Looking for Risk-Free Investments? Opt for Liquid Funds

Are you among those investors who want to safeguard their idle money while earning tremendous returns? If yes, then liquid funds can be an excellent choice for you. Instead of putting vast sums into the bank’s savings account, you must take the best advantage of the short-term debt mutual funds. In the current high-interest scenario, it is quite essential to let your money work for you, and liquid mutual funds can do much better than your savings account. By providing returns at the rate of 8-9%, it helps in making more income and achieve the short-term or instant cash requirements. What are Liquid Funds? Liquid mutual funds are simply those debt funds which invest your money in very short-term market instruments like treasury bills, government securities and call money holding least amount of risk. These funds invest in instruments with a maturity of up to 91 days and even much less than this. The liquid scheme is least risky as well as least volatile in the category of mutual funds due to the following reasons: rn1. Liquid mutual funds mostly invest in instruments with high credit rating which means that the liquidity and credibility of these funds are very high. rn2. Unlike other funds, the NAV of liquid funds is not volatile in nature as the only change in their NAV is mostly due to the interest income that accrues. In other words, provided the short-term maturities, the instruments are not traded on the market, and they are held until the maturity period. Accordingly, the NAV is changed to the extent of interest income regularly accrued, even on the weekends. How are Liquid Mutual Funds Better Than Savings Account? The savings bank account is considered to be the safest mode of parking the surplus cash with the purpose of attaining liquidity and better returns over a short span of time. The banks provide a high degree of safety and returns in the range of 3-5%. The investors find them safe and yielding, and thus they choose it for their money. But, do you know liquid funds in India have much more than this? Yes, along with the features like liquidity, easy withdrawals and safety, they provide much high returns. With the investments being made in the instruments having a very short maturity, the schemes are not affected by the market moves at all, and thus provide security to the funds. Moreover, the schemes are highly liquid in nature, and the money can be redeemed anytime without any prior permission for the purpose of fulfilling the short-term financial goals or meet the instant cash requirements. When Should You Choose Liquid Fund? These funds are the ideal parking grounds for your money when you have surplus funds available to you, and you don’t want to block them for a long tenure. Accordingly, at times when you wish to save some money for your future instant cash requirements, then you can opt for the best liquid funds. Instead of putting your money in the savings bank account, you can use the liquid fund investments for your portfolio and make the most benefit of the market. Neither your money is blocked, nor you lose the liquidity, rather your money gets a better rate of returns making it more effluent. Hence, investments are the tools to multiply your money, and if they are used in an adequate manner, you can earn tremendous wealth out of it. The liquid funds in India are the safest form of investments for the investors who are looking for risk-free investments. They not only provide the trending benefits of the mutual fund market but let you attain short-term benefits as well. Liquid funds are the safest mode of investing money in the mutual funds. While providing higher returns, they also help in gaining liquidity of the funds for anytime withdrawal. Here’s how liquid fund plans can be a great gift for your surplus money without compromising on the risk parameters.