Best Mutual Fund For Emergency Fund

Best Mutual Fund For Emergency Fund

The table below shows the Best Mutual Fund For Emergency Funds based on AUM, NAV, and Minimum SIP.

NameAUMNAVMinimum SIP
HDFC Liquid Fund62569.004769.22100.00
ICICI Pru Liquid Fund52980.27359.350.00
SBI Liquid Fund52944.983799.2612000.00
Kotak Liquid Fund36627.654905.170.00
Axis Liquid Fund33841.392698.040.00
Aditya Birla SL Liquid Fund29764.46391.800.00
Tata Liquid Fund29639.403830.62150.00
UTI Liquid Fund26476.763979.170.00
Nippon India Liquid Fund25252.755940.68100.00
DSP Liquidity Fund16940.423469.70100.00

Content : 

Mutual Fund For Emergency Fund Meaning

A mutual fund for an emergency fund is designed to provide liquidity and safety for unexpected financial needs. These funds invest in highly liquid, low-risk assets, ensuring that investors can access their money quickly and without significant loss in value.

These funds typically invest in short-term debt instruments, such as treasury bills or commercial papers, which offer stable returns and high liquidity. This investment strategy minimizes the risk of capital loss, making it ideal for an emergency reserve.

Investing in a mutual fund for an emergency fund also offers practicality over keeping large amounts of cash in a bank savings account. These funds can provide slightly higher returns than regular savings accounts, while still maintaining quick access to funds when needed.

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Top Mutual Fund For Emergency Fund

The table below shows based on the lowest to highest expense ratio

NameExpense RatioMinimum SIP
Union Liquid Fund0.070.00
Edelweiss Liquid Fund0.08100.00
Canara Rob Liquid-Unclaimed Redemption and Dividend Plan0.080.00
ITI Liquid Fund0.09500.00
Bajaj Finserv Liquid Fund0.101000.00
TRUSTMF Liquid Fund0.101000.00
Groww Liquid Fund0.10100.00
Canara Rob Liquid Fund0.110.00
HSBC Liquid Fund0.120.00
Mirae Asset Liquid Fund0.121000.00

Best Mutual Fund For Emergency Fund

The table below shows based on the Highest 3Y CAGR.

NameCAGR 3YMinimum SIP
Quant Liquid Plan5.733000.00
Mahindra Manulife Liquid Fund5.650.00
Aditya Birla SL Liquid Fund5.650.00
Canara Rob Liquid-Unclaimed Redemption and Dividend Plan5.640.00
Baroda BNP Paribas Liquid Fund5.64500.00
Edelweiss Liquid Fund5.63100.00
Union Liquid Fund5.620.00
Bank of India Liquid Fund5.620.00
Axis Liquid Fund5.620.00

Mutual Fund For Emergency Fund

The table below shows based on exit load, i.e., the fee that the AMC charges investors when they exit or redeem their fund units.

NameAMCExit Load
Mahindra Manulife Liquid FundMahindra Manulife Investment Management Private Limited0.00
Tata Liquid FundTata Asset Management Private Limited0.00
Bank of India Liquid FundBank of India Investment Managers Private Limited0.01
Franklin India Liquid Fund-SuperFranklin Templeton Asset Management (India) Private Limited0.01
Canara Rob Liquid FundCanara Robeco Asset Management Company Limited0.01
Navi Liquid FundNavi AMC Limited0.01
PGIM India Liquid FundPGIM India Asset Management Private Limited0.01
LIC MF Liquid FundLIC Mutual Fund Asset Management Limited0.01
SBI Liquid FundSBI Funds Management Limited0.01
WOC Liquid FundWhite Oak Capital Asset Management Limited0.01

Best Mutual Fund For Emergency Fund In India

The table below shows based on Absolute 1 Year Return and AMC.

NameAMCAbsolute Returns – 1Y
Canara Rob Liquid-Unclaimed Redemption and Dividend PlanCanara Robeco Asset Management Company Limited7.42
Edelweiss Liquid FundEdelweiss Asset Management Limited7.40
Mahindra Manulife Liquid FundMahindra Manulife Investment Management Private Limited7.40
Aditya Birla SL Liquid FundAditya Birla Sun Life AMC Limited7.38
Union Liquid FundUnion Asset Management Company Pvt. Ltd.7.38
Bank of India Liquid FundBank of India Investment Managers Private Limited7.37
PGIM India Liquid FundPGIM India Asset Management Private Limited7.37
Mirae Asset Liquid FundMirae Asset Investment Managers (India) Private Limited7.36
Axis Liquid FundAxis Asset Management Company Ltd.7.36
Bandhan Liquid FundBandhan AMC Limited7.36

Who Should Invest In Mutual Fund For Emergency Fund In India?

Individuals seeking to safeguard against unforeseen financial emergencies should consider investing in a mutual fund for an emergency fund in India. This is especially suitable for those who desire immediate access to funds with minimal risk of capital loss.

Investing in these funds is particularly advantageous for individuals without substantial savings in traditional bank accounts. These funds offer better liquidity and can sometimes yield higher returns compared to regular savings accounts, making them a smart choice for managing short-term financial needs.

Furthermore, such mutual funds are ideal for freelancers, small business owners, and professionals whose income might fluctuate. They provide a financial safety net that can cover expenses during periods of reduced earnings, ensuring financial stability without the need to liquidate other investments prematurely.

How To Invest in the Best Mutual Fund For Emergency Fund?

To invest in the best mutual fund for an emergency fund, identify funds with high liquidity and low risk, such as money market or ultra-short-term debt funds. Open an account with a reputable brokerage, evaluate fund performance and fees, and invest a portion of your savings for easy accessibility.

Performance Metrics Of Mutual Fund For Emergency Fund In India

The performance metrics of a mutual fund for an emergency fund in India focus on liquidity and stability rather than high returns. Important metrics include the fund’s liquidity ratio, yield to maturity, and the average maturity of the portfolio’s securities.

Additionally, the expense ratio and the fund’s ability to maintain a stable net asset value (NAV) are crucial. These factors ensure that the fund remains cost-effective and that investors can withdraw their money without significant fluctuations in value, crucial for emergency funding purposes.

Benefits of Investing in Mutual Fund For Emergency Fund India

The main benefits of investing in a mutual fund for an emergency fund in India include high liquidity, safety of capital, and slightly higher returns compared to traditional savings accounts.

  • High Liquidity: These funds provide easy access to your money, allowing quick withdrawals without significant penalties or loss in value. This is essential in emergency situations where immediate cash is needed.
  • Safety of Capital: Mutual funds for emergency funds invest in low-risk securities, which ensures that the principal amount is largely safe from market volatility. This makes them a reliable option for storing emergency reserves.
  • Higher Returns: While the focus is on liquidity and safety, these funds typically offer better returns than regular savings accounts, making them a more profitable option for parking emergency funds.
  • Automatic Investment Plans: Many mutual funds offer systematic investment plans (SIPs) that allow you to automatically set aside a portion of your income into the emergency fund, simplifying the process of building and maintaining the fund
  • Diversification: Investing in a mutual fund provides diversification even within a conservative portfolio, spreading risk across various instruments like government securities, treasury bills, and commercial papers, enhancing the stability of your investment.

Challenges Of Investing In Mutual Fund For Emergency Fund India

The main challenges of investing in a mutual fund for an emergency fund in India include potential liquidity issues, fees, and lower returns compared to other investment types.

  • Liquidity Concerns: Although these funds are generally liquid, certain types may have restrictions or penalties for early withdrawal, which can impede immediate access to funds when needed most urgently.
  • Lower Returns: Emergency funds are primarily invested in safe, low-yield securities. As a result, the returns are often lower than those of more aggressive investment options, which might not keep pace with inflation over time.
  • Expense Ratios: Fees associated with managing these funds can vary, and higher expense ratios can significantly eat into the potential earnings from the investments, reducing the overall effectiveness of the emergency fund.
  • Interest Rate Risk: Funds holding debt securities are subject to interest rate risk. If interest rates rise, the value of existing bonds in the fund’s portfolio could decline, potentially decreasing the fund’s overall value.
  • Capital Not Fully Utilized: By focusing on liquidity and safety, funds allocated to an emergency fund might not be fully utilized in terms of growth potential. This conservative approach prioritizes readiness over returns, which may lead some investors to feel their capital is underutilized.

Introduction to Best Mutual Fund For Emergency Fund

Best Mutual Fund For Emergency Fund – AUM, NAV, and Minimum SIP.

HDFC Liquid Fund

HDFC Liquid Direct Plan-Growth is a Liquid mutual fund scheme from Hdfc Mutual Fund. This fund has been in existence for 11 years 4 m, having been launched on 01/01/2013. 

The HDFC Liquid Fund, categorized as a Liquid Fund, manages assets totaling Cr 62568.99 Cr. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 5.23%. This fund imposes an exit load of 0.0065 and has an expense ratio of 0.2. According to SEBI, it falls under the Moderately Low-risk category. The fund’s asset allocation comprises 0% equity, 100% debt, and 0% other securities. There are no investments in equity, while the entire portfolio is allocated to debt instruments.

ICICI Pru Liquid Fund

ICICI Prudential Liquid Fund Direct Plan-Growth is a Liquid mutual fund scheme from Icici Prudential Mutual Fund. This fund has been in existence for 11 years 4 m, having been launched on 01/01/2013.

The ICICI Pru Liquid Fund, categorized as a Liquid Fund, manages assets totaling 52980.27. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 5.29%. This fund imposes an exit load of 0.0065 and has an expense ratio of 0.2. According to SEBI, it falls under the Moderate risk category. The asset allocation of ICICI Prudential Liquid Fund Direct Plan-Growth includes 0% equity and 100% debt instruments. There are no investments in equity, with the entire portfolio allocated to debt securities.

SBI Liquid Fund

SBI Liquid Fund Direct Plan-Growth is a Liquid mutual fund scheme from Sbi Mutual Fund. This fund has been in existence for 11 years 4 m, having been launched on 01/01/2013. 

The SBI Liquid Fund, categorized as a Liquid Fund, manages assets totaling 52944.98. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 5.24%. This fund imposes an exit load of 0.0055 and has an expense ratio of 0.2. According to SEBI, it falls under the Moderate risk category. The fund’s asset allocation includes a portion in equity, 98.83% in debt, and 1.17% in other securities. With the majority invested in debt, it has a minor allocation to other securities.

Top Mutual Fund For Emergency Fund – Expense Ratio

Union Liquid Fund

Union Liquid Fund Direct-Growth is a Liquid mutual fund scheme from Union Mutual Fund. This fund has been in existence for 11 years 4 m, having been launched on 01/01/2013.

The Union Liquid Fund, classified as a Liquid Fund, manages assets worth 2061.08. Over the last 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 5.31%. This fund has an exit load of 0.0065 and an expense ratio of 0.07. As per SEBI, it belongs to the Moderately Low-risk category. The fund’s asset allocation comprises a certain percentage in equity, 89.92% in debt, and 10.08% in other securities. It holds a minor allocation to other securities, with the majority invested in debt.

Edelweiss Liquid Fund

Edelweiss Liquid Direct Growth is a Debt Mutual Fund Scheme launched by Edelweiss Mutual Fund. This scheme was made available to investors on 30 Apr 2008.

The Edelweiss Liquid Fund, categorized as a Liquid Fund, manages assets totaling 7329.77. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 5.36%. This fund imposes an exit load of 0.006 and has an expense ratio of 0.08. According to SEBI, it falls under the Moderately Low-risk category. The fund’s asset allocation includes 0% in equity, 100% in debt, and 0% in other securities. It does not allocate any investments to equity, with the entire portfolio allocated to debt instruments.

Canara Rob Liquid-Unclaimed Redemption and Dividend Plan

Canara Robeco Liquid Direct Plan Growth is a Debt Mutual Fund Scheme launched by Canara Robeco Mutual Fund. This scheme was made available to investors on 19 Dec 1987.

The Canara Rob Liquid-Unclaimed Redemption and Dividend Plan, classified as a Liquid Fund, manages assets totaling 3648.76. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 5.15%. This fund imposes an exit load of 0.007 and has an expense ratio of 0.08. As per SEBI, it falls under the Moderately Low-risk category. The fund’s asset allocation comprises a certain percentage in equity, 99.76% in debt, and 0.24% in other securities. It holds a minor allocation to other securities, with the majority invested in debt.

Best Mutual Fund For Emergency Fund – Highest 3Y CAGR

Quant Liquid Plan

Quantum Liquid Fund Direct Growth is a Debt Mutual Fund Scheme launched by Quantum Mutual Fund. This scheme was made available to investors on 19 Sep 2005.

The Quant Liquid Plan, categorized as a Liquid Fund, manages assets worth ₹2015.68. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 5.78%. This fund imposes an exit load of 0.007 and has an expense ratio of 0.29. According to SEBI, it falls under the Moderately Low-risk category. The fund’s asset allocation involves a certain percentage in equity, 98.5% in debt, and 1.4% in other securities. Predominantly invested in debt, it maintains a small allocation to other securities.

Mahindra Manulife Liquid Fund

Mahindra Manulife Liquid Fund Direct-Growth is a Liquid mutual fund scheme from Mahindra Manulife Mutual Fund. This fund has been in existence for 7 years 9 m, having been launched on 04/07/2016. 

The Mahindra Manulife Liquid Fund, classified as a Liquid Fund, manages assets worth ₹1228.99. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 5.36%. This fund imposes an exit load of 0.0045 and has an expense ratio of 0.15. As per SEBI, it falls under the Moderately Low-risk category. The fund’s asset allocation includes a portion in equity, 94.37% in debt, and 5.63% in other securities. With the majority invested in debt, it maintains a moderate allocation to other securities.

Aditya Birla SL Liquid Fund

Aditya Birla Sun Life Liquid Fund Direct Growth is a Debt Mutual Fund Scheme launched by Aditya Birla Sun Life Mutual Fund. This scheme was made available to investors on 23 Dec 1994. 

The Aditya Birla SL Liquid Fund, categorized as a Liquid Fund, manages assets worth ₹29764.46. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 5.35%. This fund imposes an exit load of 0.006 and has an expense ratio of 0.21. According to SEBI, it falls under the Moderate risk category. The fund’s asset allocation comprises 0% in equity, 100% in debt, and 0% in other securities. It does not allocate any investments to equity, with the entire portfolio allocated to debt instruments.

Mutual Fund For Emergency Fund – Exit Load and AMC

Tata Liquid Fund

Tata Liquid Fund Direct-Growth is a Liquid mutual fund scheme from Tata Mutual Fund. This fund has been in existence for 11 years 4 m, having been launched on 01/01/2013. 

The Tata Liquid Fund, classified under the Liquid Fund category, manages assets totaling ₹29639.40. Over the past five years, it has achieved a Compound Annual Growth Rate (CAGR) of 5.30%. This fund imposes an exit load of 0.0045 and has an expense ratio of 0.21. As per SEBI, it falls under the Moderately Low-risk category. The fund’s asset allocation includes a certain percentage in equity, 92.66% in debt, and 7.34% in other securities. Predominantly invested in debt, it maintains a minor allocation to other securities.

Bank of India Liquid Fund

Bank of India Liquid Fund Direct-Growth is a Liquid mutual fund scheme from Bank Of India Mutual Fund. This fund has been in existence for 11 years 4 m, having been launched on 01/01/2013.

The Bank of India Liquid Fund, categorized as a Liquid Fund, manages assets worth ₹1322.32. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 5.25%. This fund imposes an exit load of 0.005 and has an expense ratio of 0.12. According to SEBI, it falls under the Moderately Low-risk category. The fund’s asset allocation comprises a portion in equity, 97.98% in debt, and 2.02% in other securities. With the majority invested in debt, it maintains a minor allocation to other securities.

Franklin India Liquid Fund-Super

Franklin India Liquid Fund Super Institutional Plan Direct-Growth is a Liquid mutual fund scheme from Franklin Templeton Mutual Fund. This fund has been in existence for 11 years 4 m, having been launched on 01/01/2013.

The Franklin India Liquid Fund-Super, categorized as a Liquid Fund, manages assets worth ₹2336.92. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 5.33%. This fund imposes an exit load of 0.005 and has an expense ratio of 0.13. According to SEBI, it falls under the Moderately Low-risk category. The fund’s asset allocation includes 0% in equity and 100% in debt. It does not allocate any investments to equity, with the entire portfolio allocated to debt instruments.

Best Mutual Fund For Emergency Fund In India – 1 Year Return and AMC.

Union Liquid Fund

Union Liquid Fund Direct-Growth is a Liquid mutual fund scheme from Union Mutual Fund. This fund has been in existence for 11 years 4 m, having been launched on 01/01/2013. 

The Union Liquid Fund, categorized under the Liquid Fund category, manages assets totaling ₹2061.08. Over the past five years, it has achieved a Compound Annual Growth Rate (CAGR) of 5.31%. This fund imposes an exit load of 0.0065 and has an expense ratio of 0.07. According to SEBI, it falls under the Moderately Low-risk category. The fund’s asset allocation involves a certain percentage in equity, 89.92% in debt, and 10.08% in other securities. With the majority invested in debt, it maintains a significant allocation to other securities.

Bank of India Liquid Fund

Bank of India Liquid Fund Direct-Growth is a Liquid mutual fund scheme from Bank Of India Mutual Fund. This fund has been in existence for 11 years 4 m, having been launched on 01/01/2013. 

The Bank of India Liquid Fund, categorized as a Liquid Fund, manages assets totaling ₹1322.32. Over the past five years, it has achieved a Compound Annual Growth Rate (CAGR) of 5.25%. This fund imposes an exit load of 0.005 and has an expense ratio of 0.12. According to SEBI, it falls under the Moderately Low-risk category. The fund’s asset allocation includes a portion in equity, 97.98% in debt, and 2.02% in other securities. Predominantly invested in debt, it maintains a minor allocation to other securities.

PGIM India Liquid Fund

PGIM India Liquid Fund Direct Plan-Growth is a Liquid mutual fund scheme from Pgim India Mutual Fund. This fund has been in existence for 11 years 4 m, having been launched on 01/01/2013. 

The PGIM India Liquid Fund, classified as a Liquid Fund, manages assets totaling ₹303.84. Over the past five years, it has achieved a Compound Annual Growth Rate (CAGR) of 5.33%. This fund imposes an exit load of 0.0055 and has an expense ratio of 0.13. According to SEBI, it falls under the Moderately Low-risk category. The fund’s asset allocation comprises 0% in equity, 100% in debt, and 0% in other securities. It does not allocate any investments to equity, with the entire portfolio allocated to debt instruments.

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Best Mutual Fund For Emergency Fund In India – FAQ

Which are the Best Mutual Fund For Emergency Fund?

Best Mutual Fund For Emergency Fund In India #1: HDFC Liquid Fund

Best Mutual Fund For Emergency Fund In India #2: ICICI Pru Liquid Fund

Best Mutual Fund For Emergency Fund In India #3: SBI Liquid Fund

Best Best Mutual Fund For Emergency Fund In India #4: Kotak Liquid Fund

Best Mutual Fund For Emergency Fund In India #5: Axis Liquid Fund

These funds are listed based on the Highest AUM.

What are the Top Mutual Fund For Emergency Funds?

Based on 1 Year Return, The top mutual funds for emergency funds include the Canara Rob Liquid-Unclaimed Redemption and Dividend Plan, Edelweiss Liquid Fund, Mahindra Manulife Liquid Fund, Aditya Birla SL Liquid Fund, and Union Liquid Fund.

Can I Invest In a Mutual Fund For Emergency Fund India

Yes, you can invest in a mutual fund for an emergency fund in India. Choose funds that prioritize liquidity and safety, such as liquid funds or ultra-short-term debt funds, for easy access and low risk.

Is It Good To Invest In Mutual Fund For Emergency Fund India?

Yes, investing in a mutual fund for an emergency fund in India is beneficial. It offers quick liquidity, safety of capital, and better returns compared to traditional savings, making it a practical choice for emergency savings.

How To Invest in the Best Mutual Fund For Emergency Fund?

To invest in the best mutual fund for an emergency fund, open an account with Alice Blue, a registered broker. Research and select highly liquid, low-risk mutual funds, and allocate funds to ensure easy access when needed.

Disclaimer: The above article is written for educational purposes, and the companies’ data mentioned in the article may change with respect to time The securities quoted are exemplary and are not recommendatory.

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