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Difference between revisions of "Liquid Mutual Fund Schemes"
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{{Alphabets}} | {{Alphabets}} | ||
| − | Liquid mutual funds are | + | Liquid mutual funds are type of [[Debt Mutual Funds|debt mutual funds]]. |
| − | These are | + | These are good tools to when the investment horizon ranges from few days to less than a year. |
| − | Retail investors can use these schemes to make a lumpsum investment and then do a [[Systematic Transfer Plan]] to a chosen targeted equity scheme. | + | These are often the chosen instruments to invest by corporate companies to temporarily park their money. |
| + | |||
| + | Retail investors too can use these schemes to hold money for few days and get slightly better returns compared to Bank savings account or fixed deposits. | ||
| + | |||
| + | Further, these can be used a temporary schemes to park funds so as to make a lumpsum investment and then do a [[Systematic Transfer Plan]] to a chosen targeted equity scheme. | ||
==Liquid scheme selection== | ==Liquid scheme selection== | ||
| − | + | If I am a retail investor and if my sole intention of using funds is to park money for few days, it would be better to use a liquid fund scheme from an AMC that is hardly use for my other financial goals. | |
| − | + | For example, If I am already invested in other schemes of DSPBR, ICICI Pru, Franklin Templeton etc., I will avoid them for liquid funds. | |
| − | + | However, if I invest in liquid funds solely for channeling the money to target equity schemes using the Switch method or the STP method, I have to invariably select the liquid scheme of the same fund house in which I wish to invest in the equity scheme. | |
| − | + | Returns from most liquid funds are similar because of the similarity in the underlying assets. | |
| − | + | As a security measure, prefer liquid funds that have good AUM, preferably Rs. 1000 crore or over. | |
| + | In some cases, Liquid, Treasury and [[Ultra Short Term Mutual Fund Schemes|Ultra-short term funds]] or even some [[Short-term Debt Mutual Fund Schemes|short term funds]] have the same lock-in. | ||
| + | |||
| + | In such a case, it is important that you pick the scheme that is right for your holding period. | ||
| + | ==Examples of some good liquid schemes== | ||
That said, my Liquid fund picks are: | That said, my Liquid fund picks are: | ||
| − | Indiabulls Liquid Fund | + | #Indiabulls Liquid Fund |
| − | + | #JM High Liquidity Fund | |
| − | JM High Liquidity Fund | + | #Birla Sun Life Floating Rate Fund - Short Term Plan |
| − | |||
| − | Birla Sun Life Floating Rate Fund - Short Term Plan | ||
Peerless Liquid Fund | Peerless Liquid Fund | ||
As usual, go for Direct Plan - Growth Option | As usual, go for Direct Plan - Growth Option | ||
| − | ==Liquid Fund | + | ==Liquid Fund Redemption== |
Question: Generally, when I give a redemption request today, when will get the funds in my bank account? | Question: Generally, when I give a redemption request today, when will get the funds in my bank account? | ||
| Line 37: | Line 43: | ||
The funds will usually be sent by NEFT and hence the next day morning, when the redemption is processed, we would get an email with details about the NEFT transfer. | The funds will usually be sent by NEFT and hence the next day morning, when the redemption is processed, we would get an email with details about the NEFT transfer. | ||
| − | The process is same irrespective of offline or online | + | The process is same irrespective of offline or online transaction and irrespective of where it is given i.e MyCAMS, KarvyMFS, Mutual fund website, MF Utilities or distributor websites (such as ICICIDirect) |
| + | ==Related Lessons== | ||
| + | *[[Balanced Funds]] | ||
| + | *[[Capital Protection-Oriented Funds]] | ||
| + | *[[Arbitrage Mutual Fund Schemes]] | ||
| + | *[[Dynamic Bond Funds]] | ||
| + | *[[Monthly Income Plans]] | ||
| + | *[[Gilt Mutual Funds]] | ||
[[Category:Mutual Funds]] | [[Category:Mutual Funds]] | ||
| + | {{Alphabets}}}} | ||
Revision as of 19:35, 2 August 2017
| Home | Personal Finance | Mutual Funds | Equity |
Liquid mutual funds are type of debt mutual funds.
These are good tools to when the investment horizon ranges from few days to less than a year.
These are often the chosen instruments to invest by corporate companies to temporarily park their money.
Retail investors too can use these schemes to hold money for few days and get slightly better returns compared to Bank savings account or fixed deposits.
Further, these can be used a temporary schemes to park funds so as to make a lumpsum investment and then do a Systematic Transfer Plan to a chosen targeted equity scheme.
Contents
Liquid scheme selection
If I am a retail investor and if my sole intention of using funds is to park money for few days, it would be better to use a liquid fund scheme from an AMC that is hardly use for my other financial goals.
For example, If I am already invested in other schemes of DSPBR, ICICI Pru, Franklin Templeton etc., I will avoid them for liquid funds.
However, if I invest in liquid funds solely for channeling the money to target equity schemes using the Switch method or the STP method, I have to invariably select the liquid scheme of the same fund house in which I wish to invest in the equity scheme.
Returns from most liquid funds are similar because of the similarity in the underlying assets.
As a security measure, prefer liquid funds that have good AUM, preferably Rs. 1000 crore or over.
In some cases, Liquid, Treasury and Ultra-short term funds or even some short term funds have the same lock-in.
In such a case, it is important that you pick the scheme that is right for your holding period.
Examples of some good liquid schemes
That said, my Liquid fund picks are:
- Indiabulls Liquid Fund
- JM High Liquidity Fund
- Birla Sun Life Floating Rate Fund - Short Term Plan
Peerless Liquid Fund
As usual, go for Direct Plan - Growth Option
Liquid Fund Redemption
Question: Generally, when I give a redemption request today, when will get the funds in my bank account?
Liquid funds are used for investing for one or few days and hence provide high liquidity.
If the investor gives a redemption request before the cut-off time (usuall 1 PM Noon) of the transaction day, he is likely to get the funds on T+1 day i.e on the next bank working day.
The funds will usually be sent by NEFT and hence the next day morning, when the redemption is processed, we would get an email with details about the NEFT transfer.
The process is same irrespective of offline or online transaction and irrespective of where it is given i.e MyCAMS, KarvyMFS, Mutual fund website, MF Utilities or distributor websites (such as ICICIDirect)
Related Lessons
- Balanced Funds
- Capital Protection-Oriented Funds
- Arbitrage Mutual Fund Schemes
- Dynamic Bond Funds
- Monthly Income Plans
- Gilt Mutual Funds
| Home | Personal Finance | Mutual Funds | Equity |