10 Best Liquid Fund Scheme to Increase your Returns

    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,

    ParticularsFixed DepositsDebt Funds
    Invested Sum₹10 lakhs₹ 10lakhs
    Return Rate (suppose)10%10%
    Lock-in Period5 year5 year
    At the end of tenure, Fund worth ₹15,00,000₹15,00,000
    Inflation per year8%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 Date09/12/2003
    NAV₹4,282.4676
    Ratings by Wealthbucket2 Star
    AUM (Fund Size)₹21,747
    RiskometerLow
    Minimum SIP₹500
    Minimum SWPNot Supported
     Benchmark PerformanceHas consistently outperformed its benchmark CRISIL Liquid since its launch.
    Age of the fund16 years old
    Expense Ratio0.23%
    Exit LoadNIL
    TypeOpen-Ended
    Returns of the fund in the last few years:-
    PeriodReturns
    1 year6.90%
    3 year7.42%
    5 year8.14%
    From the launch8.21%

    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 TypeDirect
    Ratings by Wealthbucket2 Star
    AUM (Fund Size)₹30,233
    RiskometerVery High
    Minimum SIP₹500
    Minimum SWP₹500
     Benchmark PerformanceHas consistently outperformed its benchmark CRISIL Liquid since its launch.
    Age of the fund19 years old
    Expense Ratio0.15%
    Exit LoadNIL
    TypeOpen-Ended

    Returns of the fund in the last few years:

    PeriodReturns
    1 year6.73%
    3 years7.33%
    5 years8.08%
    From the launch8.15%

    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 Date09/10/2009
    NAV (24 May 2018)₹1,947.0198
    Plan TypeDirect
    Ratings by Wealthbucket2 Star
    AUM (Fund Size)₹24,161
    RiskometerVery Low
    Minimum SIPNot Supported
    Minimum SWP₹1,000
     Benchmark PerformanceHas consistently outperformed its benchmark CRISIL Liquid since its launch.
    Age of the fund10 years old
    Expense Ratio0.11%
    Exit LoadNIL
    TypeOpen-Ended

    Returns of the fund in the last few years:

    PeriodReturns
    1 year6.93%
    3 years7.41%
    5 years8.13%
    From the launch8.19%

    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 Date25 October 2011
    NAV (24 May 2018)₹1,715.633
    Plan TypeDirect
    Ratings by Wealthbucket2 Star
    AUM (Fund Size)₹4,541
    RiskometerVery Low
    Minimum SIPNot Supported
    Minimum SWP₹500
     Benchmark PerformanceHas consistently outperformed its benchmark CRISIL Liquid since its launch.
    Age of the fund8 8 years old
    Expense Ratio0.07%
    Exit LoadNIL
    TypeOpen-Ended

    Returns of the fund in the last few years:

    PeriodReturns
    1 year6.93%
    3 years7.55%
    5 years8.21%
    From the launch8.27%

    5. Principal Cash Management Fund 

    Here is the key information of Principal cash management fund:

    Launch DateAug 31, 2004
    NAV (24 May 2018)₹1,710.8879
    Plan TypeDirect
    Ratings by Wealthbucket2 Star
    AUM (Fund Size)₹1,271
    RiskometerVery Low
    Minimum SIPNot Supported
    Minimum SWP₹500
    Benchmark PerformanceHas consistently outperformed its benchmark CRISIL Liquid since its launch.
    Age of the fund15 years old
    Expense Ratio0.15%
    Exit LoadNIL
    TypeOpen-Ended

    Returns of the liquid fund returns in the last few years:

    PeriodReturns
    1 year6.96%
    3 years7.46%
    5 years8.71%
    From the launch8.22%

    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 TypeDirect
    Ratings by Wealthbucket2 Star
    AUM (Fund Size)₹27,290
    RiskometerVery Low
    Minimum SIPNot Supported
    Minimum SWP₹1,000
    Benchmark PerformanceHas consistently outperformed its benchmark CRISIL Money Market Index since its launch.
    Age of the fund14 years old
    Expense Ratio0.15%
    Exit LoadNIL
    TypeOpen-Ended

    Returns of the fund in the last few years:

    PeriodReturn
    1 year6.85%
    3 years7.38%
    5 years8.12%
    From the launch8.26%

    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 TypeDirect
    Ratings by Wealthbucket3 Star
    AUM (Fund Size)₹13,995
    RiskometerVery Low
    Minimum SIPNot Supported
    Minimum SWP₹500
    Benchmark PerformanceHas consistently outperformed its benchmark CRISIL Money Market Index since its launch.
    Age of the fund13-years old
    Expense Ratio0.04%
    Exit LoadNIL
    TypeOpen-Ended

    Returns of the liquid mutual funds in the last few years:

    PeriodReturns
    1 year6.92%
    3 years7.40%
    5 years8.11%
    From the launch8.17%

    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 Date19/02/2010
    NAV (24 May 2018)₹1,934.29
    Plan TypeDirect
    Ratings by Wealthbucket2 Star
    AUM (Fund Size)₹471
    RiskometerVery Low
    Minimum SIPNot Supported
    Minimum SWP₹500
    Benchmark PerformanceHas consistently outperformed its benchmark CRISIL Liquid since its launch.
    Age of the fund9 years old
    Expense Ratio0.07%
    Exit LoadNIL
    TypeOpen-Ended

    Returns of the fund  in the last few years:

    PeriodReturns
    1 year6.97%
    3 years7.53%
    5 years8.26%
    From the launch8.32%

    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 TypeDirect
    Ratings by Wealthbucket2 Star
    AUM (Fund Size)₹3,364
    RiskometerVery Low
    Minimum SIPNot Supported
    Minimum SWP₹500
    Benchmark PerformanceHas consistently outperformed its benchmark CRISIL Liquid since its launch.
    Age of the fund15 years old
    Expense Ratio0.08%
    Exit LoadNIL
    TypeOpen-Ended

    Returns of the liquid fund returns in the last few years:

    PeriodReturns
     1-year6.90%
    3-year7.36%
    5-year8.11%
    From the launch8.15%

    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 Date22/05/2003
    NAV (24 May 2018)₹3,236.1152
    Plan TypeDirect
    Ratings by Wealthbucket2 Star
    AUM (Fund Size)₹3,367
    RiskometerVery Low
    Minimum SIPNot Supported
    Minimum SWP₹500
    Benchmark PerformanceHas consistently outperformed its benchmark CRISIL Money Market Index since its launch.
    Age of the fund16 years old
    Expense Ratio0.1%
    Exit LoadNIL
    TypeOpen-Ended

    Returns of the fund in the last few years

    PeriodReturns
    1 year6.86%
    3 years7.35%
    5 years8.08%
    From the launch8.22%

    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 fundLarge 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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    About the Author:

    This article has been posted by Pulkit Jain - the founder of WealthBucket - To raise awareness about Mutual Funds Investments. WealthBucket has made investing in Mutual Funds an easy, quick and welcome process, in India. An interactive online platform providing Trustworthy and sincere services to all its clients.