Purpose of Liquid Mutual Funds
The purpose of Liquid Mutual Funds is multifaceted in an investors portfolio;
1. Capital Protection : The aim of Liquid Mutual Funds is to safeguard your capital. They invest in risk and highly liquid assets minimising the possibility of capital erosion.
2. Easy Access to Funds: These funds are suitable for individuals who may need access to their investments. Investors can redeem their units at any time. The funds are typically credited to their bank accounts within 1-3 working days.
3. Temporary Money Parking: Investors often utilise Liquid Mutual Funds as a parking space for their money. This can include funds waiting for investment opportunities in asset classes or money kept aside for emergencies.
4. Accomplishing Short Term Goals: Liquid Mutual Funds are well suited for achieving term goals, such as saving up for a down payment on a home planning a vacation or building an emergency fund.