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Liquid Funds

Liquid Funds, as the name implies, are investments that can be easily converted to cash. It also denotes benefit that is as good as hard money. This is primarily important for those who want to earn profits by quick selling their assets or want to switch investments at short notices. These Funds are quite similar to debt funds or mutual funds which can be redeemed in very short period of time, as less as a day. Liquid funds allow options for purchasing all investments that can be easily liquidated in the existing market. These funds are employed only in safe, short-term debts making your hard-earned money invulnerable to elevated risks.

Mutual Funds are short-term investments that mature within a year. The period of maturity ranges from a quarter (3 months) to a year offering investors a golden opportunity to reap benefits without having to invest their assets over an elongated time span. Also, in case of requirement, the investors can access their funds, with the company charging no penalty fee.

Liquid funds are normally used as substitute to short-term fixed deposits. The minimum amount that can be invested in liquid funds is as small as 1000/- and require a redemption time of barely 24 hours. As Funds have short maturity periods, they usually invest in money market instruments, treasuries and short-term corporate deposits. A Mutual fund guarantees better Funds and low-interest rate risk because they have the restrictions of possessing shares at maximum 10% of the current market value. Some of the prominent features of these funds are:-

• No entry and exit load
• Very low annual fee
• Variable investment amount depending upon the scheme
• Grand tax benefits
• Easy liquidation which rightfully glorifies the name
• An average return of 8 percent per annul over investments
• Less susceptible to market risk owing to maximum 10% investment shares

Further, if the investor gains his money prior to the lock-in time (minimum time frame within which an investor cannot redeem his assets), the liquid fund charges an exit load. Exit load is the cost payable to the company when an investor withdraws his money. But normally, the lock-in period is considerably small, less than 10 days, making liquid funds a superior investment option.
Liquid funds have a right hand over Short-term deposits. This is because the returns from short-term investments are taxable while those from Liquid funds are non-taxable, rendering funds more eye-catching than short-term investments.

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Equity MF inflows improve slightly in May, SIP flows remain stable MFs received net fresh flows of Rs 76,989 crore in April, mainly driven by stable inflows into liquid funds and modest equity figures.
Mon, 10 Jun 2019 16:46:25 +0530


Budget Snapshots | Mutual funds would be happy if LTCG exemption is restored NULL
Mon, 10 Jun 2019 12:58:15 +0530


ADAG#39;s exit from Reliance Nippon AMC to allay investor fears, may trigger re-rating While a rightful discount to HDFC AMC is justified, RNAM is trading at a significant discount, which we think should now narrow following the change in parentage.
Fri, 24 May 2019 16:33:16 +0530


Equity MF inflows muted, but SIP inflows hit an all-time high in April Market reforms introduced by SEBI such as reduction of total expense ratio and introduction of direct plans have attracted retail investor
Thu, 09 May 2019 16:21:57 +0530


Bumper debut: Neogen Chemicals ends with 23% premium at Rs 264 At closing price, Neogen#39;s market capitalisation stood at 614.98 crore
Wed, 08 May 2019 16:45:39 +0530


Strong listing: Neogen Chemicals debuts with 17% premium at Rs 251 Thanks to the heavy buying, the stock was locked at 5 percent upper circuit
Wed, 08 May 2019 10:06:54 +0530


Neogen Chemicals to list equity shares on May 8 The issue price is fixed at higher end of price band of Rs 212-215 per share.
Tue, 07 May 2019 20:56:37 +0530

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