I am 32 years married and residing with daughter in Bengaluru. I have been investing in ELSS via SIP for the past 2 years. Recently, I have been hearing a lot about liquid funds. I want to invest in these liquid funds, but I am confused. Are these liquid funds safe?
ELSS is a type of diversified equity mutual fund which is qualified for tax exemption under section 80C and offers the twin advantage of capital appreciation and tax benefits. It comes with a lock-in period of 3 years. SIP allows you to invest a certain pre-determined amount at a regular interval (weekly, monthly, quarterly, etc.). 1. Liquid funds are the least risky of all mutual funds and invest in short-term bond instruments. These funds are ideal for keeping money that would be needed in a short period of time. 2. These funds are flexible and always provide an exit option to investors. Whenever you would like to get a part or whole of your money back, you can place a redemption request and the money will come to your bank account in a single business day. Factors such as low risk, potential for higher returns, and the quick availability of money make these funds an ideal choice for parking money for a short duration.