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- Liquid Funds
- Average Return 5.67%
- No of Funds 32
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What is Liquid Mutual Fund
Liquid funds are debt funds that lend to companies for a period of up to 91 days. These are the safest funds amongst all the mutual fund categories, owing to their extremely low lending duration.
Advantages of Liquid Funds
- Suitable for putting money aside for emergencies
- Near zero risk of loss if someone invests for at least one month
- Have given up to 50% to even at times 100% higher returns than the savings bank account
Top schemes of Liquid Mutual Funds sorted by ETM Rank
32 funds
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- ETM Rank High to Low
- Returns High to Low
- Fund Size High to Low
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Returns for
- 1 Month
- 3 Months
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via
- Monthly SIP
- One-time (Lumpsum)
Mahindra Manulife Liquid Fund
#1 of 34
Fund Size
₹1,062 Crs
Return (p.a)
+ 7.29%+ 0.6% + 7.7%+ 1.25% + 7.7%+ 2.2% + 7.52%+ 4.05% + 6.64%+ 10.61% + 5.76%+ 15.71%
ETM Rank
#1 of 34
Invest
PGIM India Liquid Fund
#2 of 34
Fund Size
₹438 Crs
Return (p.a)
+ 7.29%+ 0.56% + 7.78%+ 1.23% + 7.7%+ 2.16% + 7.5%+ 4.0% + 6.61%+ 10.53% + 5.73%+ 15.57%
ETM Rank
#2 of 34
Invest
Aditya Birla Sun Life Liquid Fund
#3 of 34
Fund Size
₹42,962 Crs
Return (p.a)
+ 7.3%+ 0.56% + 7.81%+ 1.23% + 7.76%+ 2.18% + 7.53%+ 4.01% + 6.65%+ 10.58% + 5.76%+ 15.65%
ETM Rank
#3 of 34
Invest
Canara Robeco Liquid Fund
#4 of 34
Fund Size
₹3,624 Crs
Return (p.a)
+ 7.21%+ 0.59% + 7.72%+ 1.26% + 7.7%+ 2.2% + 7.49%+ 4.03% + 6.59%+ 10.53% + 5.63%+ 15.33%
ETM Rank
#4 of 34
Invest
JM Liquid Fund
#5 of 34
Fund Size
₹2,107 Crs
Return (p.a)
+ 7.23%+ 0.56% + 7.57%+ 1.19% + 7.56%+ 2.12% + 7.41%+ 3.95% + 6.55%+ 10.43% + 5.66%+ 15.37%
ETM Rank
#5 of 34
Invest
Axis Liquid Fund
#6 of 34
Fund Size
₹32,648 Crs
Return (p.a)
+ 7.27%+ 0.6% + 7.76%+ 1.26% + 7.73%+ 2.21% + 7.51%+ 4.04% + 6.62%+ 10.58% + 5.72%+ 15.6%
ETM Rank
#6 of 34
Invest
DSP Liquidity Fund
#7 of 34
Fund Size
₹10,025 Crs
Return (p.a)
+ 7.25%+ 0.56% + 7.72%+ 1.22% + 7.7%+ 2.16% + 7.49%+ 3.99% + 6.58%+ 10.47% + 5.68%+ 15.44%
ETM Rank
#7 of 34
Invest
Bank of India Liquid Fund
#8 of 34
Fund Size
₹1,318 Crs
Return (p.a)
+ 7.28%+ 0.6% + 7.7%+ 1.25% + 7.71%+ 2.2% + 7.51%+ 4.04% + 6.62%+ 10.58% + 5.71%+ 15.56%
ETM Rank
#8 of 34
Invest
Sundaram Liquid Fund
#9 of 34
Fund Size
₹5,149 Crs
Return (p.a)
+ 7.3%+ 0.56% + 7.79%+ 1.23% + 7.74%+ 2.17% + 7.5%+ 4.0% + 6.6%+ 10.51% + 5.71%+ 15.53%
ETM Rank
#9 of 34
Invest
Edelweiss Liquid Fund
#10 of 34
Fund Size
₹4,528 Crs
Return (p.a)
+ 7.43%+ 0.57% + 7.89%+ 1.24% + 7.84%+ 2.2% + 7.58%+ 4.04% + 6.63%+ 10.56% + 5.76%+ 15.65%
ETM Rank
#10 of 34
Invest
LIC MF Liquid Fund
#11 of 34
Fund Size
₹11,188 Crs
Return (p.a)
+ 7.25%+ 0.56% + 7.77%+ 1.22% + 7.73%+ 2.17% + 7.5%+ 4.0% + 6.58%+ 10.47% + 5.71%+ 15.51%
ETM Rank
#11 of 34
Invest
Franklin India Liquid Fund
#12 of 34
Fund Size
₹2,015 Crs
Return (p.a)
+ 7.22%+ 0.56% + 7.69%+ 1.21% + 7.68%+ 2.16% + 7.47%+ 3.98% + 6.56%+ 10.44% + 5.69%+ 15.47%
ETM Rank
#12 of 34
Invest
Quant Liquid Fund
#13 of 34
Fund Size
₹2,396 Crs
Return (p.a)
+ 7.06%+ 0.54% + 7.38%+ 1.16% + 7.42%+ 2.08% + 7.29%+ 3.88% + 6.51%+ 10.36% + 5.93%+ 16.14%
ETM Rank
#13 of 34
Invest
Baroda BNP Paribas Liquid Fund
#14 of 34
Fund Size
₹7,894 Crs
Return (p.a)
+ 7.19%+ 0.57% + 7.67%+ 1.23% + 7.66%+ 2.17% + 7.47%+ 4.0% + 6.61%+ 10.54% + 5.73%+ 15.58%
ETM Rank
#14 of 34
Invest
Quantum Liquid Fund
#15 of 34
Fund Size
₹607 Crs
Return (p.a)
+ 7.13%+ 0.59% + 7.37%+ 1.2% + 7.34%+ 2.1% + 7.19%+ 3.87% + 6.33%+ 10.11% + 5.43%+ 14.75%
ETM Rank
#15 of 34
Invest
ICICI Prudential Liquid Fund
#17 of 34
Fund Size
₹43,473 Crs
Return (p.a)
+ 7.27%+ 0.56% + 7.78%+ 1.23% + 7.74%+ 2.17% + 7.5%+ 4.0% + 6.57%+ 10.46% + 5.69%+ 15.46%
ETM Rank
#17 of 34
Invest
SBI Liquid Fund
#18 of 34
Fund Size
₹71,061 Crs
Return (p.a)
+ 7.2%+ 0.55% + 7.69%+ 1.21% + 7.67%+ 2.16% + 7.46%+ 3.98% + 6.56%+ 10.44% + 5.67%+ 15.41%
ETM Rank
#18 of 34
Invest
Union Liquid Fund
#19 of 34
Fund Size
₹2,479 Crs
Return (p.a)
+ 7.26%+ 0.6% + 7.68%+ 1.25% + 7.69%+ 2.2% + 7.5%+ 4.04% + 6.62%+ 10.58% + 5.73%+ 15.63%
ETM Rank
#19 of 34
Invest
Tata Liquid Fund
#20 of 34
Fund Size
₹17,257 Crs
Return (p.a)
+ 7.25%+ 0.56% + 7.71%+ 1.22% + 7.69%+ 2.16% + 7.49%+ 3.99% + 6.58%+ 10.47% + 5.7%+ 15.48%
ETM Rank
#20 of 34
Invest
Invesco India Liquid Fund
#21 of 34
Fund Size
₹10,053 Crs
Return (p.a)
+ 7.23%+ 0.56% + 7.69%+ 1.21% + 7.68%+ 2.16% + 7.47%+ 3.98% + 6.56%+ 10.45% + 5.66%+ 15.38%
ETM Rank
#21 of 34
Invest
UTI Liquid Fund
#23 of 34
Fund Size
₹23,330 Crs
Return (p.a)
+ 7.26%+ 0.58% + 7.71%+ 1.24% + 7.68%+ 2.18% + 7.48%+ 4.0% + 6.6%+ 10.53% + 5.71%+ 15.54%
ETM Rank
#23 of 34
Invest
Nippon India Liquid Fund
#24 of 34
Fund Size
₹32,096 Crs
Return (p.a)
+ 7.26%+ 0.56% + 7.75%+ 1.22% + 7.74%+ 2.17% + 7.51%+ 4.0% + 6.6%+ 10.51% + 5.72%+ 15.54%
ETM Rank
#24 of 34
Invest
Bandhan Liquid Fund
#25 of 34
Fund Size
₹13,494 Crs
Return (p.a)
+ 7.22%+ 0.55% + 7.71%+ 1.22% + 7.7%+ 2.16% + 7.49%+ 3.99% + 6.59%+ 10.49% + 5.67%+ 15.4%
ETM Rank
#25 of 34
Invest
Navi Liquid Fund
#26 of 34
Fund Size
₹92 Crs
Return (p.a)
+ 6.84%+ 0.53% + 7.1%+ 1.12% + 7.04%+ 1.97% + 6.95%+ 3.7% + 6.35%+ 10.1% + 5.52%+ 14.97%
ETM Rank
#26 of 34
Invest
Mirae Asset Liquid Fund
#27 of 34
Fund Size
₹9,884 Crs
Return (p.a)
+ 7.28%+ 0.56% + 7.74%+ 1.22% + 7.71%+ 2.16% + 7.5%+ 4.0% + 6.61%+ 10.51% + 5.72%+ 15.54%
ETM Rank
#27 of 34
Invest
HDFC Liquid Fund
#28 of 34
Fund Size
₹59,799 Crs
Return (p.a)
+ 7.17%+ 0.55% + 7.69%+ 1.21% + 7.67%+ 2.15% + 7.45%+ 3.97% + 6.55%+ 10.43% + 5.66%+ 15.36%
ETM Rank
#28 of 34
Invest
HSBC Liquid Fund
#29 of 34
Fund Size
₹18,738 Crs
Return (p.a)
+ 7.2%+ 0.55% + 7.73%+ 1.22% + 7.7%+ 2.16% + 7.5%+ 4.0% + 6.61%+ 10.52% + 5.7%+ 15.49%
ETM Rank
#29 of 34
Invest
Parag Parikh Liquid Fund
#31 of 34
Fund Size
₹2,118 Crs
Return (p.a)
+ 7.1%+ 0.56% + 7.22%+ 1.16% + 7.2%+ 2.04% + 7.05%+ 3.78% + 6.21%+ 9.88% + 5.35%+ 14.49%
ETM Rank
#31 of 34
Invest
Kotak Liquid Fund
#32 of 34
Fund Size
₹33,006 Crs
Return (p.a)
+ 7.19%+ 0.55% + 7.71%+ 1.22% + 7.69%+ 2.15% + 7.47%+ 3.98% + 6.57%+ 10.45% + 5.67%+ 15.4%
ETM Rank
#32 of 34
Invest
Motilal Oswal Liquid Fund
#33 of 34
Fund Size
₹561 Crs
Return (p.a)
+ 6.97%+ 0.54% + 7.24%+ 1.14% + 7.29%+ 2.04% + 7.12%+ 3.79% + 6.21%+ 9.86% + 5.31%+ 14.35%
ETM Rank
#33 of 34
Invest
WhiteOak Capital Liquid Fund
#34 of 34
Fund Size
₹253 Crs
Return (p.a)
+ 7.26%+ 0.6% + 7.64%+ 1.24% + 7.62%+ 2.17% + 7.39%+ 3.97% + 6.4%+ 10.22% + 5.44%+ 14.78%
ETM Rank
#34 of 34
Invest
TRUSTMF Liquid Fund
Unranked
Fund Size
₹229 Crs
Return (p.a)
+ 7.25%+ 0.56% + 7.52%+ 1.19% + 7.54%+ 2.11% + 7.4%+ 3.94% + 6.55%+ 10.42% N.A.N.A.
ETM Rank
Unranked
Invest
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Liquid Funds Returns Calculator
See what your investment would have yielded in
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Mahindra Manulife Liquid Fund
- Mahindra Manulife Liquid Fund
- PGIM India Liquid Fund
- Aditya Birla Sun Life Liquid Fund
- Canara Robeco Liquid Fund
- JM Liquid Fund
- Axis Liquid Fund
- DSP Liquidity Fund
- Bank of India Liquid Fund
- Sundaram Liquid Fund
- Edelweiss Liquid Fund
- LIC MF Liquid Fund
- Franklin India Liquid Fund
- Quant Liquid Fund
- Baroda BNP Paribas Liquid Fund
- Quantum Liquid Fund
- ICICI Prudential Liquid Fund
- SBI Liquid Fund
- Union Liquid Fund
- Tata Liquid Fund
- Invesco India Liquid Fund
- UTI Liquid Fund
- Nippon India Liquid Fund
- Bandhan Liquid Fund
- Navi Liquid Fund
- Mirae Asset Liquid Fund
- HDFC Liquid Fund
- HSBC Liquid Fund
- Parag Parikh Liquid Fund
- Kotak Liquid Fund
- Motilal Oswal Liquid Fund
- WhiteOak Capital Liquid Fund
- TRUSTMF Liquid Fund
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Minimum: ₹1,000
for a period of for
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Invested Gains
You would have got
Total investment Invested ₹ 6 Lakh
Profit ₹ 3.33 Lakh
Current value Current value ₹ 9.33 Lakh
This fund has generated an XIRR of 5.76% over the past 5 Years
See scheme details Invest now
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- How do Liquid Mutual Funds Work?
- Who Should Invest in Liquid Funds?
- Taxation on Liquid Funds
- How to invest in Liquid Funds?
- Frequently Asked Questions
How do Liquid Mutual Funds Work?
To understand how liquid funds work, you need to know where they invest and how they generate returns.
- Where do Liquid Funds Invest: A liquid fund will typically hold securities that are short term, of good credit quality, and highly liquid. A recent set of guidelines issued by SEBI has helped to reinforce these fund features.Liquid funds can invest only in listed commercial paper, and they have an overall exposure limit of 25% in a sector. They are not permitted to invest in risky assets as defined by SEBI norms. These norms aim to contain credit risk that is the risk of default by the company whose papers the liquid fund is holding.Further, liquid funds must hold at least 20% of their assets in liquid products (cash and cash equivalents such as money market securities). This ensures that they can quickly meet any redemption demands.
- Sources of Earnings: Liquid funds earn mainly through interest payments on their debt holdings; a very small part of their income is generated via capital gains. This is a defining feature of liquid funds, so let us understand it in some detail.When interest rates fall, bond prices go up. When interest rates rise, bond prices fall. The negative relation between bond prices and interest rates is stronger for long term bonds. This means that the longer the maturity of a bond, the more it responds to changes in market yields.Since a liquid fund invests only in short term securities, its market value does not respond much when interest rates change in the market. This means that liquid funds do not have significant capital gains or losses. In a rising interest rate environment, liquid funds often outperform other debt funds because (i) their interest earnings are going up (ii) their market values suffer only to a limited extent due to capital losses. In market jargon, we say that liquid funds have a very low-interest rate risk.
Who Should Invest in Liquid Funds?
- Investors with a short investment horizon: Liquid funds are best suited for those with an investment horizon of up to 3 months, as the funds invest in securities with comparable maturities. Investors with longer investment horizons, say 6 months to a year, should invest in slightly longer duration funds (say ultra short duration funds) so that they can earn higher returns.
- Investors who invest in bank deposits: Investors who keep their surplus funds in bank deposits can benefit from liquid funds on two fronts: greater withdrawal flexibility and better returns. In a traditional bank fixed deposit, funds are locked in for a fixed period; and an interest penalty is imposed on premature withdrawal. In contrast, liquid funds offer flexible holding periods with easy exit options. Money in bank savings accounts can be withdrawn at any time, but they offer around 3% to 4% interest only, which is lower than the 5% plus usually earned by a liquid fund.
- Investors who want to keep Contingency Funds: The purpose of liquid funds is to provide liquidity and safety while generating better than fixed deposit returns. Hence investors can park an emergency or contingency corpus in a liquid fund with the assurance that it will be safe and can be redeemed when necessary.
- Investors who need to Park Funds Temporarily: Liquid funds are cash management products that are designed to keep funds safe while earning a small return. Hence, a large sum of money, say, from a bonus or sale of property or inheritance, can be temporarily parked in a liquid fund until the investor decides how to invest the corpus.
- Medium to Route investments in Equity Funds: Investors can hold funds in a liquid fund and use an STP to route investments systematically into an equity fund. This enables them to invest in equity periodically, while at the same time, the corpus in the liquid fund earns stable returns.
Taxation on Liquid Funds
Investors earn dividends and capital gains from liquid funds. Dividends are taxable in the hands of investors from the financial year 2020-21, while earlier, they were tax-free in the hands of investors. If an investor earns a capital gain by redeeming the units of the fund at a price higher than his or her purchase price- then the capital gains are taxable.
- Short-term Capital Gains: If an investor sells or redeems the units of a liquid fund after a holding period of up to 3 years, he or she is deemed to have earned short term capital gains. This is taxed at the income tax slab rate applicable to the investor.
- Long-term Capital Gains Tax: If a liquid fund is redeemed/sold after being held for more than 3 years, the capital gain is treated as a long-term capital gain, and the investor gets the benefit of indexation. This means that the purchase price is increased to adjust for inflation (using an index provided by the Government) before calculating the capital gain. Long term capital gains are currently taxed at a rate of 20% after indexation.
How to invest in Liquid Funds?
It is quite easy to invest in Liquid mutual funds on ET Money. Here are the steps that you have to follow.
- Register online on ET Money app or website
- Head to Mutual Funds sections and choose the Liquid fund you want to invest in.
- Click on invest and choose the amount and mode of investment (SIP or Lumpsum)
- Provide your KYC details (Pan number, Bank details) and complete your investment.
Frequently Asked Questions
Which are the best Liquid Mutual Funds to invest in 2024?
These are top 5 Liquid funds you can invest in 2024
Fund Name | Fund Category | ETM Rank | Consistency | 5 Year Return (Annualized) |
---|---|---|---|---|
Quantum Liquid Fund | Debt | # 15 of 34 | 4.94 % p.a. | |
Canara Robeco Liquid Fund | Debt | # 4 of 34 | 5.09 % p.a. | |
Quant Liquid Fund | Debt | # 13 of 34 | 5.76 % p.a. | |
TRUSTMF Liquid Fund | Debt | Unranked | NA | |
PGIM India Liquid Fund | Debt | # 2 of 34 | 5.32 % p.a. |
How long should I stay invested in Liquid Mutual Funds?
Liquid Debt Mutual Funds are ideal for an investment horizon of 7 days to up to a year.
Where do Liquid Mutual Funds invest?
Liquid funds lend for a period of up to 91 days. They mostly lend to borrowers who are financially strong and also to the government.
Are Liquid Mutual Funds high risk?
Liquid Funds are one of the safest funds as their lending duration is extremely short and the quality of borrowers extremely good.
What kind of returns can i earn from Liquid ?
Liquid Funds have on an average delivered 7.27% p.a. returns in the last 1 year. Their 3 and 5 year annualized returns are 5.67% and 5.23%. p.a.
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