Liquid Funds

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What is Liquid Funds?

Liquid fund is a classification of mutual fund which puts principally in money market instruments like commercial papers, certificate of deposits, term deposits and treasury bills.

Liquid funds have a lower maturity period normally under 91 days, there is no lock in period under this liquid funds.

Different types of liquid funds

  • Weekly dividend Liquid Fund
  • Monthly dividend Liquid Fund
  • Growth Liquid Fund (under this fund there is no dividend in growth option but the fund unit will be higher)

Highlights & Features of of Liquid Funds

  • There is no Lock in period to stay as investor wish to continue or get exit.
  • Within 1 working day Funds can be redeemed
  • You can offer them before 2 pm and get the funds around the same time. On the off chance that you offer them after 2 pm, you would get funds in your record by following day morning.
  • There is no entry or exit loads
  • Low risk at short term fixed income debt funds.
  • Compare with FD in Liquid Fund given returns between 4% to 8% for every year.
  • Liquid funds accompany different plans like development design, profit designs, Funds can pick great liquid mutual funds in view of Crisil Rank, Value Research Star Rating, high Assets under Management (AUM) and past year’s records of fund performance.

Top 10 Best Liquid Mutual Funds in India in 2018

Average of 3 years returns 8.5% the below Listed Liquid Funds in India
  • Birla Sunlife Cash Plus – G
  • ICICI Prudential Liquid Fund – G
  • HDFC Liquid Fund – G
  • Reliance Liquidity Fund – G
  • Axis Liquid Fund – G
  • Sundaram Money Fund- Regular Plan (G)
  • Kotak Liquid Plan A (G)
  • Kotak Floater Short Term Regular Plan (G)
  • UTI MMMF (G)
  • Reliance Money Manager Fund – Regular Plan (G)

Liquid Funds Vs Fixed Deposits (FD) which one is better to investors?

In the event that you need to contribute for here and now period, by and large we put resources into liquid funds or fixed deposits. Do you realize that liquid mutual funds score high contrasting with bank fixed deposits and would procure you higher returns on the off chance that you can design and contribute astutely. I planned to purchase a property over the most recent a half year. I needed to stop my cash for 3 to a half year length for this unique objective. I didn’t know when I would require cash. I stopped cash in liquid funds and as of late when I recovered, I got higher returns contrasted with fixed deposits.

What is the Taxation on Liquid Funds in India?

Liquid funds are dealt with like other debt funds for taxation reason. In the event that you hold the fund for under 3 years, at that point it is considered as Short Term Capital Gain (STCG). Be that as it may, on the off chance that you are holding for over 3 years, at that point it is considered as Long Term Capital Gain (LTCG).

Short Term Capital Gain Tax for Debt Funds as per your tax slab.

Long Term Capital Gain Tax For Debt Funds Taxed at 20% with indexation advantage.

Liquid Funds Vs Fixed Deposits which one is better based on returns?


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