sovereign Bonds | -1% ₹145 Cr 1,450,000,000 364 DTB 06012022
Sovereign Bonds | -1% ₹139 Cr 1,400,000,000 364 DTB 09122021
Sovereign Bonds | -0% ₹50 Cr 500,000,000
↑ 500,000,000
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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