A debt fund investing only in instruments maturing within 91 days, offering near-instant redemption and returns better than a savings account.
Liquid funds are restricted to money market instruments with residual maturity ≤ 91 days — T-Bills, commercial paper, certificates of deposit, and short-dated bonds. They are the lowest-risk mutual fund category and allow redemption credited within one business day.
A liquid fund is where you park your emergency fund or idle cash. It earns more than a savings account (typically 6–7% vs 3–4%), redeems within one business day, and carries very low risk. Think of it as a smart holding spot for money you'll need within a few months.
Invests only in instruments with ≤91 days to maturity — minimises interest rate sensitivity.
Redemption requests placed before the cut-off are credited the next business day; some platforms offer instant redemption up to ₹50,000.
Returns track prevailing short-term interest rates (repo rate + spread).
Most liquid funds charge no exit load after 7 days; a small graded exit load applies for very early redemptions.