What is so awesome about liquid funds?
Mutual Fund Classification Out of many different ways of classifying mutual funds, one way is to classify it by asset class Equity funds Debt funds Hybrid funds Gold funds Others (Fund of funds, commodity funds, real estate funds, etc.) What are liquid funds? Liquid funds fall into category of debt funds. Liquid schemes or money market schemes are variant of debt schemes which invests in very short term debt securities. These funds can only invests in securities up-to 91 days of maturity. If all these is going over your head, in simple terms liquid funds are the funds which are most liquid among all mutual funds. Reason for same being having neither early-withdraw-penalty nor lock-in-period. What is so special about these funds is that these funds have very very low risk. Practically, you cannot lose money in these funds. These funds offer you returns of about 0.02% every single day on your parked money. Liquid funds vs Savings accounts You might be t