Liquid Funds - Liquid Mutual Funds Investment in India | SBI Mutual Fund (2024)

FAQs

Are mutual funds liquid enough? ›

Investors can buy shares of a mutual fund rather than purchase shares of an individual stock. These transactions are executed by the fund manager or through a broker rather than on an open market. Mutual funds are considered liquid because investors can sell their shares at any time and receive their money within days.

1,000 monthly in SBI SIP? Yes, you can invest Rs. 1,000 per month in an SBI mutual fund SIP. However, it is essential to confirm whether the selected fund allows for this investment amount, as the minimum SIP amount varies among funds.

1. Current NAV: The Current Net Asset Value of the Nippon India Liquid Fund - Direct Plan as of Jun 21, 2024 is Rs 1,594.81 for IDCW Monthly option of its Direct plan. 2. Returns: Its trailing returns over different time periods are: 7.38% (1yr), 5.81% (3yr), 5.3% (5yr) and 6.88% (since launch).

Liquid Funds are one of the safest mutual funds. That's because they lend to good companies for an extremely short duration, and that reduces risk. The risk of losing money is almost zero if you stay invested for some amount of time.

What are the advantages and disadvantages of investing in liquid funds vs fixed deposits? Liquid funds offer higher returns and flexibility, but are subject to market risk. Fixed deposits are more stable, but offer lower returns and less flexibility. An investor's decision depends on their circ*mstances and goals.

A liquid fund is a low-risk debt fund as most of the investment of liquid funds is in government securities. Owing to this fact, liquid funds invest in papers which mature in less than 91 days, and the risk associated with these funds is quite low.

Kukreja says since debt funds usually generate lower returns than equity funds for investment horizons of 5 years or more. Thus, assuming an annualised returns of 7 per cent from debt funds, an investor would need to invest Rs 1.40 lakh per month through SIP to create a corpus of Rs 1 crore in 5 years.

For example, if an individual plan to accumulate ₹50 lakhs over the tenure of 5 years, assuming the individual invests in a Flexicap fund or a Multicap fund which is giving an annualized return of 15%, then the individual needs to invest ₹55,750 per month for 5 years in order to generate the required corpus.

If you can invest Rs 5,000 per month, you can save Rs 1 crore in a little more than 26 years (317 months) at 12% interest rate.

What are the disadvantages of liquid funds? ›

The disadvantages of liquid funds are as follows: Exposure to certain risks: Liquid funds may carry some risks like inflation risk, interest rate risk and credit risk. You can minimise some of these risks by choosing your mutual fund house and scheme after careful analysis.

Tata Liquid Fund Direct-Growth has ₹21,012 Crores worth of assets under management (AUM) as on 31/03/2024 and is medium-sized fund of its category. The fund has an expense ratio of 0.21%, which is close to what most other Liquid funds charge.

You can redeem anytime you want. There is no lock‐in period in liquid funds. Do liquid funds have an exit load? Yes, but only if you redeem within seven days of investing.

Fund Type

For equity funds, as mentioned above, market volatility plays a huge factor in returns. Debt funds are less affected by market trends and are likely to give you similar returns for lumpsum and SIP investments. Choosing a SIP over a lump-sum investment should be based on your personal requirements.

Another advantage is liquidity, as investors can typically buy and sell shares of mutual funds relatively quickly. This flexibility helps you tailor your approach to meet your financial goals. U.S. Securities and Exchange Commission.

ETFs are more liquid than mutual funds because of their structure and the fact that you can sell them like stocks on stock exchanges during trading hours. Also, as ETFs are traded on stock exchanges, they get an active secondary market that enables you to execute trade efficiently.

Exposure to certain risks: Liquid funds may carry some risks like inflation risk, interest rate risk and credit risk. You can minimise some of these risks by choosing your mutual fund house and scheme after careful analysis.

Examples of liquid assets include cash, money market accounts, checking accounts and savings accounts. Though there is some debate about this, some people also regard as liquid accounts receivable, stocks, mutual funds, bonds and any other securities that can be quickly turned into cash.