5 reasons to invest in liquid funds
Till now there is a belief among the investors that only banks allow the facility of anytime withdrawal and deposit. And with the introduction of ATMs, debit and credit cards the clients need not go to the banks even. So, the clients prefer to keep their money in the banks for the ease of access even though they do not get any major rate of return from it.
Mutual funds are an investment option for the clients which enhances the chances of money growth at the same time enabling them to have a secured and quick process for multiplying their money. But, among all the schemes offered by the industry liquid funds are the most popular and frequently traded plan. One must think that why only liquid fund is being focused here? Liquid fund as the name suggests inseminates the feature of giving the clients an ease of anytime withdrawal and also provides the best possible returns to the clients. Basically, a liquid plan allows the clients to invest their money in mutual funds for a relatively shorter span of time. This scheme allows the clients to generate wealth and make the best possible use of money while returning a copious amount to them. Here are a few points as to why one should invest in mutual funds.
- Ease of handling risk: The investors putting their money in liquid funds do not have to worry about the risk profiling as their money is not put in equity. The liquid funds tend to reinvest the clients money in the money market instruments that are not affected by the market fluctuations at all. The money market instruments include government and corporate bonds, securities, certificate of deposits, etc. The clients need not worry about the safety of their investments as their money is securely invested in non-equity avenues. For example, the clients can invest in Kotak Treasury Advantage Fund.
- No bulk investment is required: Although liquid fund is a short-term investment mechanism but does not require the client to put in a bulk of money. The clients can enjoy the freedom of investing with the help of SIP even in liquid funds. It reduces the burden on the clients and allows them invest little by little monthly in the scheme. However, it is for a short span of time say, 3-6 months, the clients can reinvest their money again in the scheme example, ICICI Prudential Savings Fund.
- Time constraint nullified: With the introduction of online mutual fund investing mechanism the clients have the liberty to invest through the online method which allows the clients to make the best possible use of their money sitting in their own comfort zone. There are a lot of clients who either due to their busy schedule or due to their family responsibilities have time constraints. But, now the time constraint has zeroed with the facility of online mutual fund investing and the clients can invest 24*7 from anywhere even at the odd hours of the day. There is no constraint for investing in even on holidays and the clients can access every utility available in the offline method.
- No specific knowledge: The clients need not acquire any specific knowledge while investing in liquid funds which is otherwise an important thing while investing in stock and every other investment mechanism. The bonds have a similar investment strategy and are of same kind. Thus, the clients need not have any distinctive apprehension for investing in liquid funds. Thus, the clients can easily invest in any of the scheme while making the best possible use of their money.
- Eliminates talks completely: While a person is investing in any other avenue like stock or property he would receive n number of comments and advises. It is like as many mouths so are the opinions which makes it difficult to take the decision by putting the investor in a dilemma. But, same is not the case with liquid funds as it invests in bonds and securities only. Thus, there is no point of discussion because all the money market instruments have same policies of operation.
Thus, if you want to earn more in a short time spell then liquid funds are the best option available to you. It is the only fund operating in the industry which shows an upward trending curve even when other funds are incurring reduced profit. So, one can invest in various top performing schemes like Reliance Liquid Fund Cash Flow.
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