Common questions

Which liquid fund is best for 2021?

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Which liquid fund is best for 2021?

Top 10 Liquid Funds In India For 2021

Fund Name 3 Year Returns 5 Year Returns
HDFC Liquid Fund 6.04\% 6.46\%
Invesco India Liquid Fund 6.07\% 6.53\%
Axis Liquid Fund 6.21\% 6.61\%
ICICI Prudential Liquid Fund 6.17\% 6.58\%

When should you invest in liquid funds?

SEBI has mandated the upper limit of expense ratio to be 1.05\%. Considering the hold till maturity strategy of the fund manager, liquid funds maintain a low expense ratio to offer comparatively higher returns over a short term. Liquid funds are ideal to invest surplus cash for a short period say, up to three months.

Is it right time to invest in liquid funds?

There are certain banks which can provide higher returns in their savings accounts compared to certain liquid funds and vice versa. Liquid funds invest in instruments having maturities up to 91 days, thus depending on the fund the ideal holding time horizon in this category should be anywhere between 1 and 3 months.

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How do I choose a liquid fund?

For this reason, you should choose liquid funds that are large. These can handle redemption pressures better than liquid funds with smaller AUMs. As a rule of thumb, you should invest in a liquid fund which has an AUM of at least Rs. 20,000 crores.

Which is best FD or liquid fund?

Comparison of Liquid Funds With Fixed Deposits

Parameter Liquid Funds Fixed Deposits
Returns Slightly higher Lower
Suitability Both short-term and long-term investors Long-term investors
Risk Medium Low
Premature withdrawals Yes (with low penalties) Yes (with higher penalties)

Do I need to pay tax on liquid funds?

LTCG from debt funds is taxable at a flat rate of 20\% after indexation. Dividends offered by all mutual funds are added to your overall income and taxed at your income tax slab rate.

What are the best mutual funds?

Vanguard. Vanguard takes top honors for 2020.

  • BlackRock/iShares. BlackRock is best known for its iShares line of ETFs.
  • Fidelity. Over the years,Fidelity has been home to many of the best mutual fund managers.
  • T. Rowe Price.
  • ProShares. If you are looking for leverage,ProShares provides a variety of ETFs.
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    What are alternative mutual funds?

    An alternative energy mutual fund is a company that pools money from its investors and invests it in a group of companies that are engaged in some way in the development of alternative energy resources, such as wind, geothermal or solar energy. The major alternative energy mutual funds also invest in companies that promote a clean environment.

    What are liquid mutual funds?

    Liquid funds are a type of debt mutual funds which primarily invest in money market securities as short as one day. As the name implies, these funds have high liquidity andthe returns are less fluctuating since these funds invest in securities which are maturing in very short-term.

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