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5 Top Rated Liquid Mutual Funds You Can Invest In For Your Different Goals
Liquid funds as the word implies are liquid funds and are even touted a better option than savings fund as they are able to offer a partially better return than banks savings account.
Suitability of liquid funds
First of all whenever parking your investible surplus, your near and medium term financial goals are to be taken care of. Plus, in addition your risk appetite is always a major consideration. So, being a debt or fixed instrument investment investing across avenues such as commercial paper, government securities, treasury bills, etc. with a maturity of a maximum of up to 91 days.
The liquid fund serves as a good investment when you are on the hunt for the fund that is least on the interest rate risk and have a shorter term horizon. Sometimes this can be the starting point of your investment journey into mutual funds as these are lowest on risk.
Investment into equity could be initiated through initial investment in liquid funds
Investment into equities is full of risk and instead mutual funds is vouched for as it gives the investors the scope of averaging out the cost without the need for timing the market.
Nonetheless if you begin to take the mutual fund investment via the debt fund initially, you may get a hang of the markets to an extent and can easily switch to an equity fund by considering the STP or systematic transfer plan.
hey start with investing in a liquid fund and then initiate a systematic transfer plan to an equity fund. This helps them invest in equity funds in a phased manner and benefit from Rupee Cost Averaging.
Liquid fund is also a go to option for establishing Contingency funds
Contingency or emergency fund is a must for a professional or any other person who has liabilities to clear off. Creation of the same which should be nearly a good quantum of your annual expenses, experts are of the view that liquid funds serve as a good option with no risk and even high liquidity. Nonetheless, the funds for the same are asked to be put across instruments which are not tinkered with too off such as mutual funds, recurring deposits and liquid funds.
5 top rated, top performing liquid funds based on CRISIL Rating
| Liquid fund | Crisil Rating | 1-yr return in % | 3-yr return in % | 5-yr return in % |
|---|---|---|---|---|
| JM Liquid fund | 5* | 3.3 | 5.09 | 5.87 |
| Canara Robeco Direct Plan- G | 5* | 3.19 | 4.83 | 5.64 |
| Paragh Parikh Liquid fund Direct plan | 5* | 3.16 | 4.6 | |
| Quantum Liquid fund - Direct plan | 5* | 3.15 | 4.66 | 5.27 |
| Motilal Oswal Liquid fund | 5* | 3.04 |
Disclaimer:
The ratings by prominent rating agency Crisil for mutual funds cover a whole range of variables including a combination of NAV and portfolio-based attributes for evaluation. Additionally, the parameters covered are risk-adjusted returns, asset concentration, liquidity and asset quality.
Nonetheless the top ranking is never or should not be a whole sole criteria to decide on the investment. So, one should do a detailed analysis of any investment before putting their stake in the same.
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