Liquid funds, a type of mutual funds which invest in different money market instruments. The withdrawals from these funds are processed within 24 hours and that's why these are regarded as liquid assets. The fund manager gets flexibility to meet immediate redemption requests.
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Liquid funds are class of mutual funds which invest in Money market instruments like treasury bills, commercial paper, certificate of deposits, and term deposits most of these assets have 3 months to 13 months of maturity period which in turn gives fund manager flexibility to meet immediate redemption requests.
Liquid name comes from the fact that withdrawals from these funds are processed within 24 hours hence its quite a liquid asset.
Top liquid funds in India as per Crisil are as follow
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Liquid funds are better than savings account for following reasons
*There is no exit load
For more details read my post on Liquid Funds versus Savings account
With recent changes there are not much difference in how tax treatment of FDs and Liquid funds
Key factors to look at while chosing a liquid fund are as follow
Liquid funds investments are best to park money which you require almost immediately, so my first suggestion will be that move all your cash holdings and savings account holding to liquid funds, you can also move part of FDs also to liquid funds, chose dividend re-investment option if you come under tax 30 % tax bracket.
Fixed Deposit (FD) are saving tools offered by banks to deposit lump sum amount for a fixed period of time on a higher interest rate than saving accounts. Mutual funds are investment products which pool money from numerous small investors to create a fund.
The best investment plans in India for a year are to invest in fixed deposits, short-term funds, and ultra-short-term funds. These are less risky and produce relatively higher returns than banks.
Equity and mutual funds are perfect if you want to invest in companies while seeing your money grow in a short period. Moreover, the chances of compounding your investments are higher. But the risk associated is equally greater considering the growth of companies and their performance in offering returns. But then keeping money in the bank is the safest way to keep your earnings. But then, due to inflation and low returns on interest, that value of the money kept might be cut down drastically.
Fincash is a yet another online investing platform that was started in 2016 or you can call it a fintech startup. Having raised funding, it has grown fast to give tough competition to other market players.
Zerodha as well as Groww, both allow investors to invest in Mutual funds. Groww does not charge any Account opening fees or Annual maintenance Charges but Zerodha charges Rs 200 for Account opening and Rs 300 for AMC. This makes Groww a cheaper and better option when it comes to investing in mutual funds.
FD vs Mutual Fund vs Real Estate Investment has its advantages in terms of how much you invest and your investing period. Longer the period, higher the returns.
ETFs (Exchange Traded Funds) and Mutual Funds are similar investment vehicles that provide the investors various features. Both have their benefits and shortcomings. ETFs are a good option for passive investors who want to invest in a particular Index or Sector without much rebalancing. On the other hand, Mutual Funds are a better option for active investors who are more active with their investments. One can switch between funds according to their current strategies.
ETFs (Exchange Traded Funds) & Mutual Funds are investment avenues that are managed by a Fund manager and allow Retail investors to invest in them. ETFs are listed on Stock Exchanges, and Mutual Funds are not. Usually, ETFs track an Index or sector whereas Mutual Funds offer a much more variety of Funds from which an investor can choose from. Both of these investment vehicles have their own merits and demerits. One should evaluate their risk profile and goals and choose one of them either. Find out which of these is the better option.
No, a Demat account is not required for investing in mutual funds in India. However, having a demat account can be beneficial for some investors.
A KRA is mandated to collect and maintain KYC records of investors on behalf of financial market participants registered with SEBI. Computer Age Management System (CAMS) is a registered entity with the SEBI was setup in 1993 as a registrar to Mutual Fund companies and now serves almost close to 60 percent of the industry. Foreign Account Tax Compliance Act is an agreement between India and United states to achieve greater tax compliance between both countries.