Liquidity is a crucial part of one’s personal finances. Life can throw unexpected curveballs like a sudden upsurge in expenses, disruption in cash flows, or unexpected outflows any time. You have got to hit them out of the park by already keeping liquidity margin aside. And different people have different ways of doing the same. Some of them like to keep their money in a savings account for liquidity as they feel it is a good way to keep cash handy always. Undoubtedly, savings accounts normally offer 4%-5% p.a. interest on savings, but do you think savings accounts and fixed deposits are the only ways of maintaining liquidity? Let us tell you No! There is a better way of managing liquidity, i.e., through liquid mutual funds. Liquid mutual funds are debt funds with an investment objective of providing investors with an opportunity to earn returns through investments in debt & money market securities such as treasury bills, certificate of deposits, and commercial papers, without even compromising the liquidity.
To assure high degree of liquidity and minimized volatility, liquid funds tend to invest in securities that possess residual maturity of less than or equal to 91 days. There are several liquid mutual funds available nowadays that allow the redemption of your money the very same day when required.
MySIPonline would like to recommend you some of the top performing liquid funds that can help you stay prepared with an umbrella for any rainy day situation.
We would like to enrich you with the benefits of parking your surplus in liquid mutual funds. The biggest one is the low risk which we all seek. These funds are least risky because they invest in quality papers and also their Net Asset Value does not vary that much as of the equity funds. Another benefit is that these funds do not have any lock-in period which means you can invest anytime and withdraw anytime. Apart from this, you do not have to pay any entry or exit load in case of most of the liquid funds. The best thing is that these funds let you cherish higher returns than that of savings accounts or fixed deposits.
So, invest in liquid funds if you want to amass rainy day fund for any kind of unexpected situation or uncertainties. Investing will become easy, once you start doing so through MySIPonline.