Liquid Mutual funds are a category of mutual funds which invests in debt securities which has very short term maturity. Maximum Maturity of security included in portfolio is upto 90 days. Treasury Bills, Call money instruments etc. are the examples of liquid securities. Liquidity or marketability of these securities are very high but coupon rate is also low when compared to longer maturity debt/bond security. These securities are also less influenced by interest rate fluctuations. Liquid funds are good option of Bank Saving Accounts. In high inflation scenario liquid funds returns could significantly above bank saving accounts.
Tax implication can be downloaded by clicking here.
To Whom it is suitable:-
- Investors seeking an attractive option for surplus money deployment.
- Liquid Funds are also a good option for investors who keeps high surplus money in their current account. In now days AMCs have launched innovative investment vehicles such as mobile transact (where investor can send SMS for redemption and purchase), online transact (where investor having online transaction pin, can place redemption or purchase instructions) etc. which may be proved very helpful in managing surplus money and earn extra benefit.
Disclaimer: Mutual fund investment are subject to market risk, please read all scheme related documents carefully before investing.