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Liquid Assets: Overview & Benefits

Updated on August 7, 2025 , 14945 views

Liquid assets are assets that can be easily converted into cash with minimum impact on the asset’s value. Liquid assets keep your money accessible anytime you want. An asset is only considered liquid when it is in an established Market and there are lots of interested buyers so that the asset does not get easily changed or manipulated. Also, the investors must have the ability to transfer the ownership of these assets easily.

Liquid Assets Benefits

Keep Cash Handy

The most significant benefit of Liquid Assets is that they keep your cash available whenever you need them. Emergencies come uninformed. The investors are often advised to maintain some assets in their Portfolio so that they can have an easy hand on their money at the time of unforeseen emergencies.

Investing Benefits

Holding Liquid Assets, like Money market funds, is highly beneficial for your investment portfolio. Not only these assets keep your money available for emergencies, but one can use them for further investments as well. At any time, you can utilise your asset to make new investments without selling any other investments.

Less Risky

Another advantage of these assets is that they are comparatively less risky than assets that are not liquid. During the times of market emergency, these assets can be sold swiftly and at a full value, unlike Non-Liquid Assets. Also, some of these assets, like the Savings Account, keep your money safe at the time of financial crisis as they are insured up to a certain amount by the federal government. Unlike Illiquid assets like Real Estate that may not be sold at the time of emergency or may be sold at a considerable discount to true value. So, with these assets, there is a very little chance of losing value.

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Improves Financial Profile

Finally, with Liquid Assets in a portfolio, the chances of loan approval increases. It shows your discipline to keep your money safe and ensures that you will make regular payments.

Examples of Liquid Assets

The most common types of Liquid Assets owned by investors include cash and savings account. But, there are some other assets that are considered to be liquid as they are established in the market and can be transferred between owners easily. These include-

Liquid-assets

Therefore, the investors are advised to maintain some Liquid Assets in their portfolio. Invest in the above-mentioned assets and have your cash available with least effort. Additionally, earn better returns on these assets as well. Invest now or regret later!

Best Money Market Funds for Liquid Assets

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)5 YR (%)2024 (%)
Aditya Birla Sun Life Money Manager Fund Growth ₹373.468
↑ 0.05
₹29,9091.94.287.56.17.8
UTI Money Market Fund Growth ₹3,112.74
↑ 0.36
₹18,3541.94.28.17.66.17.7
ICICI Prudential Money Market Fund Growth ₹383.067
↑ 0.05
₹29,2641.94.287.567.7
Kotak Money Market Scheme Growth ₹4,532.46
↑ 0.55
₹31,0391.94.287.567.7
Franklin India Savings Fund Growth ₹50.6384
↑ 0.01
₹3,4411.94.287.45.97.7
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 8 Aug 25

Research Highlights & Commentary of 5 Funds showcased

CommentaryAditya Birla Sun Life Money Manager FundUTI Money Market FundICICI Prudential Money Market FundKotak Money Market SchemeFranklin India Savings Fund
Point 1Upper mid AUM (₹29,909 Cr).Bottom quartile AUM (₹18,354 Cr).Lower mid AUM (₹29,264 Cr).Highest AUM (₹31,039 Cr).Bottom quartile AUM (₹3,441 Cr).
Point 2Established history (19+ yrs).Established history (16+ yrs).Established history (19+ yrs).Established history (22+ yrs).Oldest track record among peers (23 yrs).
Point 3Top rated.Rating: 4★ (upper mid).Rating: 4★ (lower mid).Rating: 4★ (bottom quartile).Rating: 3★ (bottom quartile).
Point 4Risk profile: Low.Risk profile: Low.Risk profile: Low.Risk profile: Low.Risk profile: Moderately Low.
Point 51Y return: 7.98% (bottom quartile).1Y return: 8.05% (top quartile).1Y return: 8.02% (lower mid).1Y return: 7.96% (bottom quartile).1Y return: 8.03% (upper mid).
Point 61M return: 0.48% (top quartile).1M return: 0.47% (upper mid).1M return: 0.46% (bottom quartile).1M return: 0.46% (bottom quartile).1M return: 0.47% (lower mid).
Point 7Sharpe: 3.32 (top quartile).Sharpe: 3.32 (upper mid).Sharpe: 3.15 (bottom quartile).Sharpe: 3.16 (lower mid).Sharpe: 3.09 (bottom quartile).
Point 8Information ratio: 0.00 (top quartile).Information ratio: 0.00 (upper mid).Information ratio: 0.00 (lower mid).Information ratio: 0.00 (bottom quartile).Information ratio: 0.00 (bottom quartile).
Point 9Yield to maturity (debt): 6.67% (top quartile).Yield to maturity (debt): 6.30% (bottom quartile).Yield to maturity (debt): 6.33% (lower mid).Yield to maturity (debt): 6.29% (bottom quartile).Yield to maturity (debt): 6.46% (upper mid).
Point 10Modified duration: 0.57 yrs (top quartile).Modified duration: 0.62 yrs (lower mid).Modified duration: 0.64 yrs (bottom quartile).Modified duration: 0.60 yrs (upper mid).Modified duration: 0.69 yrs (bottom quartile).

Aditya Birla Sun Life Money Manager Fund

  • Upper mid AUM (₹29,909 Cr).
  • Established history (19+ yrs).
  • Top rated.
  • Risk profile: Low.
  • 1Y return: 7.98% (bottom quartile).
  • 1M return: 0.48% (top quartile).
  • Sharpe: 3.32 (top quartile).
  • Information ratio: 0.00 (top quartile).
  • Yield to maturity (debt): 6.67% (top quartile).
  • Modified duration: 0.57 yrs (top quartile).

UTI Money Market Fund

  • Bottom quartile AUM (₹18,354 Cr).
  • Established history (16+ yrs).
  • Rating: 4★ (upper mid).
  • Risk profile: Low.
  • 1Y return: 8.05% (top quartile).
  • 1M return: 0.47% (upper mid).
  • Sharpe: 3.32 (upper mid).
  • Information ratio: 0.00 (upper mid).
  • Yield to maturity (debt): 6.30% (bottom quartile).
  • Modified duration: 0.62 yrs (lower mid).

ICICI Prudential Money Market Fund

  • Lower mid AUM (₹29,264 Cr).
  • Established history (19+ yrs).
  • Rating: 4★ (lower mid).
  • Risk profile: Low.
  • 1Y return: 8.02% (lower mid).
  • 1M return: 0.46% (bottom quartile).
  • Sharpe: 3.15 (bottom quartile).
  • Information ratio: 0.00 (lower mid).
  • Yield to maturity (debt): 6.33% (lower mid).
  • Modified duration: 0.64 yrs (bottom quartile).

Kotak Money Market Scheme

  • Highest AUM (₹31,039 Cr).
  • Established history (22+ yrs).
  • Rating: 4★ (bottom quartile).
  • Risk profile: Low.
  • 1Y return: 7.96% (bottom quartile).
  • 1M return: 0.46% (bottom quartile).
  • Sharpe: 3.16 (lower mid).
  • Information ratio: 0.00 (bottom quartile).
  • Yield to maturity (debt): 6.29% (bottom quartile).
  • Modified duration: 0.60 yrs (upper mid).

Franklin India Savings Fund

  • Bottom quartile AUM (₹3,441 Cr).
  • Oldest track record among peers (23 yrs).
  • Rating: 3★ (bottom quartile).
  • Risk profile: Moderately Low.
  • 1Y return: 8.03% (upper mid).
  • 1M return: 0.47% (lower mid).
  • Sharpe: 3.09 (bottom quartile).
  • Information ratio: 0.00 (bottom quartile).
  • Yield to maturity (debt): 6.46% (upper mid).
  • Modified duration: 0.69 yrs (bottom quartile).

Disclaimer:
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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