Contents
- Characteristics of liquids funds:
- Taxation on Liquid Funds:-
- Top 10 Liquid Fund Returns
- 1. Reliance Liquid Fund
- 2. HDFC Liquid Fund
- 3. Axis Liquid Fund
- 4. Indiabulls Liquid Fund
- 5. Principal Cash Management Fund
- 6. ICICI Prudential Liquid Fund – Direct-Growth
- 7. L&T Liquid Fund – Direct-Growth
- 8. Essel Liquid Fund
- 9. HSBC Cash Fund
- 10.Tata Money Market Fund
- How Liquid Fund Give you Better Returns than Saving Bank Accounts
Liquid fund is a type of debt fund that holds the least amount of risk, still, gets you the best returns possible. It invests your money in very short-term market instruments such as treasury bills, government securities, and call money. These funds can invest in instruments till maturity of 91 days. The maturity is frequently much lower than that. Let us know about liquid fund returns.
Characteristics of liquids funds:
Given below are the main characteristics of liquid funds:-
1. Out of all debt funds, liquid funds offer the most permanent returns.
2. They can easily be converted into cash within a day.
3. The best liquid funds for the investors, who have the extra money in their savings bank accounts or surpluses. But cannot put that in fixed deposits due to some personal reason or predict some emergency.
4. They invest in instruments with up to 91 days of maturity period.
5. Return on investment in liquid funds is around 6-8%. Which is more than fixed deposits.
6. Easy Liquidity: You can withdraw your money within one day.
7. Dividends available on these liquid funds are tax-free.
8. Net Asset Value (NAV) of liquid funds does not change much against other mutual fund schemes.
9. The expense ratio for investment in liquid funds is lower than all other types of mutual funds.
10. Liquid funds are best for those investors who do not want to take out more risk, do not want to invest in the stock market and want permanent returns on the investment.
Taxation on Liquid Funds:-
Liquid fund taxation is of two types depending on their time period. Below are the two types:
- Short Term Capital Gain Tax: This applies to Liquid Funds held for 36 months or less, i.e. less than 3 years. In short term capital gain tax, tax on funds is calculated according to the income tax slab of the person, i.e. 5%, 20% or 30% on the amount of profit.
- Long-term capital gain tax: This applies for 36 months or more, i.e. over 3 years of liquid funds. Taxes on funds in Long-Term Capital Gain Tax are calculated on the amount of profit depending on their indexation.
- Indexation is a way of reducing the effect of inflation on your purchasing value. And you need to pay less tax.
For example,
| Particulars | Fixed Deposits | Debt Funds |
| Invested Sum | ₹10 lakhs | ₹ 10lakhs |
| Return Rate (suppose) | 10% | 10% |
| Lock-in Period | 5 year | 5 year |
| At the end of tenure, Fund worth | ₹15,00,000 | ₹15,00,000 |
| Inflation per year | 8% | 8% |
| Indexed Investment Sum | – | ₹ 14,00,000 |
| Taxed Amount | ₹5,00,000 | ₹1,00,000 |
| Tax to be paid | ₹1,50,000 | ₹20,000 |
| Possible returns after tax | ₹3,50,000 | ₹4,80,000 |
Come see the 10 best liquid funds for 2018, which you can invest in. To choose from in 2018, the list of the 10 best liquid funds available in the market is given here.
Top 10 Liquid Fund Returns
Here are some of the best liquid funds, before investing which you should pay attention:
1. Reliance Liquid Fund
At present, Reliance Fund is one of the most popular liquid funds in the market and its objective is to provide consistent returns with a good risk and high liquidity. Reliance liquid fund is one of the best liquid funds in 2018.
Important information about this fund is given here:
| Launch Date | 09/12/2003 |
| NAV | ₹4,282.4676 |
| Ratings by Wealthbucket | 2 Star |
| AUM (Fund Size) | ₹21,747 |
| Riskometer | Low |
| Minimum SIP | ₹500 |
| Minimum SWP | Not Supported |
| Benchmark Performance | Has consistently outperformed its benchmark CRISIL Liquid since its launch. |
| Age of the fund | 16 years old |
| Expense Ratio | 0.23% |
| Exit Load | NIL |
| Type | Open-Ended |
| Period | Returns |
| 1 year | 6.90% |
| 3 year | 7.42% |
| 5 year | 8.14% |
| From the launch | 8.21% |
2. HDFC Liquid Fund
The basic purpose of this plan from the house of HDFC MF is to increase the income by keeping more liquidity, for which the money market and debt instruments (debt instruments) are made into a portfolio with intelligence. HDFC liquid fund is also one of the best performing Liquid Funds of 2018.
Important information about this fund is given here:
| Launch Date | 17/10/2000 |
| NAV (24 May 2018) | ₹3,457.8237 |
| Plan Type | Direct |
| Ratings by Wealthbucket | 2 Star |
| AUM (Fund Size) | ₹30,233 |
| Riskometer | Very High |
| Minimum SIP | ₹500 |
| Minimum SWP | ₹500 |
| Benchmark Performance | Has consistently outperformed its benchmark CRISIL Liquid since its launch. |
| Age of the fund | 19 years old |
| Expense Ratio | 0.15% |
| Exit Load | NIL |
| Type | Open-Ended |
Returns of the fund in the last few years:
| Period | Returns |
| 1 year | 6.73% |
| 3 years | 7.33% |
| 5 years | 8.08% |
| From the launch | 8.15% |
3. Axis Liquid Fund
Axis MF with this scheme tries to give better returns with lower risk and higher liquidity than the money market and portfolio of high-quality debt securities.
Important information about Axis liquid fund is given here:
| Launch Date | 09/10/2009 |
| NAV (24 May 2018) | ₹1,947.0198 |
| Plan Type | Direct |
| Ratings by Wealthbucket | 2 Star |
| AUM (Fund Size) | ₹24,161 |
| Riskometer | Very Low |
| Minimum SIP | Not Supported |
| Minimum SWP | ₹1,000 |
| Benchmark Performance | Has consistently outperformed its benchmark CRISIL Liquid since its launch. |
| Age of the fund | 10 years old |
| Expense Ratio | 0.11% |
| Exit Load | NIL |
| Type | Open-Ended |
Returns of the fund in the last few years:
| Period | Returns |
| 1 year | 6.93% |
| 3 years | 7.41% |
| 5 years | 8.13% |
| From the launch | 8.19% |
4. Indiabulls Liquid Fund
At present, Indiabulls Liquid Fund is one of the best liquid funds in the market and it aims to provide higher liquidity and lower risk returns than the portfolio of money market and high-quality debt securities (whose maturity is 91 days).
Be given Important information about this fund is given here:
| Launch Date | 25 October 2011 |
| NAV (24 May 2018) | ₹1,715.633 |
| Plan Type | Direct |
| Ratings by Wealthbucket | 2 Star |
| AUM (Fund Size) | ₹4,541 |
| Riskometer | Very Low |
| Minimum SIP | Not Supported |
| Minimum SWP | ₹500 |
| Benchmark Performance | Has consistently outperformed its benchmark CRISIL Liquid since its launch. |
| Age of the fund8 | 8 years old |
| Expense Ratio | 0.07% |
| Exit Load | NIL |
| Type | Open-Ended |
Returns of the fund in the last few years:
| Period | Returns |
| 1 year | 6.93% |
| 3 years | 7.55% |
| 5 years | 8.21% |
| From the launch | 8.27% |
5. Principal Cash Management Fund
Here is the key information of Principal cash management fund:
| Launch Date | Aug 31, 2004 |
| NAV (24 May 2018) | ₹1,710.8879 |
| Plan Type | Direct |
| Ratings by Wealthbucket | 2 Star |
| AUM (Fund Size) | ₹1,271 |
| Riskometer | Very Low |
| Minimum SIP | Not Supported |
| Minimum SWP | ₹500 |
| Benchmark Performance | Has consistently outperformed its benchmark CRISIL Liquid since its launch. |
| Age of the fund | 15 years old |
| Expense Ratio | 0.15% |
| Exit Load | NIL |
| Type | Open-Ended |
Returns of the liquid fund returns in the last few years:
| Period | Returns |
| 1 year | 6.96% |
| 3 years | 7.46% |
| 5 years | 8.71% |
| From the launch | 8.22% |
6. ICICI Prudential Liquid Fund – Direct-Growth
ICICI Prudential Liquid fund is also the best mutual fund of the liquid category, from ICICI AMC. Important information about ICICI prudential liquid fund is given here:
| Launch Date | 17/11/2005 |
| NAV (24 May 2018) | ₹259.0551 |
| Plan Type | Direct |
| Ratings by Wealthbucket | 2 Star |
| AUM (Fund Size) | ₹27,290 |
| Riskometer | Very Low |
| Minimum SIP | Not Supported |
| Minimum SWP | ₹1,000 |
| Benchmark Performance | Has consistently outperformed its benchmark CRISIL Money Market Index since its launch. |
| Age of the fund | 14 years old |
| Expense Ratio | 0.15% |
| Exit Load | NIL |
| Type | Open-Ended |
Returns of the fund in the last few years:
| Period | Return |
| 1 year | 6.85% |
| 3 years | 7.38% |
| 5 years | 8.12% |
| From the launch | 8.26% |
7. L&T Liquid Fund – Direct-Growth
This fund, giving proper returns, keeps them safe, and also gives better liquidity to the investor. This helps in investing in high liquidity and well-diversified portfolios such as Money Market Instruments, Government Securities and Corporate Loans.
Important information about this fund is given here:
| Launch Date | 03/10/2006 |
| NAV (24 May 2018) | ₹2,407.753 |
| Plan Type | Direct |
| Ratings by Wealthbucket | 3 Star |
| AUM (Fund Size) | ₹13,995 |
| Riskometer | Very Low |
| Minimum SIP | Not Supported |
| Minimum SWP | ₹500 |
| Benchmark Performance | Has consistently outperformed its benchmark CRISIL Money Market Index since its launch. |
| Age of the fund | 13-years old |
| Expense Ratio | 0.04% |
| Exit Load | NIL |
| Type | Open-Ended |
Returns of the liquid mutual funds in the last few years:
| Period | Returns |
| 1 year | 6.92% |
| 3 years | 7.40% |
| 5 years | 8.11% |
| From the launch | 8.17% |
8. Essel Liquid Fund
Essel Liquid Fund also gives reasonable returns to low risk as well as liquidity from the money market and loan securities portfolio.
Important information about this fund is given here:
| Launch Date | 19/02/2010 |
| NAV (24 May 2018) | ₹1,934.29 |
| Plan Type | Direct |
| Ratings by Wealthbucket | 2 Star |
| AUM (Fund Size) | ₹471 |
| Riskometer | Very Low |
| Minimum SIP | Not Supported |
| Minimum SWP | ₹500 |
| Benchmark Performance | Has consistently outperformed its benchmark CRISIL Liquid since its launch. |
| Age of the fund | 9 years old |
| Expense Ratio | 0.07% |
| Exit Load | NIL |
| Type | Open-Ended |
Returns of the fund in the last few years:
| Period | Returns |
| 1 year | 6.97% |
| 3 years | 7.53% |
| 5 years | 8.26% |
| From the launch | 8.32% |
9. HSBC Cash Fund
HSBC cash fund is one of the lowest expense ratios (expense ratio) of this category and some of the liquid funds that give returns.
Important information about this fund is given here:
| Launch Date | 01/06/2004 |
| NAV (24 May 2018) | ₹1,748.759 |
| Plan Type | Direct |
| Ratings by Wealthbucket | 2 Star |
| AUM (Fund Size) | ₹3,364 |
| Riskometer | Very Low |
| Minimum SIP | Not Supported |
| Minimum SWP | ₹500 |
| Benchmark Performance | Has consistently outperformed its benchmark CRISIL Liquid since its launch. |
| Age of the fund | 15 years old |
| Expense Ratio | 0.08% |
| Exit Load | NIL |
| Type | Open-Ended |
Returns of the liquid fund returns in the last few years:
| Period | Returns |
| 1-year | 6.90% |
| 3-year | 7.36% |
| 5-year | 8.11% |
| From the launch | 8.15% |
10.Tata Money Market Fund
Tata money market fund also offers more liquidity and reasonable returns, while keeping the capital safe by investing in money market instruments issued by the highly-rated corporate sector.
Important information about this fund is given here:
| Launch Date | 22/05/2003 |
| NAV (24 May 2018) | ₹3,236.1152 |
| Plan Type | Direct |
| Ratings by Wealthbucket | 2 Star |
| AUM (Fund Size) | ₹3,367 |
| Riskometer | Very Low |
| Minimum SIP | Not Supported |
| Minimum SWP | ₹500 |
| Benchmark Performance | Has consistently outperformed its benchmark CRISIL Money Market Index since its launch. |
| Age of the fund | 16 years old |
| Expense Ratio | 0.1% |
| Exit Load | NIL |
| Type | Open-Ended |
Returns of the fund in the last few years
| Period | Returns |
| 1 year | 6.86% |
| 3 years | 7.35% |
| 5 years | 8.08% |
| From the launch | 8.22% |
How Liquid Fund Give you Better Returns than Saving Bank Accounts
Investing in Liquid Funds is a better option than investing in popular Savings Bank Account Schemes.
- Due to the good image of Savings Bank Accounts and being associated with the Institution, Indians paying tax rely more on these. However, it seems that they are no longer the most popular short-term investment plan. This is because mutual funds are increasing popularity among investors for different investment purposes.
- Your hard-earned money in Savings Bank Account gives you only 4% interest every year. However, in the past year, the best liquid funds have given an average 6-7% interest every year. Therefore, only if the returns are taken as criteria, liquid funds tend to score better than the savings bank account. If you are going to get any bonus, then invest in liquid funds and party later.
But remember, you should finally take decisions on the basis of risk, time horizon, and investment objective. Since the market has been good for the past few years and there is also the possibility of economic growth in the coming years with the announcement of the Union Budget 2018, it is more intelligent to choose liquid funds from Savings Bank Accounts.
The data provided in this article is dated 31st Dec 2018. Please visit the Wealthbucket site for the latest data.
If you want to know the Best Performing Mutual Funds India. And want to make the best profits on your money, visit our website Wealthbucket. Let us guide you to reap the benefits Debt Mutual fund, Large Cap Mutual fund or Multi-Cap Mutual fund, to achieve your objectives.
Ring us at +91 9999379929. or shoot on our email at contact@wealthbucket.in.
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