Top Liquid Funds to Invest…!!
Indian economy suffers from saving glut. Indian loves to save their money in their savings accounts so that they can withdraw their money whenever required. But the interest offered by saving banks is between 4 to 6%. The reason behind such a high proportion of saving mentality is due to a lack of awareness about investment opportunities in the masses. There are numerous investment opportunities available in the market. Investment options do carry a risk compared to the savings account, but they also give a higher return. So, in case if an investor doesn’t want to take much risk and expect higher returns compared to saving, then liquid funds are one of the best options.
These are mainly debt mutual funds, which invest money in very short-term market instruments such as treasury bills, call money and government securities. These funds invest in instruments with a maturity of 91 days. The returns in the scheme are better, because it doesn’t get affected by market movement. Liquid funds are considered as hedge funds for common people, as it implies typical hedge fund strategies in the mutual fund format with daily liquidity. These are non-volatile and shifts in their NAV occur due to changes in interest rates not in the market volatility. Let’s look at the other features of these funds.
- No Exit Load: It has no exit load. The fund house doesn’t charge any extra amount for redemption.
- Quick Withdrawal: It’s one of the most flexible investment vehicles, where one can withdraw their amount usually within a span of 24 hours.
- Tax benefit: Liquid funds offer valuable tax benefits.
- Good Return: Liquid funds offer good returns. On average, the liquid fund offers 8 to 10% annual returns.
Key Factor to look upon before putting your money in Liquid Funds.
For an investor, investing in a liquid fund doesn’t require much wisdom. But they must look upon various factors such as credit risk, credit rating, portfolio, and historic performance. In the case of liquid funds, the credit risk is quite low, but it’s better to take a glance at the portfolio concentration. One of the crucial factors to look upon is the credit rating,
The ratings of the schemes ensure that funds are highly beneficial. The highest credit rating is AAA, which denotes less chance of default, hence it’s less risky. But investors should also look upon the historical performance of the fund before investing. It will provide them a glimpse of consistency in returns. Let’s look at the top liquid funds recommended fund by Gulaq :
One of the most important tips for an investor before investing in a liquid fund is to prefer top AMC’s. It’s mainly because returns are the same in any of the liquid funds.
“Are you looking to invest? How about opening your account with Gulaq & start investing in Direct Mutual Funds? Get in touch.”
*Mutual fund investments are subject to market risks. Please read the scheme information and other related documents carefully before investing.