Best Short Term Liquid Funds

Best Short Term Liquid Funds In India: Top 5 Liquid Funds Returns And Their Types
Best Short Term Liquid Funds In India: Top 5 Liquid Funds Returns And Their Types

Short Fund Liquid funds are a kind of debt fund that predominantly invests in short-term market instruments, with a maximum duration of 91 Days. These short-term fixed-Income generating assets can be Treasury bills, commercial paper or short-term Bonds, etc.

Why One Should Invest In Liquid Funds?

Here arises a very simple question “Why would one Invest in Liquid funds?” if he can Invest in Stocks, Mutual Funds, or in a Fixed deposit in Bank.

Advantages Of Short Term Liquid Funds

Low risk: These Funds are considered the safest class of Debt funds. value of these short-term funds doesn’t change drastically like Equities, not even as Mutual Funds.

Higher returns: Since these are the safest class of the debt funds, they can’t give you returns like Equity and Mutual Funds, but they outperform in the comparison with Bank FDs, where FD generates a 4.5%-5% return annually. Short-term liquid funds can give you as high as 7%-8%.

Flexibility: Bank FDs provide return only if we hold for the maturity period which can be from 30 days to 3 years(or more), whereas In Equities or Mutual Funds the person don’t get the guarantee of the gains.

Here again, comes the Role of Short Term Liquid Funds where you get both guarantees of returns as well as the flexibility of redeeming your money anytime.

Faster Processing: Some of the top Liquid funds offer processing within a day or even less. This means you can sell your funds today and have the money tomorrow.

Best Short Term Liquid Funds To Invest In 2021

1. Quant Liquid fund

This fund is a Debt mutual fund scheme. This scheme was launched on 01 Jan 2013. Currently, it is managed by its fund manager Mr.Sanjeev Sharma. Quant Liquid Direct Plan has generated a return of 4.87% in the last 1 year, in last 3 years is 20.63% and 47.33% since scheme launch. The minimum SIP amount to invest in this scheme is ₹1000.

Scheme Details

AUM ₹147.87 Cr
Category Debt Liquid
Launch Date 01 Jan 2013
Fund Type Open-End

 

2. IDBI liquid fund

It is also a debt mutual fund scheme from IDBI Mutual Fund. This scheme was launched around 8 years ago on 01 Jan 2013. Currently, it is managed by its fund manager Mr. Rahul Sharma.

IDBI Liquid Fund has performed in the describes manner in the last 1 year 3.61%, in last 3 years is 18.49% and 80.15% since scheme launch. The minimum SIP amount to invest in this scheme is ₹1000.

Scheme Details

AUM ₹1,208.64 Cr
Category Debt Liquid
Launch Date 01 Jan 2013
Fund Type Open-End

 

3. Franklin India liquid fund

Franklin India Liquid Fund is a debt mutual fund scheme by Franklin Templeton Mutual Fund. This scheme was launched also launched 8 years ago on 01 Jan 2013. Currently, it is managed by its fund manager Mr. Pallab Roy and Mr.Umesh Sharma.

Franklin India Liquid scheme generated a 3.38% return in last 1 year for investors, in last 3 years is 18.48% and 81.43% since scheme launch. The minimum SIP amount to invest in this scheme is ₹500.

Scheme Details

AUM ₹1,979.45 Cr
Category Debt Liquid
Launch Date 01 Jan 2013
Fund Type Open-End

 

4. Edelweiss liquid fund

This fund is a debt mutual fund scheme by Edelweiss Mutual funds. This scheme was launched on 01 Jan 2013. Currently, it is managed by its fund manager Mr. Rahul Dedhia and Mr.Gautam Kaul.

Edelweiss Liquid Direct-Growth scheme return performance in last 1 year is 3.49%, in last 3 years is 18.33% and 78.83% since scheme launch. The minimum SIP amount to invest in this scheme is ₹500.

Scheme Details

AUM ₹1,137.60 Cr
Category Debt Liquid
Launch Date 01 Jan 2013
Fund Type Open-End

 

5. Mahindra liquid fund

Mahindra Manulife Liquid Fund is also a debt mutual fund scheme provided by Mahindra Manulife Mutual Fund. This is one of the oldest Liquid fund schemes, launched approx 15 years ago in Jul 2016.

Currently, it is managed by its fund manager Mr. Rahul pal and Mr. Amit Garg. This fund has performed in the described manner, return performance in last 1 year is 3.54%, in last 3 years is 18.37% and 34.18% since scheme launch. The minimum SIP amount to invest in this scheme is ₹1000.

Scheme Details

AUM ₹1,638.97 Cr
Category Debt Liquid
Launch Date 04 Jul 2016
Fund Type Open-End

 

Also Read: List Of Top Asset Management Companies In India

Taxability: Tax on liquid funds is calculated according to tax slabs. Short-term capital gains (STCG) is applicable if the investor sells the funds within 36 months or less. Which will be further calculated according to your tax slab.

Whereas if an Investor sold funds after 36 months or 3 years he has to pay long-term capital gains(LTCG) which is mostly around 20%.

Who Should Invest In Short-Term Liquid Funds?

Investors who want to generate a decent return on their deposited money with the lowest risk can think about investing in such funds. As mentioned earlier these are the lowest risk mutual funds in the financial market with the flexibility to redeem money anytime within 24 hours.

One should always be careful while investing because these short-term liquid funds are considered almost risk-free but as a said precaution is better than cure.

One should read and understand all the requirements of the scheme and their return before investing, Also try to investigate in what kind of companies your money is being invested.

You can also informate yourself about the Fund managers and their working history on Linkedin and various other Social Media platforms.

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He is pursuing BBA, a Passionate trader and his hobby is to write content on business and finance.

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