What is the average return on a liquid fund?

Liquid funds, while not entirely immune to risks, are considered relatively safer than various other mutual fund categories. This is due to their unique characteristics and investment strategies.

The safety aspect of liquid funds stems from their focus on short-term investments, such as treasury bills, commercial papers, and other highly liquid securities. These investments have low credit risks and can be easily converted into cash, ensuring a stable return for investors.

In terms of returns, liquid funds have historically performed well, offering investors an attractive range of 7% to 9% annually. This is significantly higher than the interest rate offered by regular savings bank accounts, which typically hover around 3.5%.

The higher returns offered by liquid funds make them a preferred choice for investors seeking to grow their wealth while maintaining a degree of liquidity. They are ideal for investors who need access to their funds within a short period, making them a versatile investment option.

Additionally, liquid funds are managed by experienced professionals who have expertise in navigating the financial markets. This ensures that investors' funds are invested wisely and that they receive competitive returns.