Best Liquid Mutual Funds

Liquid funds are a category debt mutual funds that primarily invest in financial instruments like treasury bills, commercial papers, fixed deposits and any other form of debt securities. The most defining feature of these funds is that they are short-term investments and come with a maturity period of 91 days.

The process of NAV calculation for liquid funds is also unique. It is calculated for 365 days. In case of other debt funds, the calculation is based only on business days.

Another significant benefit of these funds is that they do not come with any lock-in period. You can withdraw any amount, and the withdrawal is processed within 24 working hours of application. There are also no entry and exit loads applicable to these funds.

More and more investors are choosing the best performing liquid funds to invest in due to several reasons. The primary reason is that they have the lowest risk associated with their interest rates. It is due to the fact that these investments are primarily in fixed income securities, which mostly have high credit ratings, and they have an extremely short maturity period.

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Top 10 Liquid Mutual Funds

Fund NameCategoryRisk1Y ReturnsRatingFund Size(in Cr)
IDBI Liquid FundDebtLow5.2%5star1,820
Franklin India Liquid FundDebtLow5.2%5star2,118
Quant Liquid FundDebtLow5.8%5star166
PGIM India Insta Cash FundDebtLow5.0%4star815
ICICI Prudential Liquid FundDebtLow5.0%4star54,052
Nippon India Liquid FundDebtLow5.0%4star26,900
LIC MF Liquid FundDebtLow5.0%4star10,140
Aditya Birla Sun Life Liquid FundDebtLow5.0%4star39,810
Mahindra Liquid FundDebtLow5.1%4star2,138
Tata Liquid FundDebtLow5.1%4star18,934
BNP Paribas Liquid FundLiquidLow4.9%4star981
Axis Liquid FundDebtLow5.0%4star28,818
UTI Liquid Cash PlanDebtLow4.9%3star27,459
Baroda Pioneer Liquid FundDebtLow4.9%3star3,457
HSBC Cash FundDebtLow4.8%3star3,905
View All Top 10 Liquid Mutual Funds

Features of Liquid Mutual Fund

The primary purpose of the best performing liquid mutual funds is preserving capital and generating income through ample liquidity. Here are a few features of liquid funds that clarify their purpose further.

  • The return on investment of liquid funds is quite high. The best liquid funds of 2019 offer 7%-9% returns. It is typically higher than the interest accrued on a savings account.
  • The high liquidity offered by these funds is unmatched by any other investment vehicle. Investors can withdraw their money any time they choose to. Most funds process the withdrawal application within a day. Some funds even allow for instant withdrawal, ensuring you can avail the funds as soon as you place the application. However, do note that according to the directive issued by the Securities and Exchange Board of India (SEBI), you can only redeem Rs. 50,000 or 90% of your portfolio value instantly at one go. A number of mutual funds have made this process even simpler by linking the funds with the investor’s debit card.

Taxability

There are essentially two tax slabs that liquid funds are subjected to- for long-term and short-term redemptions, respectively. Should you redeem your funds before 36 months, you will be eligible for short-term capital gains (STCG) tax. This tax regime is calculated by adding the STCG to your income and then taxed according to the applicable income tax slab.

Long-term capital gains (LTCG) tax is applicable when you hold the investment for more than 3 years. The payable tax is 20% with indexation.

If, however, you choose to avail the dividend option, you will be eligible for dividend distribution tax (DDT) of 29.12%.

Who Are These Funds Suited For?

If you want to park some surplus money for a short time and your risk appetite is low, you should consider the est liquid funds to invest in 2019 . These funds bear the least amount of risk across all fund categories and offer returns higher than a savings account. Do note that equity funds generate higher returns, often in multiples of what liquid funds do, but they are also proportionately riskier.

However, investors should refrain from investing their full emergency corpus on liquid funds. Although they are exceptionally liquid, most funds require 24 hours to be disbursed. In case of emergencies, that could pose a huge challenge.

Also, investors should understand that even the best performing mutual funds are not entirely risk-free. NAV value of a liquid fund may fall drastically if the credit rating of its underlying assets takes a nosedive. Although rare, it is not unheard of.

Major Advantages

There are several significant benefits of investing in best liquid funds in India, via SIP. Let’s see some of the advantages below:-

  • High liquidity- Investors can get access to their money in just 24 hours.
  • Least risk- As the maturity period is 91 days, the NAV of liquid funds does not fluctuate all that often.
  • Lower expense ratio- AMCs levy a charge to manage your funds, which is known as its expense ratio. SEBI has mandated the maximum expense ratio at 2.25%, which is lower than most other debt instruments.
  • No ‘loads’- Unlike other mutual funds, there are no entry or exit load attached to these funds.
  • Instant redemption- Some mutual funds allow for instant redemption and even link the funds to the investor’s debit card.

Let's have a closer look

Now let us jump and check about these top 10 mutual fund schemes.

IDBI Liquid Fund Direct Growth

Fund Performance: This fund has given 6.57% annualized returns in the last three years. In the last year, its returns were 5.21%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 5.21% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹5,000
AUM1,820Cr
1Y Returns5.2%

Franklin India Liquid Fund Direct Growth

Fund Performance: This fund has given 6.59% annualized returns in the last three years. In the last year, its returns were 5.17%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 5.17% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹10,000. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹10,000
AUM2,118Cr
1Y Returns5.2%

Quant Liquid Direct Plan Growth

Fund Performance: This fund has given 6.85% annualized returns in the last three years. In the last year, its returns were 5.77%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 5.77% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt₹5,000
AUM166Cr
1Y Returns5.8%

PGIM India Insta Cash Fund Direct Plan Growth

Fund Performance: This fund has given 6.51% annualized returns in the last three years. In the last year, its returns were 5.03%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 5.03% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹100. Minimum SIP investment amount required for this scheme is ₹100.

Min Investment Amt₹100
AUM815Cr
1Y Returns5.0%

ICICI Prudential Liquid Fund Direct Plan Growth

Fund Performance: This fund has given 6.46% annualized returns in the last three years. In the last year, its returns were 5.01%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 5.01% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹100. Minimum SIP investment amount required for this scheme is ₹100.

Min Investment Amt₹100
AUM54,052Cr
1Y Returns5.0%

Nippon India Liquid Fund Direct Growth

Fund Performance: This fund has given 6.52% annualized returns in the last three years. In the last year, its returns were 5.02%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 5.02% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹100. Minimum SIP investment amount required for this scheme is ₹100.

Min Investment Amt₹100
AUM26,900Cr
1Y Returns5.0%

LIC MF Liquid Fund Direct Growth

Fund Performance: This fund has given 6.47% annualized returns in the last three years. In the last year, its returns were 5.05%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 5.05% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt₹5,000
AUM10,140Cr
1Y Returns5.0%

Aditya Birla Sun Life Liquid Fund Direct Growth

Fund Performance: This fund has given 6.53% annualized returns in the last three years. In the last year, its returns were 5.03%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 5.03% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt₹500
AUM39,810Cr
1Y Returns5.0%

Mahindra Manulife Liquid Fund Direct Growth

Fund Performance: This fund has given 6.54% annualized returns in the last three years. In the last year, its returns were 5.06%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 5.06% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹1,000. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹1,000
AUM2,138Cr
1Y Returns5.1%

Tata Liquid Fund Direct Growth

Fund Performance: This fund has given 6.48% annualized returns in the last three years. In the last year, its returns were 5.06%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 5.06% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹5,000
AUM18,934Cr
1Y Returns5.1%

BNP Paribas Liquid Fund Direct Growth

Fund Performance: This fund has given 6.48% annualized returns in the last three years. In the last year, its returns were 4.91%. It has continually hit its benchmark in the Liquid segment.

Why to invest: It is one of the most remarkable Liquid mutual funds in India. This fund has constantly outperformed other similar funds, providing 4.91% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹5,000
AUM981Cr
1Y Returns4.9%

Axis Liquid Direct Fund Growth

Fund Performance: This fund has given 6.48% annualized returns in the last three years. In the last year, its returns were 4.98%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 4.98% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹500
AUM28,818Cr
1Y Returns5.0%

UTI Liquid Cash Direct Growth

Fund Performance: This fund has given 6.44% annualized returns in the last three years. In the last year, its returns were 4.91%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 4.91% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹2,500.

Min Investment Amt₹500
AUM27,459Cr
1Y Returns4.9%

Baroda Liquid Direct Fund Growth

Fund Performance: This fund has given 6.47% annualized returns in the last three years. In the last year, its returns were 4.9%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 4.9% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹5,000
AUM3,457Cr
1Y Returns4.9%

HSBC Cash Fund Direct Growth

Fund Performance: This fund has given 6.41% annualized returns in the last three years. In the last year, its returns were 4.79%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 4.79% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹5,000
AUM3,905Cr
1Y Returns4.8%

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