Debt: Liquid

What is it?

Liquid debt funds invest in debt & money market instruments with a maturity of up to 91 days.

Objective

Providing capital protection and liquidity to investors is the core objective of liquid funds. The fund's primary aim is liquidity and safety, so they provide lower returns.

Suitability and opinion

These funds are ideal for investors with idle cash sitting in their bank accounts and looking for a secure option to park their money. We believe this category is the best option to park excess funds for 3 to 12 months. But don't forget that these funds aim to generate higher returns compared to savings accounts. These funds can help in short-term capital preservation but can't be used for long-term wealth creation.