Who Should Consider Investing in the Liquid Funds?
We always wish to satisfy the needs of every visitor on our website. And for that, we try to provide the best investment-related tips and information that could help them in taking a wise decision. Our earlier post ‘Are Equity Funds the Right Choice for You?’, provided the information regarding equity funds to let you know whether you should opt for the same or not. Here we have tried to make you understand the concept of liquid funds, that will help you to decide whether they are the right option for you or not!
We all have a savings account in the banks which provides liquidity to our money to withdraw the cash anytime for buying amenities. But, have you ever thought that you could take the benefit of liquidity along with high returns? We all earn simple interest on our savings account balance. But when we have the option to fetch even more, then why not opt for the same?
Investments in mutual fund provide extreme benefits to the investors, but not all of us go for it because we don’t wish to lock our money. But the most efficient category of ‘Liquid Funds’ under the MF programme offers you the flexibility of investing. Instead of opening a savings account in the bank, you can invest the same in liquid funds to earn good returns. In addition, due to the flexibility, you can redeem your funds whenever required in a hassle-free manner. So, let us provide you with some specific details about this fund.
Liquid funds are open-ended schemes that invest in such securities which have maturities of up to 91 days. This includes various instruments like treasury bills, money market instruments and very short-term corporate papers. They let the investors park their monies for a few days or months and avail anytime liquidity along with returns for the holding period. The interest rates offered by this fund fluctuate as per the prevailing rates in the market. They have offered returns as high as 7.5-8% in the past years on an annualised basis. This ensures that one can earn good corpus with the same.
Should You Invest in Them?
So, let us help you in knowing whether the schemes of ‘Liquid Funds’ are the right choice for you to accomplish your investment goals. These funds are most suitable for such investors who are seeking the following benefits:
- Short-Term Investment: If you are looking for a plan to fulfil your short-term financial requirements, then this fund can help you in the best manner. The schemes under this generally make investments in instruments that have an early maturity.
- Higher Returns in a Short Span of Time: In order to earn appreciable returns to accomplish the current needs, you can avail the benefits offered by this fund. It offers various schemes that provide good earnings in the short duration.
- Easy Cash Convertibility: If you desire for attaining liquidity, the liquid fund is the best strategy for you. You can easily encash your investment and utilise the money to accomplish the instant requirements.
- Flexibility of Redeeming a Plan: The schemes are open-ended ones and do not have a lock-in period. Henceforth, one can easily redeem the funds as and when required using a simple and convenient process.
- Tax Benefits: There are certain provisions which provide tax exemptions for less than one-year investment as well. Accordingly, you can avail the tax savings as well.
In this way, the liquid funds offer several benefits to the investors and all those who wish to attain the above-mentioned advantages must invest their money in them. If you find the “Liquid Fund” suitable for you, then you can buy its schemes online using the solutions of MySIPonline. We are ready to help you in the best possible manner to make your life financially secure.
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