Liquid

Liquid Funds utilize high-quality debt instruments for investment. These types of instruments typically have terms of less than three months. Short holding periods help maintain the fund's Net Asset Value (NAV) stability. Anytime interest rates change, it doesn't affect it. The fund manager seeks to minimize the risks related to credit and interest rates.

They accomplish this by selecting the highest-rated instruments from the most reliable issuers.

Since these funds' portfolios are highly liquid, they can promptly meet any sudden redemption requests easily. Additionally, some funds provide the option of instant withdrawal, through which investors can redeem their funds within minutes (subject to daily limits). Thus, Liquid Funds become a very appealing alternative for investors who want quick access to their money and, at the same time, do not want to give up too much in terms of returns.

Liquid Funds are ideal for investors with short-term financial goals or those seeking a safe place to park surplus funds temporarily. They are suitable for individuals who want to:

• Build or store an emergency fund
• Earn better returns than a bank savings account
• Manage short-term surplus funds from bonuses or lump-sum receipts
• Temporarily park funds before investing in long-term instruments such as equity mutual funds via Systematic Transfer Plans (STPs)
• Maintain liquidity without significant exposure to market volatility

Whether you are a salaried individual, a business owner, or a retiree, Liquid Funds can be a valuable addition to your portfolio for managing cash flow efficiently.

One of Liquid Funds' strongest selling points is its ability to provide very high liquidity while being essentially risk-free. It is essential to note that, since these funds have no lock-in period, investors can withdraw their money at any time. Most liquid funds allow withdrawals within one working day (T+1), and many now also offer instant redemption facilities for added convenience.

Liquid Funds, apart from offering liquidity, also provide higher returns than traditional savings accounts, especially when interest rates are rising. The portfolio's very short maturity period also means that it is less exposed to interest rate changes, thus a relatively safe investment. Additionally, Liquid Funds are managed by professional managers who ensure that the portfolio is diversified and has a balanced risk-return profile.