What are liquid funds? Who should invest in them?

Liquid Funds are open ended schemes and serve as an ideal option for investors with a short term investment horizon and a low risk appetite. So if you are wondering what to do with that surplus cash in your savings account, which you do not require in the near future ( say up to a year), liquid funds are definitely a good deal.

Returns from Liquid Funds
Liquid funds, offer returns that are more or less comparable to fixed deposits. Its historical returns have been around 8%. Plus they provide investors with the liquidity of a savings accounts.

Historical Data of Returns in Past One Year of Liquid Funds (Data taken from www.valueresearchonline.com as on September 12, 2011)

Escorts Liquid - 9.89%
Peerless Liquid Super Inst - 8.54%
Sahara Liquid Variable Pricing - 8.52%
BNP Paribas Overnight Institutional - 8.48%
Taurus Liquid Super Inst – 8.47%
Sahara Liquid Fixed Pricing – 8.47%