Investing in Liquid Funds: How Much Will You Gain in 15 Days or a Year?
When it comes to short-term investments, liquid funds offer a convenient and flexible option. These funds are designed to provide easy access to capital while offering relatively higher returns compared to traditional savings accounts. Investors often wonder about the potential returns they can expect from these short-term investments. In this article, we will explore the returns on liquid funds when invested for 15 days and a year, particularly focusing on the Nippon India Liquid Fund.
Understanding Liquid Funds and Returns
Liquid funds are mutual funds that invest in short-term debt instruments, such as commercial papers, treasury bills, and certificates of deposit. These funds are known for their liquidity and low credit risk. However, the returns on liquid funds are typically lower compared to equity mutual funds but are still higher than those of savings accounts.
To give you a clearer picture, we will compare the returns on liquid funds with those from fixed deposits (FDs) and regular savings accounts. According to recent data, the return on a 1-month investment in the Nippon India Liquid Fund is 0.28%. If you invest 1 lakh (100,000 INR) for 15 days, the estimated return would be around 130 INR.
The Return on a Short-Term Investment in Liquid Funds
Let's delve deeper into the returns on a 15-day and 1-year investment in the Nippon India Liquid Fund:
15-Day Investment
For a 15-day investment, the return on 1 lakh (100,000 INR) in the Nippon India Liquid Fund would be approximately 130 INR. This is significantly higher than the returns you would get from a regular savings account or a fixed deposit with a similar maturity period. However, it is essential to note that the returns can fluctuate and are subject to market conditions.
1-Year Investment
If you are willing to keep your investment for a longer term, say one year, the return on 1 lakh in the Nippon India Liquid Fund would be around 3,288 INR. While this might seem less impressive compared to the returns from equity funds, it is still a considerable amount and ensures better returns than traditional savings accounts or fixed deposits.
Introduction to Tarrakki Zyaada and its Sweep-In Facility
For those seeking greater convenience and flexibility, Tarrakki has introduced the Tarrakki Zyaada product, which offers a unique sweep-in facility. This product allows you to invest in the Nippon India Liquid Fund and provides an investment-linked debit card. The minimum investment starts at 100 INR, and there is an exit load only if you redeem your investment before 7 days.
Key Benefits of Tarrakki Zyaada
Flexibility and Convenience: Withdraw from your nearest ATM while remaining invested. Potentially Higher Returns: Earn potentially higher returns on your investment than fixed deposits and savings accounts. Instant Redemption: Redeem the amount instantly when needed.How Does the Sweep-In Facility Work?
The sweep-in facility offered by Tarrakki Zyaada provides an automated way to invest and link your savings with the Nippon India Liquid Fund. This facility ensures that whenever there is idle cash in your regular checking account, it is swept into the Nippon India Liquid Fund, and vice versa. This automatic transfer system helps you earn higher returns on your idle cash without much effort.
Conclusion
In conclusion, while the returns on liquid funds like the Nippon India Liquid Fund may seem modest for short-term investments, they still offer better returns than traditional savings accounts or fixed deposits. The sweep-in facility provided by Tarrakki through the Tarrakki Zyaada product adds an extra layer of convenience and flexibility to your investment. Whether you are looking for short-term liquidity or a longer-term investment, liquid funds can be a valuable addition to your investment portfolio.