Looking for a low-risk way to park your surplus cash? Liquid funds are debt mutual funds designed for investors who want quick access to money with better returns than a savings account. They invest in high-quality short-term money market instruments like treasury bills, commercial papers, and certificates of deposit with maturities up to 91 days.

1. Low-Risk Investment Option
   Liquid funds invest in short-term, high-quality debt instruments, making them a safe choice for capital preservation with stable returns.
2. Minimal Impact of Interest Rate Changes
   Due to their short maturity profile, liquid funds remain relatively stable across changing interest rate cycles, unlike long-term debt funds.
3. High Flexibility
   Investors can stay invested for any duration, with a small exit load applicable only if redeemed within seven days.
4. Quick and Easy Liquidity
   Redemption requests are usually processed within one business day, and some liquid funds even offer instant withdrawals.
5. Strong Credit Quality
   Investments are made in highly liquid securities with a low risk of default, ensuring reliability and safety.

1. Short-Term Investment: Ideal for durations from a few days to a few months.
2. High Liquidity: Easy redemption, often within 24 hours.
3. Low Risk: Invests in safe, high-rated debt instruments.
4. Flexible: No minimum lock-in; suitable for small or large investments.

• Safe and secure investment.
• Quick access to funds during emergencies.
• Higher returns than a standard savings account.
• No fixed lock-in; invest or redeem anytime.

1. Returns fluctuate with interest rates.
2. Minimal inflation-beating potential.
3. Short-term exit loads may apply in some funds.

Short-term gains (less than 3 years): Taxed as per income slab.

Long-term gains (over 3 years): 20% tax with indexation.

Dividends are taxable in the investor's hands.