Top 10 Liquid Mutual Funds

Fund NameCategoryRisk1Y ReturnsRatingFund Size(in Cr)
Essel Liquid FundDebtLow7.7%5star147
Mahindra Liquid FundDebtLow7.7%5star3,050
IDBI Liquid FundDebtLow7.7%5star2,870
Escorts Short Term Debt FundDebtModerately Low8.0%5star27
Baroda Pioneer Liquid FundDebtLow7.7%5star6,323
DHFL Pramerica Insta Cash FundDebtLow7.7%4star891
Edelweiss Liquid FundDebtLow7.6%4star3,731
Reliance Liquid FundDebtLow7.7%4star34,422
Axis Liquid FundDebtLow7.6%4star30,460
Aditya Birla Sun Life Liquid FundDebtLow7.6%4star53,023
Franklin India Liquid FundDebtLow7.8%4star9,643
SBI Magnum Ultra Short Duration FundDebtLow8.5%4star8,143
BOI AXA Liquid FundDebtLow7.6%4star570
Canara Robeco Liquid FundDebtLow7.5%3star1,197
ICICI Prudential Liquid FundDebtLow7.6%3star57,392
View All Top 10 Liquid Mutual Funds

Best Liquid Mutual Funds

Liquid Funds invest in debt securities with very short maturities of up to 91 days (like lending to banks, short term govt. bonds and very short-term corporate paper). They provide full flexibility of anytime liquidity and earn returns in the form of interest for the holding period. They are highly secure due to kind of entities (Govt., Banks, Top Corporates (Small amount)). A number of corporates use liquid funds for their treasury management.

These invest in short term (90 days) bonds and other similar instruments. One can use them as an emergency fund. These are meant for parking your money and keep it handy so that you can redeem it as and when required. Returns are taxed as per your income tax slab if sold before three years.

Purpose: Invest in these funds if you want to park your money as an emergency fund, and redeem as per need.

Let's have a closer look

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

Essel Liquid Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Liquid segment and provided 7.33% annualized returns in the last 3 years. In the last 1 year, it gave 7.66% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 7.66% returns in the last 1 year. Groww rated this fund as 5 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Killol Pandya, Archit Shah

Launch Date31 Dec 2012
Min Investment Amt1,000
Groww Rating5star
AUM147Cr
1Y Returns7.7%

Mahindra Liquid Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Liquid segment and provided -100% annualized returns in the last 3 years. In the last 1 year, it gave 7.71% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 7.71% returns in the last 1 year. Groww rated this fund as 5 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Rahul Pal

Launch Date3 Jul 2016
Min Investment Amt1,000
Groww Rating5star
AUM3,050Cr
1Y Returns7.7%

IDBI Liquid Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Liquid segment and provided 7.21% annualized returns in the last 3 years. In the last 1 year, it gave 7.68% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 7.68% returns in the last 1 year. Groww rated this fund as 5 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Raju Sharma

Launch Date31 Dec 2012
Min Investment Amt5,000
Groww Rating5star
AUM2,870Cr
1Y Returns7.7%

Escorts Short Term Debt Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Liquid segment and provided 7.38% annualized returns in the last 3 years. In the last 1 year, it gave 8.02% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 8.02% returns in the last 1 year. Groww rated this fund as 5 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Pushpa Rai

Launch Date6 Jan 2013
Min Investment Amt1,000
Groww Rating5star
AUM27Cr
1Y Returns8.0%

Baroda Pioneer Liquid Fund - Plan B - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Liquid segment and provided 7.27% annualized returns in the last 3 years. In the last 1 year, it gave 7.67% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 7.67% returns in the last 1 year. Groww rated this fund as 5 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Alok Kumar Sahoo, Hetal Shah

Launch Date31 Dec 2012
Min Investment Amt5,000
Groww Rating5star
AUM6,323Cr
1Y Returns7.7%

DHFL Pramerica Insta Cash Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Liquid segment and provided 7.22% annualized returns in the last 3 years. In the last 1 year, it gave 7.66% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 7.66% returns in the last 1 year. Groww rated this fund as 4 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Kumaresh Ramakrishnan, Kunal Jain

Launch Date31 Dec 2012
Min Investment Amt100
Groww Rating4star
AUM891Cr
1Y Returns7.7%

Edelweiss Liquid Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Liquid segment and provided 7.04% annualized returns in the last 3 years. In the last 1 year, it gave 7.64% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 7.64% returns in the last 1 year. Groww rated this fund as 4 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Gautam Kaul, Rahul Dedhia

Launch Date31 Dec 2012
Min Investment Amt5,000
Groww Rating4star
AUM3,731Cr
1Y Returns7.6%

Reliance Liquid Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Liquid segment and provided 7.24% annualized returns in the last 3 years. In the last 1 year, it gave 7.66% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 7.66% returns in the last 1 year. Groww rated this fund as 4 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Anju Chajjer

Launch Date31 Dec 2012
Min Investment Amt100
Groww Rating4star
AUM34,422Cr
1Y Returns7.7%

Axis Liquid Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Liquid segment and provided 7.23% annualized returns in the last 3 years. In the last 1 year, it gave 7.62% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 7.62% returns in the last 1 year. Groww rated this fund as 4 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Devang Shah, Aditya Pagaria

Launch Date31 Dec 2012
Min Investment Amt500
Groww Rating4star
AUM30,460Cr
1Y Returns7.6%

Aditya Birla Sun Life Liquid Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Liquid segment and provided 7.22% annualized returns in the last 3 years. In the last 1 year, it gave 7.62% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 7.62% returns in the last 1 year. Groww rated this fund as 4 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Sunaina da Cunha, Kaustubh Gupta

Launch Date25 Dec 2012
Min Investment Amt1,000
Groww Rating4star
AUM53,023Cr
1Y Returns7.6%

Franklin India Liquid Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Liquid segment and provided 7.26% annualized returns in the last 3 years. In the last 1 year, it gave 7.75% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 7.75% returns in the last 1 year. Groww rated this fund as 4 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Sachin Padwal-Desai, Pallab Roy

Launch Date31 Dec 2012
Min Investment Amt10,000
Groww Rating4star
AUM9,643Cr
1Y Returns7.8%

SBI Magnum Ultra Short Duration Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Liquid segment and provided 7.5% annualized returns in the last 3 years. In the last 1 year, it gave 8.5% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 8.5% returns in the last 1 year. Groww rated this fund as 4 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Rajiv Radhakrishnan

Launch Date31 Dec 2012
Min Investment Amt5,000
Groww Rating4star
AUM8,143Cr
1Y Returns8.5%

BOI AXA Liquid Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Liquid segment and provided 7.23% annualized returns in the last 3 years. In the last 1 year, it gave 7.56% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 7.56% returns in the last 1 year. Groww rated this fund as 4 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Piyush Baranwal

Launch Date31 Dec 2012
Min Investment Amt5,000
Groww Rating4star
AUM570Cr
1Y Returns7.6%

Canara Robeco Liquid Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Liquid segment and provided 7.07% annualized returns in the last 3 years. In the last 1 year, it gave 7.49% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 7.49% returns in the last 1 year. Groww rated this fund as 3 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Suman Prasad, Girish Hisaria

Launch Date29 Mar 2016
Min Investment Amt5,000
Groww Rating3star
AUM1,197Cr
1Y Returns7.5%

ICICI Prudential Liquid Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Liquid segment and provided 7.17% annualized returns in the last 3 years. In the last 1 year, it gave 7.57% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 7.57% returns in the last 1 year. Groww rated this fund as 3 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Rahul Goswami, Rohan Maru

Launch Date31 Dec 2012
Min Investment Amt100
Groww Rating3star
AUM57,392Cr
1Y Returns7.6%

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Can you save tax with Liquid Mutual fund?

If held for less than 3 years, capital gains would be added to investor’s income and taxed at his marginal rate of tax but compared to FD which is taxed annually these funds are taxed on exit.There are many Liquid Funds available in India that one can invest in but their performance is very similar. The most important feature we need to focus on while evaluating liquid funds is the lowest risk possible. In terms of returns, they provide very similar returns as FD and you can withdraw anytime without any penalty.

What are the parameters used for the best liquid fund?

Size of fund: 5k Cr+. Low Risk based on standard deviation of quarterly returns <0.2. Average returns: annual, quarterly (annualized) to be 8%+ net of expense ratio. Duration of portfolio to be < 1year. Excluded Institutional Plans. Exit load: Nil and Credit quality to be AA or plus.

Why opt for Liquid Funds?

Higher returns: Your hard earned money that lies in a savings bank account fetches you 4% interest per annum. However, the best liquid funds have returned as high as 8-9% on an average in the past 1-year period, daily, on an annualized basis. On returns alone, liquid funds score over a savings bank account. If you have a raise or a bonus coming your way, invest in liquid funds and party later. Even as compared to FD, the returns are higher in liquid funds. Look at the graph below for understanding how much the difference is costing you. Less Risks: Liquid funds are invested in government bonds and high credited companies. The risks are the lowest with you can get when you’re investing in the market. They are the least risky and least volatile among mutual funds Liquid funds are like parking lots, you park your money while you are out doing something important, and when you come back to it, it appears to be washed and waxed. Whenever you want, you get your money back, and the profits are striking. Easier tax implications: Your bank interest gets taxed at income tax rates (30.9% for the highest tax bracket; including surcharge). You need to collect TDS certificates, re-calculate taxes and submit it while filing returns. With Liquid funds, the interest income falls in Capital Gain income. In case it’s earned in less than 3 years, you need to pay tax, just like income. In case it’s after 3 years, i.e. its long term capital gain, the tax would be on interest earned after indexation. The overall tax rates come down to 8-9% instead of ~30% in case of FD for long term capital gain. So, you can constantly increase your money without getting as much tax cuts as in a fixed deposit. No lock-in period: There is no lock-in period when you invest in liquid funds. You can withdraw at any time without getting charged a penny. All you have to do is notify for the request. The withdrawals from these funds are processed within 24 hours (business days). The cut- off time for the withdrawals is set at 2 pm which basically means if a request is made within 2 pm on a business day then the funds will get credited to your bank account within the next business day by 10 am. The fixed deposits on another hand, charge you if you withdraw before the maturity. No entry and exit loads: There are certain funds that can be purchased without the sales charge and be withdrawn with no charges, cutting at your profits. Entry load is charged at the time an investor purchases the units of a scheme. Exit load is charged at the time of redeeming (or transferring an investment between schemes). Liquid funds are free from both.

Why are Liquid funds better than FDs?

Offer superior liquidity compared to bank FDs. Bank FDs would penalize you for premature withdrawal. Returns are generally better than FD returns with slightly higher risk profile.

What is the return in liquid funds?

Liquid funds have given returns in the range of 6-8% per annum. The returns given by liquid funds do not change much and are very stable. It is this stability that allows people to store money in liquid funds without worrying about market conditions or volatility.

How to invest in Liquid mutual funds on Groww?

One of the best ways to hedge against the small-cap volatility is to adopt a phased approach, also known as Systematic Investment Plan (SIP) approach. We are sure that you must be aware of SIP and its benefits. Buying in small quantity but buying regularly provides you with faster growth. On Groww.in, all transactions to and from AMC is done via BSE. When you decide to invest in a large cap mutual fund of your choice, you choose that mutual fund on the website and click ‘invest’. Following that, you are redirected to the BSE page where you make the payment. BSE then directs your money to the AMC managing your mutual fund. To be assured at your end, you can visit the individual AMC website after the payment. You would be able to see all your purchased units against your folio number.

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Mutual fund investments are subject to market risks. Please read the scheme information and other related documents carefully before investing.
Past performance is not indicative of future returns. Please consider your specific investment requirements, risk tolerance, investment goal, time frame, risk and reward balance and the cost associated with the investment before choosing a fund, or designing a portfolio that suits your needs.
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