ESOPs or Employee Stock Ownership Plan is a very common phenomenon in the west, however, in India, it has recently gained popularity.

You could be one such person who has an ESOP and you obviously know what the benefis are. Now, let’s assume you have the liquid money from ESOPs.

What next? What will you do with it?

We’re sure many of you would opt to invest it in a fixed deposit or savings bank account.

Now, why would you want to invest an ESOP in these mediums, when you can get much higher returns through another medium.

Where should you invest your ESOP?

Mutual fund is the answer.

Think about it, if you attain a large chunk of money, wouldn’t it make more sense to invest in an instrument that can give you  stable returns, which is more than an FD or savings bank account?

Yes, we all do.

Below we have lined up a few mutual funds, that you can consider investing in, if you have attained liquid cash from ESOPs.

Mutual funds you should consider investing in with ESOP money

Ideally, when you need to park your money for a short-term, liquid funds are the best option. Here are the three best funds that we have lined up for you.

Kotak Low Duration Fund – Direct – Growth

This is a 5-star rated fund by Groww, which primarily invests in medium term debt and money market securities.

Launch Date 1 January 2013
NAV (11 Oct 2018) ₹2278.4
Plan Type Direct
Rating by Groww 5 Star
AUM (Fund Size) ₹5,001 Cr
Riskometer Moderately
Minimum SIP ₹1000
Minimum SWP Not Supported
Performance w.r.t its Benchmark Has consistently outperformed its benchmarkNIFTY Low Duration Debt TRI since its launch.
Age of the fund 10 years old
Expense Ratio 0.28%
Exit Load NIL
Type  Open Ended

Returns per annum

kotak low duration fund
Fund Name 1Y 3Y 5Y Category Risk
Kotak Low Duration Fund - Direct - Growth 7.25% 8.54% NA Debt Moderate

ICICI Prudential Liquid Fund – Direct – Growth

This is the best liquid fund and invests in debt and money market securities with maturity of up to 91 days only.

Key information

Launch Date 1 January 2013
NAV (11 Oct 2018) ₹267
Plan Type Direct
Rating by Groww 5 Star
AUM (Fund Size) ₹47,395 Cr
Riskometer Moderately Low
Minimum SIP ₹500
Minimum SWP Not Supported
Performance w.r.t its Benchmark Has consistently outperformed its benchmark CRISIL Liquid since its launch.
Age of the fund 5 years old
Expense Ratio 0.15%
Exit Load NIL
Type  Open Ended

Returns per annum

ICICI Prudential Liquid Fund – Direct – Growth
Fund Name 1Y 3Y 5Y Category Risk
ICICI Prudential Liquid Fund - Direct - Growth 7.29% 7.28% 7.93% Debt Low

Franklin India Ultra Short Bond Fund — Direct — Growth

This fund invests in debt & money market instruments, such that the duration of the portfolio is between 3 – 6 months.

Key information

Launch Date 1 January 2013
NAV (11 Oct 2018) ₹25.1
Plan Type Direct
Rating by Groww 5 Star
AUM (Fund Size) ₹13,240 Cr
Riskometer Low
Minimum SIP ₹1,000
Minimum SWP ₹1,000
Performance w.r.t its Benchmark Has consistently outperformed its benchmark CRISIL Liquid since its launch.
Age of the fund 5 years old
Expense Ratio 0.34%
Exit Load NIL
Type  Open Ended

Returns per annum

Franklin India Ultra Short Bond Fund – Direct – Growth
Fund Name 1Y 3Y 5Y Category Risk
Franklin India Ultra Short Bond Fund - Direct - Growth 7.85% 8.8% 9.3% Debt Moderate

Conclusion

Now that you have a fair idea about what to do when with your ESOP, it’s high time you move over FDs and savings bank account. If you want to invest for a long term, you can look at SWP and STP as a possible option.

Think wisely. Invest wisely. Groww.

Happy Investing!

Disclaimer: The views expressed in this post are that of the author and not those of Groww