Finance And Investment

  When considering investment strategies to build a ₹1 crore portfolio, liquid mutual funds are often overlooked despite their potential benefits. These funds primarily invest in short-term debt instruments and offer liquidity, low risk, and moderate returns, appealing to investors seeking to park surplus funds temporarily or maintain optimum liquidity in their investment portfolio. While not typically associated with large-scale wealth creation, with strategic planning, liquid mutual funds can play a significant role in achieving substantial financial goals. Understanding Liquid Mutual Funds Liquid mutual funds are a type of debt mutual fund characterized by their investments in very short-term market instruments, such as treasury bills and commercial paper. These funds have a maturity period of up to 91 days, ensuring high liquidity and low risk. By investing in diversified money market instruments, these funds aim to provide decent returns with minimum risk while maintaining li...

  Liquid mutual funds are a subset of debt mutual funds that primarily invest in short-term money market instruments. These instruments include treasury bills, commercial papers, bank certificates of deposit, and other debt securities with a residual maturity of up to 91 days. Liquid mutual funds are designed to provide investors with higher returns compared to traditional savings accounts while maintaining easy access to the invested funds. One of the primary features of liquid mutual funds is the high level of liquidity. Investors can redeem their investments within a very short period, usually within one business day. This makes liquid mutual funds an attractive option for those who want to park surplus funds for short durations without compromising on liquidity. Moreover, these funds usually offer better returns than savings accounts. For instance, if a liquid mutual fund offers an annualized return of 6% and you invest ₹10,00,000, you can expect to earn approximately ₹60,000 ...