Best liquid investments india

Find this comment offensive? Liquidity: U. Corporate bonds are bonds issued by major corporations to fund their investments. Page Industries. In this respect, they may be even better than traditional savings and money market accounts, which limit monthly withdrawals. Planning to invest in stocks? Both fixed-income and market-linked investments have a role to plan in the process of wealth creation.

What to consider

Updated on Dec 10, — PM. Liquid funds are debt funds that inveztments in short-term fixed-interest generating money market instruments. These can be treasury bills, commercial paper, and so on, which mature within 91 days. Liquid funds aim at providing a high degree of liquidity and safety of the capital to investors. For this reason, the fund manager invests in high-credit quality debt instruments. The fund manager will ensure that the average maturity of the portfolio is three months. This reduces the sensitivity of fund returns to interest rate changes.

While selecting an investment avenue, you have to match your own risk profile with the risks associated with the product before investing.

Tax Saving Plan. Young India Plan. Updated on Nov 27, — PM. Liquid funds invest in short-term high-credit quality fixed income earning money market instruments. Liquid funds invest in instruments such as certificates of deposit, treasury bills, commercial papers, and so on. This article covers the following:.

What is a short-term investment?

Tax Saving Plan. Young India Plan. Updated on Nov 27, — PM. Liquid funds invest in short-term high-credit quality fixed income earning money market instruments. Invesstments funds invest in instruments such as certificates of deposit, treasury bills, commercial papers, inveetments so on. This article covers the following:. Liquid funds are a type of debt funds that invest in financial instruments such as bank fixed deposits, treasury beet, commercial papers, and other debt securities with maturities up to vest days.

Liquid funds have no restrictions of a lock-in period. The withdrawal of liquid funds is processed within 24 hours on business days. So, for all transactions received within cut-off time say 2 p. Liquid funds have the lowest interest risk associated with all the classes of debt funds. This is because they primarily invest in fixed income securities with a short maturity.

Another notable benefit of liquid funds is that they do not have any entry or exit load. Since these funds provide liquidity and not high returns, it is investmsnts for investors searching for options to park their idle money to consider liquid funds as a viable option.

However, investors should not invest their entire emergency corpus in liquid funds as the redemption of the funds will credit the money only on the next working day. Ideally, liquid funds are suitable for achieving short-term financial goals.

Liquid funds are least liqukd among all the debt funds. This prevents the NAV of liquid funds from getting impacted by the underlying asset price fluctuations. However, there might be a chance of a sudden drop in NAV. This can happen due to a sudden decline in the credit rating of the underlying security. In simple bfst, liquid funds are not entirely risk-free. Even though the returns on unvestments funds are not guaranteed, in most cases, they have delivered positive returns on redemption.

Considering the hold till maturity strategy of the fund manager, liquid funds maintain a lower expense ratio to offer comparatively higher returns over a short period. Liquid funds are exclusively for investing the surplus cash over a short duration, say up to investmenhs months. Such a short horizon helps to realise the full potential of the underlying securities.

Best liquid investments india case you have a liuqid investment horizon of up to one year, then you may consider investing in ultra-short-term funds to get relatively higher returns.

If you want to create an emergency fund, then liquid funds can prove to be very useful. Also, you receive higher returns, and this will help you to take out your money quickly in case of emergencies. Fund performance plays a significant role in besr selection of relevant funds. You may seek funds that have delivered consistent returns over different time horizons. Choose the funds that have outperformed their benchmark and peer funds consistently. However, you must analyse the fund performance, which matches your investment horizon to get relevant results.

Track record of the fund house is an essential criterion while selecting a bst. Fund houses that have a strong history of consistent performance in the investment domain may be trusted to stay resilient during slumps and market rally. A fund house which has a consistent track record for at least 5 to 10 years is the one you can choose. Expense ratio besh the operating efficiency of a mutual fund scheme. It shows how much of your investment is used to manage the expenses of the fund.

A lower expense ratio interprets into a higher take-home return for the investor. Choose a fund with a lower expense ratio, which can give you better performance.

In addition to using plain vanilla returns, there is a range of financial ratios available, which can be used to analyse the performance of the fund from different perspectives. You may use tools such as standard deviation, Sharpe, alpha, and beta ratios to examine the risk-adjusted returns and relative riskiness of a fund. A fund having higher standard deviation and beta is riskier than a fund with lower beta and standard deviation.

Look for funds having a higher Sharpe ratio, which means it gives higher returns on every additional unit of risk taken. When selecting a fund, you need to analyse the fund holistically. Various quantitative and qualitative parameters can be used to arrive at the best liquid funds as per your requirements. Additionally, you need to consider your financial goals, risk appetite, and investment horizon in mind.

The following table shows the top 10 liquid funds in India based on the returns in the last three years. Investors may choose the funds based on different ihvestments horizons like three years or ten years returns.

You may consider other criteria such as financial ratios kiquid. Invest Now. Kotak Money Market Scheme. Nippon India Liquid Fund. Axis Fund Growth. UTI Liquid Cash. Investors may choose the funds as per loquid goals. Returns are subject to change.

Sometimes, investing in liquid funds might be jittery. You can invest in hand-picked funds in a hassle-free and paperless manner. Get App Products IT. About us Help Center. Log In Sign Up. How to become a crorepati in 15 years? This article covers the following: What are Liquid Funds? Who should invest in Liquid Funds? Things to consider as an investor How to evaluate Liquid funds? Top 10 Liquid Funds in India. Tax Saving Investment Besy Simple.

Start Tax Saving. Best Tax Saving Funds — Axis Long Term Equity Fund. Returns Ivnestments Tax Saver. Download ClearTax Invest App.

Here are the best investments in 2019:

Currently, the interest rate that can be earned on SCSS is 8. Read more about PPF. Read more about company deposits. Share this Comment: Post to Twitter. Read more about Sweep-in FDs. In the case of premature closure within a month, no interest is paid to the depositor and only the best liquid investments india amount is returned. Currently, the 1- 3- 5 year market returns are around 13 percent, 8 percent and Read more on demat account. Index funds and exchange-traded fund ETFs are passively managed, and these track the underlying index. They can be bought and sold on any day that the stock market is open. In reality, risk and returns are inversely related, i. Returns : The interest rate is mostly similar to that of bank FDs.