Is Liquid Fund Better Than FD?

Which is the best liquid fund?

Top 10 Liquid Mutual FundsFund NameCategoryFund Size(in Cr)LIC MF Liquid FundDebt₹7,836Mahindra Liquid FundDebt₹2,062Tata Liquid FundDebt₹15,556Axis Liquid FundDebt₹24,81712 more rows.

Is Fd better than LIC?

Fixed deposits are best for both short and medium term investments whereas life insurance plans are designed for long term investments. You can invest for a period of as low as 7 days in fixed deposits unlike a life insurance plan wherein you need to invest for at least 10 years. You can invest a minimum amount of Rs.

Can you lose money in fixed deposit?

A bank FD will not be able to generate any real returns, or even negative returns, if you consider tax and inflation. Apart from losing out on returns, there is one more loss for the investor. That is, the opportunity cost of the capital set aside in FDs.

Which SIP is best for 5 years?

Best SIP plans for 5 year investmentFund Name3-Year SIP Returns (%)5-Year SIP Returns (%)Kotak Emerging Equities Fund (Regular)6.54%9.73%INVESCO India Financial Services Fund (Regular)14.61%16.03%SBI Focused Equity Fund (Regular)12.40%12.94%Franklin Build India Fund (Regular)4.66%8.07%8 more rows•Jan 23, 2020

Can I invest lump sum in liquid funds?

Invest the lump sum in a liquid fund. Then start a Systematic Transfer Plan (STP) from the debt fund to an equity fund. Your corpus will not only earn higher returns than a savings bank account, but it will also allow systematic investment. If you have just started your career, then SIP is your thing.

Can liquid funds give negative returns?

On an average, liquid funds have delivered 0% over the past week, according to data from Value Research and many large liquid funds have actually delivered negative returns. … These are categories that normally do not deliver negative returns, even over short time periods and are considered extremely low risk.

Why should I invest in liquid funds?

Liquid funds are ideal for investors who want to park their money for short period of time. The aim of these funds is to provide higher returns than bank accounts while offering a similar level of security for the money invested.

Which investment is better than FD?

Consider this hand-picked list of Debt Mutual Fund Schemes from Money Market, Short-term and Banking & PSU Funds. By investing FD-like instruments from high quality companies, these Funds can offer potential to earn better than FD returns if you are looking for low-risk investment option.

Is it wise to invest in liquid funds?

Minimal capital Risk: liquid funds are highly rated, signifying minimum loss from credit defaults. The scheme invests in instruments with a maturity profile of 91 days or below. The very short maturity of the investments helps minimize the MTM volatility in the portfolio thus minimizing capital risk.

Which is better Rd or liquid fund?

#4: Liquidity SIP in debt funds will provide you with the option of more liquidity as compared to bank recurring deposits. As discussed earlier recurring deposit is liquid but premature withdrawal would incur a penalty with a fixed rate. … In terms of liquidity, a SIP in debt funds is a better option when compared to RD.

Can I lose money in liquid funds?

Since a liquid fund invests only in short term securities, it’s market value does not respond much when interest rates change in the market. This means that liquid funds do not have significant capital gains or losses. … In market jargon, we say that liquid funds have a very low-interest rate risk.

Is liquid funds safe now?

Although liquid funds are not entirely risk-free, however, they are low risk-low returns instruments. As they invest predominantly in debt instruments, they are subject to interest rate risk and credit risk.