Investment Objective :
To provide reasonable returns, commensurate with low risk while providing a high level of liquidity.
Liquid fund matab Zimmedari ka Khaata !
Liquid Funds (also known as Cash Funds) or Ultra Short-Term Bond Funds invest in fixed return instruments of short maturities. Their main aim is to provide a high level of safety and earn a modest return. Liquid funds are a category debt mutual funds that primarily invest in financial instruments like treasury bills, commercial papers, fixed deposits and any other form of debt securities. The most defining feature of these funds is that they are short-term investments and come with a maturity period of less than 91 days.
The process of NAV calculation for liquid funds is also unique. It is calculated for 365 days. In case of other debt funds, the calculation is based only on business days.
Another significant benefit of these funds is that they do not come with any lock-in period. You can withdraw any amount, and the withdrawal is processed within 24 working hours of application. There are also no entry and exit load applicable to these funds.
More and more investors are choosing liquid funds to invest in due to several reasons. The primary reason is that they have the lowest risk associated with their interest rates. It is due to the fact that these investments are primarily in fixed income securities, which mostly have high credit ratings, and they have an extremely short maturity period.