Liquid funds lend money for very short periods, up to 91 days, to the government, banks and top-rated companies. Their NAV barely moves day to day, and you can usually get your money back within one working day.
They are the mutual fund answer to a savings account. Returns are typically a little above a savings account and close to a short fixed deposit, with no lock-in and no penalty for leaving early.
Use them for money you might need soon: an emergency fund, a sum you are holding before a purchase, or the parking spot between selling one investment and buying the next. On Crowwd, they form part of the Safety sleeve.
Buzz Bite
Liquid funds are where money waits. Keep your emergency fund here, not in equity.