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 Name | Category | Risk | 1Y Returns | Rating | Fund Size(in Cr) | |
|---|---|---|---|---|---|---|
| Quant Liquid Fund | Debt | Moderately High | 4.8% | 5star | ₹148 | |
| IDBI Liquid Fund | Debt | Low to Moderate | 3.8% | 5star | ₹1,114 | |
| Franklin India Liquid Fund | Debt | Low to Moderate | 3.6% | 5star | ₹2,179 | |
| Edelweiss Liquid Fund | Debt | Low to Moderate | 3.7% | 5star | ₹1,083 | |
| Mahindra Liquid Fund | Debt | Low to Moderate | 3.7% | 4star | ₹1,728 | |
| PGIM India Insta Cash Fund | Debt | Low to Moderate | 3.7% | 4star | ₹605 | |
| Nippon India Liquid Fund | Debt | Low to Moderate | 3.7% | 4star | ₹23,219 | |
| Aditya Birla Sun Life Liquid Fund | Debt | Moderate | 3.7% | 4star | ₹27,433 | |
| Tata Liquid Fund | Debt | Low to Moderate | 3.6% | 4star | ₹13,109 | |
| LIC MF Liquid Fund | Debt | Low to Moderate | 3.6% | 4star | ₹6,658 | |
| ICICI Prudential Liquid Fund | Debt | Moderate | 3.7% | 4star | ₹37,777 | |
| Union Liquid Fund | Liquid | Low to Moderate | 3.7% | 4star | ₹781 | |
| BNP Paribas Liquid Fund | Liquid | Low to Moderate | 3.5% | 3star | ₹1,124 | |
| Baroda Pioneer Liquid Fund | Debt | Low to Moderate | 3.5% | 3star | ₹4,798 | |
| Axis Liquid Fund | Debt | Low to Moderate | 3.6% | 3star | ₹21,568 | |
| 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.
Quant Liquid Direct Plan Growth
Fund Performance: This fund has given 6.5% annualized returns in the last three years. In the last year, its returns were 4.85%. 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 4.85% 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 |
|---|---|
| AUM | ₹148Cr |
| 1Y Returns | 4.8% |
IDBI Liquid Fund Direct Growth
Fund Performance: This fund has given 5.92% annualized returns in the last three years. In the last year, its returns were 3.83%. 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 3.83% 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 |
|---|---|
| AUM | ₹1,114Cr |
| 1Y Returns | 3.8% |
Franklin India Liquid Fund Direct Growth
Fund Performance: This fund has given 5.92% annualized returns in the last three years. In the last year, its returns were 3.58%. 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 3.58% 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 |
|---|---|
| AUM | ₹2,179Cr |
| 1Y Returns | 3.6% |
Edelweiss Liquid Direct Growth
Fund Performance: This fund has given 5.87% annualized returns in the last three years. In the last year, its returns were 3.71%. 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 3.71% 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 ₹5,000.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹1,083Cr |
| 1Y Returns | 3.7% |
Mahindra Manulife Liquid Fund Direct Growth
Fund Performance: This fund has given 5.89% annualized returns in the last three years. In the last year, its returns were 3.72%. 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 3.72% 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 |
|---|---|
| AUM | ₹1,728Cr |
| 1Y Returns | 3.7% |
PGIM India Insta Cash Fund Direct Plan Growth
Fund Performance: This fund has given 5.85% annualized returns in the last three years. In the last year, its returns were 3.72%. 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 3.72% 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 ₹1,000.
| Min Investment Amt | ₹100 |
|---|---|
| AUM | ₹605Cr |
| 1Y Returns | 3.7% |
Nippon India Liquid Fund Direct Growth
Fund Performance: This fund has given 5.84% annualized returns in the last three years. In the last year, its returns were 3.69%. 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 3.69% 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 |
|---|---|
| AUM | ₹23,219Cr |
| 1Y Returns | 3.7% |
Aditya Birla Sun Life Liquid Fund Direct Growth
Fund Performance: This fund has given 5.84% annualized returns in the last three years. In the last year, its returns were 3.7%. 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 3.7% 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 |
|---|---|
| AUM | ₹27,433Cr |
| 1Y Returns | 3.7% |
Tata Liquid Fund Direct Growth
Fund Performance: This fund has given 5.81% annualized returns in the last three years. In the last year, its returns were 3.64%. 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 3.64% 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 |
|---|---|
| AUM | ₹13,109Cr |
| 1Y Returns | 3.6% |
LIC MF Liquid Fund Direct Growth
Fund Performance: This fund has given 5.8% annualized returns in the last three years. In the last year, its returns were 3.64%. 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 3.64% 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 |
|---|---|
| AUM | ₹6,658Cr |
| 1Y Returns | 3.6% |
ICICI Prudential Liquid Fund Direct Plan Growth
Fund Performance: This fund has given 5.79% annualized returns in the last three years. In the last year, its returns were 3.68%. 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 3.68% 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 |
|---|---|
| AUM | ₹37,777Cr |
| 1Y Returns | 3.7% |
Union Liquid Fund Direct Growth
Fund Performance: This fund has given 4.5% annualized returns in the last three years. In the last year, its returns were 3.66%. 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 3.66% 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 ₹2,000.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹781Cr |
| 1Y Returns | 3.7% |
BNP Paribas Liquid Fund Direct Growth
Fund Performance: This fund has given 5.82% annualized returns in the last three years. In the last year, its returns were 3.54%. 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 3.54% 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 |
|---|---|
| AUM | ₹1,124Cr |
| 1Y Returns | 3.5% |
Baroda Liquid Direct Fund Growth
Fund Performance: This fund has given 5.79% annualized returns in the last three years. In the last year, its returns were 3.46%. 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 3.46% 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 |
|---|---|
| AUM | ₹4,798Cr |
| 1Y Returns | 3.5% |
Axis Liquid Direct Fund Growth
Fund Performance: This fund has given 5.79% annualized returns in the last three years. In the last year, its returns were 3.6%. 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 3.6% 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 |
|---|---|
| AUM | ₹21,568Cr |
| 1Y Returns | 3.6% |
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