Top Performing Liquid Funds in 1 Year

The table below shows a list of the Best Liquid Funds Based on AUM, NAV, and minimum SIP.

Introduction to Top Performing Liquid Mutual Funds in 1 Year

Aditya Birla SL Liquid Fund

Aditya Birla Sun Life Liquid Fund Direct-Growth is a Liquid mutual fund scheme from Aditya Birla Sun Life Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

Aditya Birla Sun Life Liquid Fund Direct-Growth as a Liquid fund, manages assets valued at ₹51273.51 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 5.36%. This fund has an exit load of 0.01% and an expense ratio of 0.21%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: No Equity, Debt – 88.47%, and Other – 11.53%.

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 and 8 months, having been launched on 01/01/2013.

ICICI Prudential Liquid Fund Direct Plan-Growth as a Liquid fund, manages assets valued at ₹50596.87 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 5.31%. This fund has an exit load of 0.01% and an expense ratio of 0.2%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: No Equity, Debt – 97.48%, and Other – 2.52%.

Nippon India Liquid Fund

Nippon India Liquid Fund Direct-Growth is a Liquid mutual fund scheme from Nippon India Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

Nippon India Liquid Fund Direct-Growth as a Liquid fund, manages assets valued at ₹32733.81 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 5.33%. This fund has an exit load of 0.01% and an expense ratio of 0.2%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: No Equity, Debt – 101.34%, and Other – (-)1.34%.

Axis Liquid Fund

Axis Liquid Direct Fund-Growth is a Liquid mutual fund scheme from Axis Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

Axis Liquid Direct Fund-Growth as a Liquid fund, manages assets valued at ₹28808.10 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 5.33%. This fund has an exit load of 0.01% and an expense ratio of 0.15%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: No Equity, Debt – 99.9%, and Other – 0.1%.

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 and 8 months, having been launched on 01/01/2013.

Tata Liquid Fund Direct-Growth as a Liquid fund, manages assets valued at ₹19852.61 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 5.32%. This fund has no exit load and an expense ratio of 0.21%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: No Equity, Debt – 98.08%, and Other – 1.92%.

DSP Liquidity Fund

DSP Liquidity Direct-Growth is a Liquid mutual fund scheme from DSP Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

DSP Liquidity Direct-Growth as a Liquid fund, manages assets valued at ₹18699.20 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 5.29%. This fund has an exit load of 0.01% and an expense ratio of 0.1%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: No Equity, Debt – 92.55%, and Other – 7.45%.

HSBC Liquid Fund

HSBC Liquid Fund Direct-Growth is a Liquid mutual fund scheme from HSBC Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

HSBC Liquid Fund Direct-Growth as a Liquid fund, manages assets valued at ₹17291.07 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 5.29%. This fund has an exit load of 0.01% and an expense ratio of 0.12%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: No Equity, Debt – 98.63%, and Other – 1.37%.

Bandhan Liquid Fund

Bandhan Liquid Fund Direct Plan-Growth is a Liquid mutual fund scheme from Bandhan Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

Bandhan Liquid Fund Direct Plan-Growth as a Liquid fund, manages assets valued at ₹13040.09 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 5.24%. This fund has an exit load of 0.01% and an expense ratio of 0.12%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: No Equity, Debt – 99.04%, and Other – 0.96%.

Mirae Asset Liquid Fund

Mirae Asset Liquid Fund Direct-Growth is a Liquid mutual fund scheme from Mirae Asset Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

Mirae Asset Liquid Fund Direct- Growth as a Liquid fund, manages assets valued at ₹12648.37 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 5.33%. This fund has an exit load of 0.01% and an expense ratio of 0.1%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: No Equity, Debt – 98.76%, and Other – 1.24%.

LIC MF Liquid Fund

LIC MF Liquid Fund Direct-Growth is a Liquid mutual fund scheme from LIC Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

LIC MF Liquid Fund Direct-Growth as a Liquid fund, manages assets valued at ₹10588.63 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 5.34%. This fund has an exit load of 0.01% and an expense ratio of 0.16%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: No Equity, Debt – 100.69%, and Other – (-0.69)%.

What Are Liquid Funds?

Liquid funds are a type of mutual fund primarily invested in short-term, highly liquid instruments like Treasury bills, commercial papers, and certificates of deposit. They are designed to offer high liquidity with low risk and moderate returns.

These funds are ideal for investors seeking a safe place to park surplus cash temporarily while earning a better return than a savings account. They typically offer high liquidity, allowing investors to redeem their investments quickly with minimal penalties.

Liquid funds are considered low-risk compared to other mutual funds due to their investment in high-quality, short-term securities. They are suitable for those looking for stability and quick access to their money without significant fluctuations in value.

Features Of Top Performing Liquid Funds in 1 Year

The main features of top-performing liquid funds over a year include high liquidity, strong returns, minimal credit risk, and efficient management. These characteristics ensure that investors can access their money quickly while benefiting from competitive yields and safety.

High Liquidity: Top-performing liquid funds offer quick and easy access to funds, often allowing redemption within a day or even a few hours. This ensures investors can swiftly react to financial needs or market opportunities without significant delays.

Strong Returns: These funds provide competitive returns compared to traditional savings accounts and fixed deposits, thanks to their investment in short-term, high-quality instruments. The performance is often driven by effective interest rate management and market timing.

Minimal Credit Risk: Leading liquid funds invest primarily in high-grade, short-term securities, which minimizes the risk of default. By focusing on instruments with low credit risk, these funds maintain stability and protect investor capital.

Efficient Management: Top liquid funds are managed by experienced professionals who employ strategies to optimize returns while maintaining liquidity and safety. Effective management ensures that the fund remains competitive in performance and adheres to risk management practices.

Best Performing Liquid Funds in 1 Year

The table below shows the Best-performing Liquid Funds Based on the highest to lowest expense ratio.

List of Top Performing Liquid Funds in 1 Year

The table below shows the Best Liquid Funds Based on the Highest 3Y CAGR.

Top Performing Liquid Funds in 1 Year List 

The table below shows Best Performing Liquid Funds In India Based on Exit Load, i.e., the fee that the AMC charges investors when they exit or redeem their fund units.

Factors To Consider When Investing In Top Performing Liquid Funds in 1 Year

The main factors to consider when investing in top-performing liquid funds over a year include fund performance history, expense ratios, credit quality of holdings, and redemption terms. Evaluating these aspects helps ensure that the investment aligns with financial goals and risk tolerance.

Fund Performance History: Analyze the fund’s past performance to gauge its stability and reliability. Consistent returns over various market conditions can indicate robust management and a sound investment strategy, though past performance is not a guarantee of future results.

Expense Ratios: Consider the fund’s expense ratio, which affects net returns. Lower expense ratios typically indicate more cost-effective management. High fees can erode overall returns, so choosing a fund with reasonable costs is essential for maximizing investment efficiency.

Credit Quality of Holdings: Examine the credit quality of the securities within the fund. Higher-quality, short-term instruments reduce credit risk, ensuring greater safety and stability. Funds investing in low-credit-quality securities may offer higher yields but come with increased risk.

Redemption Terms: Review the redemption terms and conditions of the fund. Check for any exit loads or penalties that might affect liquidity. Flexible and transparent redemption policies are crucial for accessing funds without incurring unexpected costs.

How To Invest In Top Performing Liquid Funds in 1 Year?

To invest in top-performing liquid funds, start by researching and selecting funds with a strong performance track record over the past year. Look for funds with consistent returns, low expense ratios, and high credit quality to ensure stability and safety.

Next, open an account with Alice Blue that offers access to liquid funds. This typically involves completing the necessary paperwork, providing identification, and depositing the initial investment amount. Ensure the platform offers easy fund management and tracking features.

Finally, invest by allocating your funds into the chosen liquid fund through your brokerage account. Regularly review the fund’s performance and adjust your investment as needed based on changing financial goals or market conditions.

Advantages Of Investing In Top Performing Liquid Funds in 1 Year

The main advantages of investing in top-performing liquid funds over a year include high liquidity, attractive returns, minimal risk, and flexibility. These benefits offer a safe, accessible, and potentially profitable investment option for short-term financial goals.

High Liquidity: Liquid funds provide quick access to your money, often within a day or less. This ease of redemption ensures you can meet urgent financial needs or capitalize on investment opportunities without significant delays.

Attractive Returns: Compared to traditional savings accounts, top-performing liquid funds typically offer higher returns due to their investment in short-term, high-quality securities. This allows you to earn better yields on your idle cash.

Minimal Risk: Investing in top-performing liquid funds involves minimal credit risk, as they primarily hold high-grade, short-term instruments. This conservative investment approach helps preserve capital while providing stable returns.

Flexibility: These funds offer the flexibility to invest and withdraw amounts as needed without stringent conditions. Their adaptable nature makes them suitable for managing short-term cash needs while benefiting from market-driven returns.

Risks Of Investing In Top Performing Liquid Funds in 1 Year

The main risks of investing in top-performing liquid funds over a year include interest rate risk, credit risk, liquidity risk, and potential tax implications. While generally low-risk, these factors can impact returns and investment stability.

Interest Rate Risk: Liquid funds are sensitive to changes in interest rates. Rising rates can lead to a decrease in the value of the fund’s holdings, potentially lowering returns. This risk is inherent as the fund’s securities adjust to market conditions.

Credit Risk: Although top-performing liquid funds invest in high-quality instruments, there is still some credit risk. If an issuer of the securities faces financial difficulties, it could impact the fund’s returns and overall stability.

Liquidity Risk: While liquid funds are designed for high liquidity, extreme market conditions could affect their ability to provide immediate access to cash. In rare cases, this could result in delays or reduced access to your invested funds.

Potential Tax Implications: Earnings from liquid funds may be subject to taxes, which can affect net returns. Depending on your tax bracket and jurisdiction, interest income may be taxed at different rates, impacting the overall profitability of your investment.

Importance of Liquid Funds

Liquid funds play a crucial role in personal finance by offering a secure and easily accessible investment option for short-term cash needs. They provide investors with a way to earn higher returns compared to traditional savings accounts, while maintaining high liquidity. This makes them ideal for managing emergency funds or temporary surpluses, ensuring that capital is readily available when needed.

Additionally, liquid funds contribute to financial flexibility and stability. They act as a buffer against market volatility and unexpected expenses, allowing investors to preserve their capital while still generating modest returns. Their low-risk nature and quick redemption options make them a valuable component of a diversified investment portfolio, supporting both financial security and growth.

How Long to Stay Invested in Liquid Mutual Funds?

The ideal duration to stay invested in liquid mutual funds largely depends on your financial goals and liquidity needs. They are best suited for short-term investments, typically ranging from a few days to a year, given their high liquidity and low risk.

For emergency funds or cash management, keeping money in liquid mutual funds for several months can offer better returns than traditional savings accounts while still ensuring quick access. However, frequent trading or very short-term holding might not optimize returns due to potential redemption fees or market fluctuations.

Tax Implications of Investing in Liquid Mutual Funds

Investing in liquid mutual funds can have specific tax implications. Interest income from these funds is typically taxed as ordinary income, which might be subject to higher tax rates depending on your income bracket and jurisdiction. This can affect overall returns.

Additionally, gains from liquid funds held for less than three years are treated as short-term capital gains, taxed at your regular income tax rate. Holding the investment longer might qualify for different tax treatments, but liquid funds are generally used for short-term investments, minimizing this advantage.

Future of Liquid Funds

The future of liquid funds looks promising as investors increasingly seek safe, short-term investment options with better returns than traditional savings accounts. Advances in financial technology and evolving market conditions are likely to enhance the efficiency and accessibility of these funds.

Moreover, as global economic uncertainty and interest rate fluctuations continue, liquid funds may gain more traction for their stability and quick liquidity. Their role in providing financial flexibility and capital preservation will likely remain crucial for both individual and institutional investors.

Top Performing Liquid Funds in 1 Year FAQs  

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.