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Liquid Mutual Fund Schemes
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Liquid mutual funds are good investment tools when the investment horizon is for one or few days.
These are often the chosen instruments to invest by corporates to temporarily park their money.
Retail investors can use these schemes to make a lumpsum investment and then do a Systematic Transfer Plan to a chosen targeted equity scheme.
Liquid scheme selection
Being a retail investor, I generally prefer a liquid fund from an AMC that I hardly use for my other financial goals.
Because of this, I will avoid DSPBR, ICICI Pru, Franklin Templeton etc.
Further, returns from most liquid funds are close because of the similarity in the underlying assets.
Another important consideration is you need to be sure about your holding period.
Liquid, Treasury and Ultra-short term funds almost have the same lockin and returns depending on the AMC.
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