Liquid Funds (Mutual Funds)

Liquid Funds for Safe and short investment:

Looking to invest in Mutual funds but not sure of where to start with?

Best Liquid Funds to Invest in 2023 (Source: ClearTax)

Mutual fund 5 Yr. Returns 3 Yr. Returns
Baroda BNP Paribas Liquid Fund Direct Bonus
PGIM India Liquid Fund Direct Plan Annual Bonus Option
PGIM India Liquid Fund Annual Bonus Option
IDBI Liquid Fund Regular Bonus
Axis Liquid Fund Direct Plan Bonus
ICICI Prudential Liquid Fund Direct Plan Bonus
PGIM India Liquid Fund Monthly Bonus Option
PGIM India Liquid Fund Annual Payout Inc Dist cum Cap Wdrl

If You are thinking “What are the liquid fund” then to Start with Liquid Funds also known as Debt mutual funds/ Short term funds/ Ongoing types of Mutual funds, safe for investment.

In Liquid Funds, the money is invested in very short-term market instruments like government securities, term deposits, etc.

Liquid funds are the safest funds and the average maturity period of these kinds of funds is equal to or less than 90 days with average returns between 6 – 9% depending on the company to company.

Liquid Mutual Funds have almost no risk but provide low returns compared to ELSS, Equity, and Balanced funds but higher returns compared to bank deposits like FD and RD.

Planning to invest but are not aware of how to invest in liquid funds, then try investing through third-party Applications by investing the amount in SIP (Monthly) or Lumpsum (One time).

Features of Liquid Mutual Funds:

  • Full or partial withdrawal is possible with no exit load in these kinds of funds.
  • You can invest an amount as low as 1000rs (Lumpsum) to start within Liquid mutual funds.
  • If you need to withdraw money anytime then the amount will be credited within 30 minutes of the redemption request hence they are a safe investment.
  • Liquid mutual funds have zero exit load (except the first 7 days of the amount invested as per the new update) and the person can withdraw the money anytime as it has no lock-in period like ELSS funds or other TAX saving investment.

You can also check the mutual funds, performance, and returns through an online mutual funds calculator before investing the amount in Liquid Mutual funds.

Disadvantages of liquid funds:

  • Manly liquid funds are risk-free but this leads to the disadvantage of Low returns compared to other mutual funds,
  • Also, you can withdraw the money instantly within 30 minutes but not the full amount, few companies allow only around 60-80% of the invested amount to be withdrawn instantly and the rest like normal withdrawals in 2-3 working days.

These kinds of mutual funds are ideal to keep your spare money and get some good returns.

Few mutual fund companies:
  • HDFC liquid funds
  • Reliance liquid fund
  • Axis liquid fund
  • Icici liquid fund
  • SBI liquid fund

If wants a little more returns and are ready to take some risk, try investing in Equity funds and Balanced mutual funds.

If you want to invest only in a safe way to get fewer returns but sure/safe returns, invest in liquid mutual funds.

Try applications like Coin-Zerodha, ET Money, Groww, Mycams, Fisdom etc to invest in mutual funds.

Amit Singh Rawat_Knowandask

Amit Singh Rawat: Owner/ Founder of Knowandask a Digital Learning platform to educate yourself learn spread knowledge and share knowledge.

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