When to invest in liquid fund?

Q & A Forum › Category: Mutual Funds › When to invest in liquid fund?

Dipa asked 7 years ago

Hi, I want to know when to and how long can we should invest in liquid funds? Few of them I know is better than savings account to invest idle money, to set up STP plan. So my question is, is it wrong to invest in liquid fund for long term like 3 or more years?

3 Answers

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Sreekanth Staff answered 7 years ago

Hi, It is not right or wrong, but its based on your requirement. For ex: If I have to accumulate certain amount of money for Medical emergencies then I would pick a Liquid fund, here time-period does not really matter. Related article : What is an Emergency Fund? | Why, Where & How much to save?

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Dipa answered 7 years ago

When i read the definition of liquid fund on most websites it says its better alternative of savings fund of banks but also says for the duration of 3 MONTHS? So here i am confused with this 3 month duration. Can you please explain this?

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Sreekanth Staff answered 7 years ago

Hi, The main purpose of investing in Liquid funds is to protect the capital and get few more basis points as returns when compared to Saving deposits. You can remain invested as long as you require.