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6 Best Liquid Mutual Funds 2025
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 25 - 26
Fund NAV Net Assets (Cr) 1 MO (%) 3 MO (%) 6 MO (%) 1 YR (%) 2023 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity Axis Liquid Fund Growth ₹2,880.2
↑ 0.40 ₹32,609 0.5 1.8 3.6 7.3 7.4 7.08% 2M 4D 2M 4D DSP BlackRock Liquidity Fund Growth ₹3,692.88
↑ 0.51 ₹15,829 0.5 1.8 3.6 7.3 7.4 6.95% 1M 20D 1M 28D Invesco India Liquid Fund Growth ₹3,555.31
↑ 0.48 ₹10,945 0.5 1.8 3.6 7.3 7.4 7.01% 2M 5D 2M 5D ICICI Prudential Liquid Fund Growth ₹382.971
↑ 0.06 ₹42,293 0.5 1.8 3.6 7.3 7.4 6.99% 2M 5D 2M 10D Aditya Birla Sun Life Liquid Fund Growth ₹416.841
↑ 0.06 ₹41,051 0.5 1.8 3.6 7.3 7.3 7.2% 2M 8D 2M 8D UTI Liquid Cash Plan Growth ₹4,243.72
↑ 0.57 ₹23,383 0.5 1.8 3.6 7.3 7.3 7% 2M 2D 2M 2D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 7 May 25 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.
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 The Scheme seeks to generate reasonable returns commensurate with low risk from a portfolio constituted of money market and high quality debts DSP BlackRock Liquidity Fund is a Debt - Liquid Fund fund was launched on 23 Nov 05. It is a fund with Low risk and has given a Below is the key information for DSP BlackRock Liquidity Fund Returns up to 1 year are on To provide reasonable returns, commensurate with low risk while providing a high level of liquidity, through a portfolio of money market and debt securities. Invesco India Liquid Fund is a Debt - Liquid Fund fund was launched on 17 Nov 06. It is a fund with Low risk and has given a Below is the key information for Invesco India 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 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 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. Axis Liquid Fund
CAGR/Annualized return of 7% since its launch. Ranked 21 in Liquid Fund category. Return for 2024 was 7.4% , 2023 was 7.1% and 2022 was 4.9% . Axis Liquid Fund
Growth Launch Date 9 Oct 09 NAV (07 May 25) ₹2,880.2 ↑ 0.40 (0.01 %) Net Assets (Cr) ₹32,609 on 31 Mar 25 Category Debt - Liquid Fund AMC Axis Asset Management Company Limited Rating ☆☆☆☆ Risk Low Expense Ratio 0.23 Sharpe Ratio 3.09 Information Ratio 0 Alpha Ratio 0 Min Investment 500 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 7.08% Effective Maturity 2 Months 4 Days Modified Duration 2 Months 4 Days Growth of 10,000 investment over the years.
Date Value 30 Apr 20 ₹10,000 30 Apr 21 ₹10,340 30 Apr 22 ₹10,695 30 Apr 23 ₹11,337 30 Apr 24 ₹12,164 30 Apr 25 ₹13,054 Returns for Axis Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 7 May 25 Duration Returns 1 Month 0.5% 3 Month 1.8% 6 Month 3.6% 1 Year 7.3% 3 Year 6.9% 5 Year 5.5% 10 Year 15 Year Since launch 7% Historical performance (Yearly) on absolute basis
Year Returns 2023 7.4% 2022 7.1% 2021 4.9% 2020 3.3% 2019 4.3% 2018 6.6% 2017 7.5% 2016 6.7% 2015 7.6% 2014 8.4% Fund Manager information for Axis Liquid Fund
Name Since Tenure Devang Shah 5 Nov 12 12.41 Yr. Aditya Pagaria 13 Aug 16 8.64 Yr. Sachin Jain 3 Jul 23 1.75 Yr. Data below for Axis Liquid Fund as on 31 Mar 25
Asset Allocation
Asset Class Value Cash 99.82% Other 0.18% Debt Sector Allocation
Sector Value Cash Equivalent 77.53% Corporate 21.43% Government 0.86% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 91 Days Tbill Red 05-06-2025
Sovereign Bonds | -5% ₹2,232 Cr 225,000,000
↑ 225,000,000 Clearing Corporation Of India Ltd
CBLO/Reverse Repo | -4% ₹1,984 Cr 91 Days Tbill
Sovereign Bonds | -4% ₹1,781 Cr 178,500,000 Canara Bank (09/06/2025)
Certificate of Deposit | -3% ₹1,486 Cr 30,000 Export Import Bank Of India 09-Jun-2025 **
Commercial Paper | -3% ₹1,412 Cr 28,500 National Bank For Agriculture And Rural Development
Commercial Paper | -3% ₹1,393 Cr 28,000
↑ 20,000 91 Days Tbill Red 12-06-2025
Sovereign Bonds | -3% ₹1,288 Cr 130,000,000
↑ 130,000,000 Reliance Industries Ltd.
Commercial Paper | -3% ₹1,284 Cr 26,000
↑ 26,000 National Bank For Agriculture And Rural Development (10/06/2025) **
Commercial Paper | -3% ₹1,223 Cr 24,700
↑ 24,700 Reliance Retail Ventures Limited
Commercial Paper | -2% ₹1,019 Cr 20,500 2. DSP BlackRock Liquidity Fund
CAGR/Annualized return of 6.9% since its launch. Ranked 36 in Liquid Fund category. Return for 2024 was 7.4% , 2023 was 7% and 2022 was 4.8% . DSP BlackRock Liquidity Fund
Growth Launch Date 23 Nov 05 NAV (07 May 25) ₹3,692.88 ↑ 0.51 (0.01 %) Net Assets (Cr) ₹15,829 on 31 Mar 25 Category Debt - Liquid Fund AMC DSP BlackRock Invmt Managers Pvt. Ltd. Rating ☆☆☆ Risk Low Expense Ratio 0.24 Sharpe Ratio 3.46 Information Ratio 0 Alpha Ratio 0 Min Investment 1,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 6.95% Effective Maturity 1 Month 28 Days Modified Duration 1 Month 20 Days Growth of 10,000 investment over the years.
Date Value 30 Apr 20 ₹10,000 30 Apr 21 ₹10,330 30 Apr 22 ₹10,681 30 Apr 23 ₹11,312 30 Apr 24 ₹12,131 30 Apr 25 ₹13,017 Returns for DSP BlackRock Liquidity Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 7 May 25 Duration Returns 1 Month 0.5% 3 Month 1.8% 6 Month 3.6% 1 Year 7.3% 3 Year 6.8% 5 Year 5.4% 10 Year 15 Year Since launch 6.9% Historical performance (Yearly) on absolute basis
Year Returns 2023 7.4% 2022 7% 2021 4.8% 2020 3.3% 2019 4.2% 2018 6.5% 2017 7.4% 2016 6.6% 2015 7.6% 2014 8.3% Fund Manager information for DSP BlackRock Liquidity Fund
Name Since Tenure Karan Mundhra 31 May 21 3.84 Yr. Shalini Vasanta 1 Aug 24 0.67 Yr. Data below for DSP BlackRock Liquidity Fund as on 31 Mar 25
Asset Allocation
Asset Class Value Cash 99.79% Other 0.21% Debt Sector Allocation
Sector Value Cash Equivalent 74.52% Corporate 25.23% Government 0.05% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Treps / Reverse Repo Investments
CBLO/Reverse Repo | -7% ₹1,495 Cr National Bank for Agriculture and Rural Development
Commercial Paper | -3% ₹591 Cr 12,000
↑ 12,000 HDFC Bank Ltd. ** #
Certificate of Deposit | -3% ₹544 Cr 11,000
↑ 3,000 National Bank For Agriculture And Rural Development
Commercial Paper | -2% ₹498 Cr 10,000 Union Bank Of India**
Certificate of Deposit | -2% ₹496 Cr 10,000 Small Industries Development Bank of India
Commercial Paper | -2% ₹493 Cr 10,000
↑ 10,000 Canara Bank
Certificate of Deposit | -2% ₹487 Cr 9,800 91 Days Tbill
Sovereign Bonds | -2% ₹469 Cr 47,000,000 182 Days Tbill (Md 01/05/2025)
Sovereign Bonds | -2% ₹454 Cr 45,500,000 Bank Of Baroda
Certificate of Deposit | -2% ₹446 Cr 9,000 3. Invesco India Liquid Fund
CAGR/Annualized return of 7.1% since its launch. Ranked 9 in Liquid Fund category. Return for 2024 was 7.4% , 2023 was 7% and 2022 was 4.8% . Invesco India Liquid Fund
Growth Launch Date 17 Nov 06 NAV (07 May 25) ₹3,555.31 ↑ 0.48 (0.01 %) Net Assets (Cr) ₹10,945 on 31 Mar 25 Category Debt - Liquid Fund AMC Invesco Asset Management (India) Private Ltd Rating ☆☆☆☆ Risk Low Expense Ratio 0.22 Sharpe Ratio 3.17 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 7.01% Effective Maturity 2 Months 5 Days Modified Duration 2 Months 5 Days Growth of 10,000 investment over the years.
Date Value 30 Apr 20 ₹10,000 30 Apr 21 ₹10,334 30 Apr 22 ₹10,686 30 Apr 23 ₹11,319 30 Apr 24 ₹12,140 30 Apr 25 ₹13,026 Returns for Invesco India Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 7 May 25 Duration Returns 1 Month 0.5% 3 Month 1.8% 6 Month 3.6% 1 Year 7.3% 3 Year 6.9% 5 Year 5.4% 10 Year 15 Year Since launch 7.1% Historical performance (Yearly) on absolute basis
Year Returns 2023 7.4% 2022 7% 2021 4.8% 2020 3.3% 2019 4.1% 2018 6.5% 2017 7.4% 2016 6.7% 2015 7.6% 2014 8.4% Fund Manager information for Invesco India Liquid Fund
Name Since Tenure Krishna Cheemalapati 25 Apr 11 13.94 Yr. Prateek Jain 14 Feb 22 3.13 Yr. Data below for Invesco India Liquid Fund as on 31 Mar 25
Asset Allocation
Asset Class Value Cash 99.79% Other 0.21% Debt Sector Allocation
Sector Value Cash Equivalent 78.91% Corporate 20.54% Government 0.34% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity HDFC Bank Ltd. ** #
Certificate of Deposit | -3% ₹495 Cr 50,000,000 91 DTB 30052025
Sovereign Bonds | -3% ₹492 Cr 49,500,000 Punjab National Bank ** #
Certificate of Deposit | -3% ₹470 Cr 47,500,000
↓ -2,500,000 91 Days Tbill Red 05-06-2025
Sovereign Bonds | -3% ₹446 Cr 45,000,000 Bank Of Baroda 2025 ** #
Net Current Assets | -3% ₹394 Cr 40,000,000
↑ 40,000,000 182 Days Tbill (Md 01/05/2025)
Sovereign Bonds | -2% ₹339 Cr 34,000,000 Axis Bank Ltd.
Certificate of Deposit | -2% ₹298 Cr 30,000,000 National Bank For Agriculture And Rural Development 16-Jun-2025 **
Commercial Paper | -2% ₹297 Cr 30,000,000
↑ 30,000,000 Union Bank of India
Domestic Bonds | -2% ₹297 Cr 30,000,000 Canara Bank (17/06/2025)
Certificate of Deposit | -2% ₹297 Cr 30,000,000 4. ICICI Prudential Liquid Fund
CAGR/Annualized return of 7.1% since its launch. Ranked 20 in Liquid Fund category. Return for 2024 was 7.4% , 2023 was 7% and 2022 was 4.8% . ICICI Prudential Liquid Fund
Growth Launch Date 17 Nov 05 NAV (07 May 25) ₹382.971 ↑ 0.06 (0.01 %) Net Assets (Cr) ₹42,293 on 31 Mar 25 Category Debt - Liquid Fund AMC ICICI Prudential Asset Management Company Limited Rating ☆☆☆☆ Risk Low Expense Ratio 0.29 Sharpe Ratio 2.88 Information Ratio -1.48 Alpha Ratio -0.19 Min Investment 500 Min SIP Investment 99 Exit Load NIL Yield to Maturity 6.99% Effective Maturity 2 Months 10 Days Modified Duration 2 Months 5 Days Growth of 10,000 investment over the years.
Date Value 30 Apr 20 ₹10,000 30 Apr 21 ₹10,343 30 Apr 22 ₹10,691 30 Apr 23 ₹11,321 30 Apr 24 ₹12,140 30 Apr 25 ₹13,023 Returns for ICICI Prudential Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 7 May 25 Duration Returns 1 Month 0.5% 3 Month 1.8% 6 Month 3.6% 1 Year 7.3% 3 Year 6.8% 5 Year 5.4% 10 Year 15 Year Since launch 7.1% Historical performance (Yearly) on absolute basis
Year Returns 2023 7.4% 2022 7% 2021 4.8% 2020 3.2% 2019 4.3% 2018 6.6% 2017 7.4% 2016 6.6% 2015 7.7% 2014 8.3% Fund Manager information for ICICI Prudential Liquid Fund
Name Since Tenure Nikhil Kabra 1 Dec 23 1.33 Yr. Darshil Dedhia 12 Jun 23 1.8 Yr. Data below for ICICI Prudential Liquid Fund as on 31 Mar 25
Asset Allocation
Asset Class Value Cash 99.77% Other 0.23% Debt Sector Allocation
Sector Value Cash Equivalent 74.25% Corporate 19.94% Government 5.58% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 91 Days Tbill Red 12-06-2025
Sovereign Bonds | -7% ₹3,964 Cr 400,000,000
↑ 400,000,000 91 Days Tbill Red 19-06-2025
Sovereign Bonds | -4% ₹2,475 Cr 250,000,000 Punjab National Bank ** #
Certificate of Deposit | -4% ₹2,226 Cr 45,000 IDBI Bank Limited (Industrial Development Bank Of India Ltd)
Certificate of Deposit | -3% ₹1,494 Cr 30,000 91 Days Tbill Red 05-06-2025
Sovereign Bonds | -3% ₹1,488 Cr 150,000,000 Small Industries Development Bank of India
Commercial Paper | -3% ₹1,480 Cr 30,000
↑ 30,000 India (Republic of)
- | -3% ₹1,480 Cr 150,000,000
↑ 150,000,000 HDFC Bank Limited
Certificate of Deposit | -2% ₹1,341 Cr 27,000 National Bank For Agriculture And Rural Development
Commercial Paper | -2% ₹1,296 Cr 26,000 Punjab National Bank
Certificate of Deposit | -2% ₹1,241 Cr 25,000 5. Aditya Birla Sun Life Liquid Fund
CAGR/Annualized return of 7% since its launch. Ranked 15 in Liquid Fund category. Return for 2024 was 7.3% , 2023 was 7.1% and 2022 was 4.8% . Aditya Birla Sun Life Liquid Fund
Growth Launch Date 30 Mar 04 NAV (07 May 25) ₹416.841 ↑ 0.06 (0.01 %) Net Assets (Cr) ₹41,051 on 31 Mar 25 Category Debt - Liquid Fund AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆☆ Risk Low Expense Ratio 0.34 Sharpe Ratio 2.96 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 7.2% Effective Maturity 2 Months 8 Days Modified Duration 2 Months 8 Days Growth of 10,000 investment over the years.
Date Value 30 Apr 20 ₹10,000 30 Apr 21 ₹10,347 30 Apr 22 ₹10,700 30 Apr 23 ₹11,340 30 Apr 24 ₹12,162 30 Apr 25 ₹13,049 Returns for Aditya Birla Sun Life Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 7 May 25 Duration Returns 1 Month 0.5% 3 Month 1.8% 6 Month 3.6% 1 Year 7.3% 3 Year 6.9% 5 Year 5.5% 10 Year 15 Year Since launch 7% Historical performance (Yearly) on absolute basis
Year Returns 2023 7.3% 2022 7.1% 2021 4.8% 2020 3.3% 2019 4.3% 2018 6.7% 2017 7.4% 2016 6.7% 2015 7.7% 2014 8.4% Fund Manager information for Aditya Birla Sun Life Liquid Fund
Name Since Tenure Sunaina Cunha 15 Jul 11 13.72 Yr. Kaustubh Gupta 15 Jul 11 13.72 Yr. Sanjay Pawar 1 Jul 22 2.75 Yr. Data below for Aditya Birla Sun Life Liquid Fund as on 31 Mar 25
Asset Allocation
Asset Class Value Cash 99.8% Other 0.2% Debt Sector Allocation
Sector Value Cash Equivalent 79.71% Corporate 20.09% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Net Receivables / (Payables)
CBLO | -7% -₹3,932 Cr 91 Days Tbill
Sovereign Bonds | -4% ₹1,995 Cr 200,000,000 National Bank for Agriculture and Rural Development
Commercial Paper | -3% ₹1,483 Cr 30,000 Punjab National Bank
Certificate of Deposit | -2% ₹1,240 Cr 25,000 HDFC Bank Limited
Certificate of Deposit | -2% ₹1,216 Cr 24,500 91 DTB 30052025
Sovereign Bonds | -2% ₹1,132 Cr 114,017,700
↑ 114,017,700 National Bank For Agriculture And Rural Development
Commercial Paper | -2% ₹997 Cr 20,000 HDFC Bank Ltd.
Debentures | -2% ₹987 Cr 20,000
↑ 20,000 National Bank for Agriculture and Rural Development
Commercial Paper | -2% ₹984 Cr 20,000
↑ 20,000 Rbl Bank Limited
Certificate of Deposit | -2% ₹940 Cr 19,000
↑ 19,000 6. UTI Liquid Cash Plan
CAGR/Annualized return of 6.9% since its launch. Ranked 32 in Liquid Fund category. Return for 2024 was 7.3% , 2023 was 7% and 2022 was 4.8% . UTI Liquid Cash Plan
Growth Launch Date 11 Dec 03 NAV (07 May 25) ₹4,243.72 ↑ 0.57 (0.01 %) Net Assets (Cr) ₹23,383 on 31 Mar 25 Category Debt - Liquid Fund AMC UTI Asset Management Company Ltd Rating ☆☆☆ Risk Low Expense Ratio 0.26 Sharpe Ratio 2.82 Information Ratio 0 Alpha Ratio 0 Min Investment 500 Min SIP Investment 1,500 Exit Load NIL Yield to Maturity 7% Effective Maturity 2 Months 2 Days Modified Duration 2 Months 2 Days Growth of 10,000 investment over the years.
Date Value 30 Apr 20 ₹10,000 30 Apr 21 ₹10,341 30 Apr 22 ₹10,694 30 Apr 23 ₹11,332 30 Apr 24 ₹12,152 30 Apr 25 ₹13,038 Returns for UTI Liquid Cash Plan
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 7 May 25 Duration Returns 1 Month 0.5% 3 Month 1.8% 6 Month 3.6% 1 Year 7.3% 3 Year 6.9% 5 Year 5.5% 10 Year 15 Year Since launch 6.9% Historical performance (Yearly) on absolute basis
Year Returns 2023 7.3% 2022 7% 2021 4.8% 2020 3.3% 2019 4.2% 2018 6.6% 2017 7.4% 2016 6.7% 2015 7.7% 2014 8.3% Fund Manager information for UTI Liquid Cash Plan
Name Since Tenure Amit Sharma 7 Jul 17 7.74 Yr. Data below for UTI Liquid Cash Plan as on 31 Mar 25
Asset Allocation
Asset Class Value Cash 99.79% Other 0.21% Debt Sector Allocation
Sector Value Cash Equivalent 78.06% Corporate 21.73% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 91 Days Treasury Bill 26-Jun-2025
Sovereign Bonds | -5% ₹1,434 Cr 14,500,000,000
↓ -1,000,000,000 91 DTB 30052025
Sovereign Bonds | -3% ₹1,043 Cr 10,500,000,000
↑ 10,500,000,000 National Bk For Agriculture & Rural Dev. **
Commercial Paper | -3% ₹1,041 Cr 10,500,000,000 91 Days Tbill Red 19-06-2025
Sovereign Bonds | -3% ₹990 Cr 10,000,000,000 National Bank for Agriculture and Rural Development
Commercial Paper | -3% ₹984 Cr 10,000,000,000
↑ 10,000,000,000 HDFC Bank Ltd. ** #
Certificate of Deposit | -3% ₹891 Cr 9,000,000,000 Reliance Retail Ventures Limited
Commercial Paper | -2% ₹642 Cr 6,500,000,000
↑ 6,500,000,000 364 DTB
Sovereign Bonds | -2% ₹619 Cr 6,250,000,000 91 Days Tbill Red 08-05-2025
Sovereign Bonds | -2% ₹548 Cr 5,500,000,000
↑ 5,500,000,000 Export-Import Bank Of India
Commercial Paper | -2% ₹511 Cr 5,150,000,000
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!
By Rohini Hiremath
Rohini Hiremath works as a Content Head at Fincash.com. Her passion is to deliver financial knowledge to the masses in simple language. She has a strong background in start-ups and diverse content. Rohini is also an SEO expert, coach and motivating team head!
You can connect with her at rohini.hiremath@fincash.com
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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