Can I withdraw money from liquid funds anytime?
You can dip into the money you invest in a liquid fund at any time, an exit load or fee is charged only if you withdraw within the first seven days of investing in this fund.
You can redeem anytime you want. There is no lock‐in period in liquid funds. Do liquid funds have an exit load? Yes, but only if you redeem within seven days of investing.
The net asset value or NAV of a liquid fund is calculated for 365 days. Further, investors can get their withdrawals processed within 24 hours. These funds carry the lowest interest-rate risk in the debt funds category.
Liquid funds can invest only in listed commercial papers, and they have an overall exposure limit of 20% in a sector. They are not permitted to invest in risky assets as defined by SEBI norms. These norms aim to contain credit risk in the liquid fund portfolio.
- Commercial papers.
- Treasury bills.
- Corporate bonds.
- Government bonds.
Highly liquid, liquid money can be redeemed instantly with the help of insta-redemption facility.
Liquid mutual funds with instant redemption facility. Withdraw a maximum of Rs. 50,000 or 90% of invested amount within 30 minutes to your bank account.
Credit Risk
Unlike traditional savings or fixed deposit accounts, liquid mutual funds are not insured. Despite the fact that money market mutual funds invest in high-quality securities, risk is inevitable. There is no assurance that you will get the invested capital when you opt for redeeming your MF units.
Liquid funds do not come with a lock-in period. The redemption requests of liquid funds are processed within 24 hours on business days.
Cash on hand is considered to be a liquid asset because it can be readily accessed. Cash is a legal tender that a company can use to settle its current liabilities. The money in your checking account, savings account, or money market account is considered liquid because it can be withdrawn easily to settle liabilities.
How do I transfer money from liquid funds to equity funds?
Transferring from liquid funds to any other fund is very easy. All you have to do is invest the lump sum amount in a liquid fund and submit a switch form along with your investments. In the switch form you have to mention the 'Transferor scheme name' (i.e. the scheme from which you are switching.
You can redeem your Mutual Fund units anytime for investments done in open-ended schemes. However, you cannot redeem units from ELSS Schemes before maturity due to lock-in period of 3 years.
Liquid funds invest in highly rated short-term debt securities such as T-Bills and commercial papers. Arbitrage funds invest across debt, equity, and equity derivatives to leverage cash and futures market arbitrage opportunities while maintaining fully hedged positions.
- Mirae Asset Liquid Fund.
- Parag Parikh Liquid Fund.
- HDFC Liquid Fund.
- HSBC Liquid Fund.
- Motilal Oswal Liquid Fund.
- WhiteOak Capital Liquid Fund.
- Kotak Liquid Fund.
- TRUSTMF Liquid Fund.
Is it possible to request a partial withdrawal from one's total investment? For the liquid (nil mhp) plan, you can request a partial withdrawal from your total investment.
There are a few ways to show proof of funds, and the first one that comes to most people's minds is a bank statement. But it is important to remember that a bank statement also includes substantial personal information. Ensure that your personal information is protected if you decide to opt for this route.
Stocks take 2 trading days to settle and options take 1 trading day to settle. In a margin account, you can instantly trade with funds from unsettled stock and option sales. If you have unsettled trades and withdraw cash from your margin account with margin investing enabled, it can lead to margin interest charges.
| BANK | DAILY LIMIT |
|---|---|
| Capital One | $500 to $1,000 |
| Chase | Up to $3,000 |
| Chime® | $515 |
| Citi® | $1,500 to $2,000 |
Unless your bank has set a withdrawal limit of its own, you are free to take as much out of your bank account as you would like. It is, after all, your money. Here's the catch: If you withdraw $10,000 or more, it will trigger federal reporting requirements.
| Bank | Daily ATM Limit | Daily Debit Limit |
|---|---|---|
| Chase | $500-$3,000 | $3,000 |
| Citi | $1,500-$2,000 | $5,000-$10,000 |
| PNC | $500-$2,000 | $2,000-$5,000 |
| TD Bank | Starts at $1,000 | No specified limit |
Why do liquid funds give negative returns?
Bulk of liquid fund's return comes through interest earned through investing in these papers. Therefore, when the RBI cuts repo rates, the overall interest rates including the interest rate on short-term papers (in which liquid funds invest) go down.
Stability of returns: The difference between liquid funds and debt funds in terms of the stability of returns is that liquid funds are more stable in terms of returns because of their short-term duration and therefore less linked to interest rate movements in the market.
Lowest interest rate risk: Liquid mutual funds carry the lowest interest rate risk because of their high liquidity and investments in high credit rated securities. No taxes on dividends: Liquid fund dividends are not taxed in the investor's hands, but dividend distribution tax applies.
Tax on Gains: Gains from liquid funds are subject to taxation. Short-term capital gains (STCG) within three years are added to your income and taxed at the applicable slab rate. Long-term capital gains (LTCG) after three years incur a flat 20% tax rate after indexation.
| Fund Name | Category | 1Y Returns |
|---|---|---|
| UTI Liquid Fund | Debt | 7.3% |
| Mirae Asset Liquid Fund | Debt | 7.4% |
| Canara Robeco Liquid Fund | Debt | 7.3% |
| Mirae Asset Cash Management Fund | Debt | 7.2% |
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