Thursday, January 28, 2021
Home Investment Liquid Funds

Liquid Funds

Liquid funds are those debt funds which invest in various financial instruments such as commercial papers, treasury bills, government deposits and other securities having maturity at most 91 days. These funds contain high level of liquidity. Liquid funds are considered to be one of the best choices for excess income investment.

ADVANTAGES OF LIQUID FUND INVESTMENT

  • It ensures high level of liquidity and security as the investment is made in quality credit instruments like Treasury bills, Certificate of Deposit and Commercial paper.
  • When exposed to the variations in market rates, the Net Asset Value of liquid funds will not undergo much  variations. This is due to the average maturity of 91 days.
  • Liquid funds are considered to be risk-less comparing to similar funds.
  • Liquid funds are considered to be finer than savings bank deposits. This is because a depositor can have higher returns. These funds offer about 6.5%-8.5% return on average.
  • The investors can withdraw their funds whenever they want. therefore, it also acts as an emergency fund.

WHY SHOULD YOU INVEST IN LIQUID FUNDS?

These funds are suitable for those who are seeking choices to invest their excess cash or idle money as these deliver high level of liquidity and higher returns.

Liquid funds are acceptable for accomplishing short-range financial goals. Some funds create about 7%-9% returns while savings bank deposits offer 2.5%-4%. Therefore, these funds are recommended over savings bank deposits. The portfolio allocation of liquid funds is least-risky, less-volatile or default linked.

EXAMPLES OF HIGHLY PERFORMING LIQUID FUNDS IN INDIA

  • TATA LIQUID FUND
  • ADITYA BIRLA SUN LIFE MONEY MANAGER
  • MAHINDRA LIQUID FUND
  • LIC MF LIQUID FUND
  • IDBI LIQUID FUND
  • AXIS LIQUID FUND
  • KOTAK MONEY MARKET GROWTH

 

1 COMMENT

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisment -

Most Popular

How to check the IPO Allotment status?.

Open the Website of BSE India  -  BSE INDIA 2. Click on the below link to check the allotment status.          ...

Why Bandhan Bank share price is Falling?

The Assam Micro Finance Bill and the latest Quarter results has added more pains on the Bank. The Bandhan Bank, the private lender reported its...

Tata Motors hitting 28-month high – Things to remember

On Friday, Tata Motors's shares lengthened their winning streak to the 11th day after hitting a 28-month high of ₹261.50 on BSE. Since September...

IRFC IPO – Pros and cons

Indian Railway Finance Corporation (IRFC) is the borrowing division of the Indian Railways or in simple words, IRFC does financing for the Indian Railways. It...

Recent Comments