liquid funds top5 and its deatial in india, chat gpt
most used liquid fund in india, as alternative of saving bank account? provide 5 reason why? can we withdraw money in 3days, what about expense ration and exitload on those?
ChatGPT said:
Liquid funds are mutual funds that invest in short-term debt instruments, offering higher liquidity and potentially better returns compared to traditional savings accounts.
Top Liquid Funds in India:
Here are some of the most utilized liquid funds in India:
Aditya Birla Sun Life Liquid Fund Direct Growth
This fund has provided annualized returns of 6.51% over the past three years and 5.45% over the last five years. It requires a minimum lump sum investment of ₹500 and a SIP investment of ₹100.
Mahindra Manulife Liquid Fund Direct Growth
Offering annualized returns of 6.51% over three years and 5.46% over five years, this fund has an AUM of ₹1,016 crore and a minimum investment amount of ₹1,000.
Edelweiss Liquid Direct Growth
This fund has achieved annualized returns of 6.48% over three years and 5.46% over five years, with a minimum investment requirement of ₹100.
PGIM India Liquid Fund Direct Plan Growth
With annualized returns of 6.48% over three years and 5.43% over five years, this fund requires a minimum lump sum investment of ₹5,000 and a SIP of ₹1,000.
Union Liquid Fund Direct Growth
This fund offers annualized returns of 6.48% over three years and 5.44% over five years, with a minimum investment amount of ₹5,000.
Reasons to Consider Liquid Funds as Alternatives to Savings Accounts:
Higher Returns: Liquid funds typically offer returns ranging from 5% to 7%, which is higher than the 3% to 4% interest provided by most savings accounts.
Liquidity: Investors can redeem their investments in liquid funds at any time without penalties, similar to withdrawing from a savings account.
Low Risk: Liquid funds invest in high-credit-quality, short-term instruments, making them relatively low-risk compared to other mutual fund categories.
No Lock-in Period: Unlike fixed deposits, liquid funds do not have a lock-in period, providing flexibility for investors to access their funds as needed.
Minimal Exit Loads: While some liquid funds may charge minimal exit loads for redemptions within the first few days, these charges are generally negligible and often waived after a short period.
Withdrawal Timeline:
Redemptions from liquid funds are typically processed within 1 to 2 business days, allowing investors to access their funds promptly.
Expense Ratio and Exit Load:
Expense Ratio: Liquid funds usually have low expense ratios, often ranging between 0.1% to 0.3%, which means a larger portion of the returns is passed on to investors.
Exit Load: Some liquid funds may impose a minimal exit load if redeemed within the first 7 days, with charges decreasing each day. For instance, a fee ranging from 0.0070% to 0.0045% may be charged if the investor redeems funds between the 1st day and 6th day of investment, while no exit load fee is charged from the 7th day onwards.
Conclusion:
Liquid funds serve as a viable alternative to savings accounts for individuals seeking higher returns with minimal risk and high liquidity. However, it's essential to review specific fund details, including expense ratios and exit load structures, before investing.