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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 Tata Liquid Fund Growth ₹3,245.89
↑ 0.12 ₹15,808 0.3 0.8 1.5 3.2 4.3 3.38% 1M 22D 1M 22D Aditya Birla Sun Life Liquid Fund Growth ₹331.484
↑ 0.01 ₹30,938 0.3 0.8 1.6 3.2 4.3 3.45% 1M 2D 1M 2D Axis Liquid Fund Growth ₹2,287.74
↑ 0.10 ₹25,040 0.3 0.8 1.6 3.2 4.3 0% ICICI Prudential Liquid Fund Growth ₹305.009
↑ 0.01 ₹40,714 0.3 0.8 1.5 3.2 4.3 3.4% 1M 5D 1M 7D Nippon India Liquid Fund Growth ₹5,029.75
↑ 0.17 ₹22,828 0.3 0.8 1.5 3.2 4.3 3.36% 1M 9D 1M 12D SBI Liquid Fund Growth ₹3,224
↑ 0.15 ₹49,743 0.3 0.8 1.6 3.2 4.2 3.34% 1M 10D 1M 10D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 16 Jun 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 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 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 1. Tata Liquid Fund
CAGR/Annualized return of 7.3% since its launch. Ranked 18 in Liquid Fund category. Return for 2020 was 4.3% , 2019 was 6.6% and 2018 was 7.4% . Tata Liquid Fund
Growth Launch Date 1 Sep 04 NAV (16 Jun 21) ₹3,245.89 ↑ 0.12 (0.00 %) Net Assets (Cr) ₹15,808 on 30 Apr 21 Category Debt - Liquid Fund AMC Tata Asset Management Limited Rating ☆☆☆☆ Risk Low Expense Ratio 0.34 Sharpe Ratio -3.41 Information Ratio -2.25 Alpha Ratio -0.58 Min Investment 5,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 3.38% Effective Maturity 1 Month 22 Days Modified Duration 1 Month 22 Days Growth of 10,000 investment over the years.
Date Value 31 May 16 ₹10,000 31 May 17 ₹10,702 31 May 18 ₹11,434 31 May 19 ₹12,297 31 May 20 ₹13,021 31 May 21 ₹13,438 Returns for Tata Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 16 Jun 21 Duration Returns 1 Month 0.3% 3 Month 0.8% 6 Month 1.5% 1 Year 3.2% 3 Year 5.5% 5 Year 6% 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 6.7% 2016 7.7% 2015 8.4% 2014 9.1% 2013 9.3% 2012 9.8% 2011 9% Fund Manager information for Tata Liquid Fund
Name Since Tenure Amit Somani 16 Oct 13 7.63 Yr. Abhishek Sonthalia 6 Feb 20 1.32 Yr. Data below for Tata Liquid Fund as on 30 Apr 21
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 78.9% Corporate 17.95% Government 3.15% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 91 DTB 08072021
Sovereign Bonds | -22% ₹3,523 Cr 354,500,000
↑ 354,500,000 364 DTB 13052021
Sovereign Bonds | -3% ₹499 Cr 50,000,000 91 DTB 30062021
Sovereign Bonds | -3% ₹497 Cr 50,000,000
↑ 50,000,000 BAJAJ HOUSING FINANCE LIMITED
Debentures | -3% ₹496 Cr 10,000
↑ 10,000 7.94% Govt Stock 2021
Sovereign Bonds | -3% ₹441 Cr 44,000,000 364 DTB 08072021
Sovereign Bonds | -2% ₹298 Cr 30,000,000
↑ 30,000,000 91 DTB 11062021
Sovereign Bonds | -2% ₹279 Cr 28,000,000
↑ 28,000,000 91 DTB 27052021
Sovereign Bonds | -2% ₹249 Cr 25,000,000 TVS Credit Services Ltd.
Debentures | -1% ₹148 Cr 3,000
↑ 3,000 8.69% U.P. GS 2021
Sovereign Bonds | -1% ₹131 Cr 13,000,000
↑ 13,000,000 2. Aditya Birla Sun Life Liquid Fund
CAGR/Annualized return of 7.2% 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 (16 Jun 21) ₹331.484 ↑ 0.01 (0.00 %) Net Assets (Cr) ₹30,938 on 30 Apr 21 Category Debt - Liquid Fund AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆☆ Risk Low Expense Ratio 0.28 Sharpe Ratio -2.12 Information Ratio -2.7 Alpha Ratio -0.51 Min Investment 5,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 3.45% Effective Maturity 1 Month 2 Days Modified Duration 1 Month 2 Days Growth of 10,000 investment over the years.
Date Value 31 May 16 ₹10,000 31 May 17 ₹10,699 31 May 18 ₹11,432 31 May 19 ₹12,294 31 May 20 ₹13,021 31 May 21 ₹13,448 Returns for Aditya Birla Sun Life Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 16 Jun 21 Duration Returns 1 Month 0.3% 3 Month 0.8% 6 Month 1.6% 1 Year 3.2% 3 Year 5.5% 5 Year 6.1% 10 Year 15 Year Since launch 7.2% 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 18 Jun 09 11.96 Yr. Kaustubh Gupta 15 Jul 11 9.89 Yr. Data below for Aditya Birla Sun Life Liquid Fund as on 30 Apr 21
Asset Allocation
Asset Class Value Cash 98.4% Debt 1.6% Debt Sector Allocation
Sector Value Cash Equivalent 57.32% Corporate 41.39% Government 1.29% Credit Quality
Rating Value AA 1.55% AAA 98.45% Top Securities Holdings / Portfolio
Name Holding Value Quantity 7.94% Govt Stock 2021
Sovereign Bonds | -3% ₹1,003 Cr 100,000,000 364 DTB 13052021
Sovereign Bonds | -3% ₹999 Cr 100,000,000 364 DTB 07052021
Sovereign Bonds | -3% ₹795 Cr 79,500,000
↓ -14,000,000 Indus Towers Limited
Debentures | -2% ₹496 Cr 10,000
↑ 10,000 364 DTB 27052021
Sovereign Bonds | -2% ₹484 Cr 48,500,000 364 DTB 03062021
Sovereign Bonds | -1% ₹349 Cr 35,000,000 Nabha Power Ltd.
Debentures | -1% ₹297 Cr 6,000
↑ 6,000 Muthoot Finance Limited
Debentures | -1% ₹156 Cr 1,550,000
↑ 1,550,000 Sundaram Finance Limited
Debentures | -0% ₹151 Cr 1,500
↑ 1,500 Tata Projects Limited
Debentures | -0% ₹149 Cr 3,000
↑ 3,000 3. Axis Liquid Fund
CAGR/Annualized return of 7.3% 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 (16 Jun 21) ₹2,287.74 ↑ 0.10 (0.00 %) Net Assets (Cr) ₹25,040 on 30 Apr 21 Category Debt - Liquid Fund AMC Axis Asset Management Company Limited Rating ☆☆☆☆ Risk Low Expense Ratio 0.16 Sharpe Ratio -3.44 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 31 May 16 ₹10,000 31 May 17 ₹10,702 31 May 18 ₹11,439 31 May 19 ₹12,306 31 May 20 ₹13,030 31 May 21 ₹13,452 Returns for Axis Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 16 Jun 21 Duration Returns 1 Month 0.3% 3 Month 0.8% 6 Month 1.6% 1 Year 3.2% 3 Year 5.5% 5 Year 6.1% 10 Year 15 Year Since launch 7.3% 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 8.57 Yr. Aditya Pagaria 13 Aug 16 4.8 Yr. Data below for Axis Liquid Fund as on 30 Apr 21
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 76.56% Corporate 22.64% Government 0.8% Credit Quality
Rating Value AA 0.91% AAA 99.09% Top Securities Holdings / Portfolio
Name Holding Value Quantity 364 DTB 27052021
Sovereign Bonds | -5% ₹1,257 Cr 126,000,000
↑ 3,500,000 91 DTB 30062021
Sovereign Bonds | -5% ₹1,129 Cr 113,500,000
↑ 78,500,000 91 DTB 17062021
Sovereign Bonds | -4% ₹1,095 Cr 110,000,000
↑ 80,000,000 91 DTB 27052021
Sovereign Bonds | -4% ₹1,048 Cr 105,000,000 91 DTB 11062021
Sovereign Bonds | -3% ₹847 Cr 85,000,000
↑ 47,500,000 91 DTB 08072021
Sovereign Bonds | -3% ₹780 Cr 78,500,000
↑ 78,500,000 364 DTB 03062021
Sovereign Bonds | -3% ₹668 Cr 67,000,000
↓ -8,500,000 182 DTB 13052021
Sovereign Bonds | -3% ₹664 Cr 66,500,000 364 DTB 13052021
Sovereign Bonds | -2% ₹509 Cr 51,000,000
↓ -5,000,000 91 DTB 13052021
Sovereign Bonds | -2% ₹385 Cr 38,500,000
↑ 9,000,000 4. ICICI Prudential Liquid Fund
CAGR/Annualized return of 7.4% 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 (16 Jun 21) ₹305.009 ↑ 0.01 (0.00 %) Net Assets (Cr) ₹40,714 on 30 Apr 21 Category Debt - Liquid Fund AMC ICICI Prudential Asset Management Company Limited Rating ☆☆☆☆ Risk Low Expense Ratio 0.26 Sharpe Ratio -2.57 Information Ratio -2.93 Alpha Ratio -0.54 Min Investment 500 Min SIP Investment 99 Exit Load NIL Yield to Maturity 3.4% Effective Maturity 1 Month 7 Days Modified Duration 1 Month 5 Days Growth of 10,000 investment over the years.
Date Value 31 May 16 ₹10,000 31 May 17 ₹10,701 31 May 18 ₹11,429 31 May 19 ₹12,287 31 May 20 ₹13,005 31 May 21 ₹13,427 Returns for ICICI Prudential Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 16 Jun 21 Duration Returns 1 Month 0.3% 3 Month 0.8% 6 Month 1.5% 1 Year 3.2% 3 Year 5.5% 5 Year 6% 10 Year 15 Year Since launch 7.4% 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 8.68 Yr. Rohan Maru 19 Sep 13 7.7 Yr. Data below for ICICI Prudential Liquid Fund as on 30 Apr 21
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 75.09% Corporate 23.07% Government 1.84% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 91 DTB 29072021
Sovereign Bonds | -7% ₹2,976 Cr 300,000,000
↑ 300,000,000 91 DTB 22072021
Sovereign Bonds | -6% ₹2,422 Cr 243,957,600
↑ 243,957,600 91 DTB 20052021
Sovereign Bonds | -4% ₹1,678 Cr 168,045,700 91 DTB 13052021
Sovereign Bonds | -4% ₹1,671 Cr 167,230,000 7.94% Govt Stock 2021
Sovereign Bonds | -4% ₹1,635 Cr 163,000,000 182 DTB 08072021
Sovereign Bonds | -1% ₹584 Cr 58,771,100
↑ 58,771,100 364 DTB 03062021
Sovereign Bonds | -1% ₹499 Cr 50,000,000 91 DTB 24062021
Sovereign Bonds | -1% ₹498 Cr 50,000,000 7.99% PN SDL 2021
Sovereign Bonds | -1% ₹327 Cr 32,500,000 364 DTB 08072021
Sovereign Bonds | -1% ₹298 Cr 30,000,000
↑ 30,000,000 5. Nippon India Liquid Fund
CAGR/Annualized return of 7.1% 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 (16 Jun 21) ₹5,029.75 ↑ 0.17 (0.00 %) Net Assets (Cr) ₹22,828 on 30 Apr 21 Category Debt - Liquid Fund AMC Nippon Life Asset Management Ltd. Rating ☆☆☆☆ Risk Low Expense Ratio 0.26 Sharpe Ratio -2.65 Information Ratio -2.55 Alpha Ratio -0.56 Min Investment 100 Min SIP Investment 100 Exit Load NIL Yield to Maturity 3.36% Effective Maturity 1 Month 12 Days Modified Duration 1 Month 9 Days Growth of 10,000 investment over the years.
Date Value 31 May 16 ₹10,000 31 May 17 ₹10,702 31 May 18 ₹11,433 31 May 19 ₹12,302 31 May 20 ₹13,029 31 May 21 ₹13,449 Returns for Nippon India Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 16 Jun 21 Duration Returns 1 Month 0.3% 3 Month 0.8% 6 Month 1.5% 1 Year 3.2% 3 Year 5.5% 5 Year 6.1% 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 8.3% 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 7.67 Yr. Kinjal Desai 25 May 18 3.02 Yr. Data below for Nippon India Liquid Fund as on 30 Apr 21
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 71.94% Corporate 26.21% Government 1.86% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 91 DTB 15072021
Sovereign Bonds | -13% ₹3,079 Cr 310,000,000
↑ 310,000,000 364 DTB 03062021
Sovereign Bonds | -6% ₹1,356 Cr 136,000,000
↓ -4,000,000 364 DTB 13052021
Sovereign Bonds | -4% ₹961 Cr 96,232,500 7.94% Govt Stock 2021
Sovereign Bonds | -4% ₹888 Cr 88,500,000
↓ -53,000,000 364 DTB 20052021
Sovereign Bonds | -2% ₹409 Cr 41,000,000 91 DTB 22072021
Sovereign Bonds | -1% ₹248 Cr 25,000,000
↑ 25,000,000 Housing Development Finance Corporation Limited
Debentures | -1% ₹150 Cr 100 364 DTB 27052021
Sovereign Bonds | -1% ₹125 Cr 12,500,000
↓ -7,500,000 Sterlite Tech Ltd
Debentures | -0% ₹99 Cr 2,000
↑ 2,000 91 DTB 17062021
Sovereign Bonds | -0% ₹85 Cr 8,500,000
↓ -31,500,000 6. SBI Liquid Fund
CAGR/Annualized return of 7.2% 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 (16 Jun 21) ₹3,224 ↑ 0.15 (0.00 %) Net Assets (Cr) ₹49,743 on 30 Apr 21 Category Debt - Liquid Fund AMC SBI Funds Management Private Limited Rating ☆☆☆ Risk Low Expense Ratio 0.25 Sharpe Ratio -3.31 Information Ratio -3.77 Alpha Ratio -0.55 Min Investment 50,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 3.34% Effective Maturity 1 Month 10 Days Modified Duration 1 Month 10 Days Growth of 10,000 investment over the years.
Date Value 31 May 16 ₹10,000 31 May 17 ₹10,688 31 May 18 ₹11,408 31 May 19 ₹12,256 31 May 20 ₹12,957 31 May 21 ₹13,375 Returns for SBI Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 16 Jun 21 Duration Returns 1 Month 0.3% 3 Month 0.8% 6 Month 1.6% 1 Year 3.2% 3 Year 5.4% 5 Year 5.9% 10 Year 15 Year Since launch 7.2% 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 3.07 Yr. Data below for SBI Liquid Fund as on 30 Apr 21
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 71.54% Corporate 22.84% Government 5.62% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 91 DTB 08072021
Sovereign Bonds | -7% ₹3,608 Cr 363,000,000
↑ 363,000,000 91 DTB 15072021
Sovereign Bonds | -7% ₹3,370 Cr 339,275,000
↑ 339,275,000 364 DTB 01072021
Sovereign Bonds | -5% ₹2,521 Cr 253,469,300
↑ 253,469,300 364 DTB 03062021
Sovereign Bonds | -4% ₹1,994 Cr 200,000,000 6.17% Govt Stock 2021
Sovereign Bonds | -4% ₹1,760 Cr 174,991,000
↑ 174,991,000 7.94% Govt Stock 2021
Sovereign Bonds | -3% ₹1,733 Cr 172,825,000 364 DTB 07052021
Sovereign Bonds | -3% ₹1,284 Cr 128,500,000 364 DTB 27052021
Sovereign Bonds | -2% ₹998 Cr 100,000,000 91 DTB 06052021
Sovereign Bonds | -2% ₹750 Cr 75,000,000 182 DTB 15072021
Sovereign Bonds | -1% ₹720 Cr 72,500,000
↑ 72,500,000
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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