Do liquid funds have exit load? (2024)

Do liquid funds have exit load?

Liquid Funds have a graded exit load upto six days and no exit load from 7th day. Liquid Funds are free to invest in any money market instruments like CDs and CPs maturing within 91 days irrespective of their credit quality. Thus, they can carry higher credit risk than Overnight Funds.

Is there exit load on liquid funds?

Is there an exit load on liquid funds? Yes, there is an exit load only if you withdraw within 7 days of investing in a liquid mutual fund. After this period, there are no exit load on the liquid funds.

Which funds do not have exit load?

However, certain types of debt funds, like overnight fund and most ultra-short duration funds do not charge mutual fund exit load. Among debt funds, apart from overnight and ultra-short duration funds, many schemes in certain types of debt funds like Banking and PSU funds, Gilt funds etc.

Can I withdraw money from liquid funds anytime?

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.

How long can I keep money in liquid funds?

Liquid funds are preferred by investors to park their money for short periods of time typically 1 day to 3 months.

What is the liquid fund exit load structure?

A graded exit load can be levied in liquid schemes if the investment period is less than seven days. As such, the exit load reduces progressively as the holding period increases. Debt funds generally levy exit load on the redemptions if the holding period is less than periods ranging from one month to one year.

How do you avoid exit load in mutual funds?

How can I avoid paying exit loads on mutual funds? To avoid paying exit loads on mutual funds, investors should adhere to the minimum holding period specified by the mutual fund scheme. If you plan to redeem your investment before the completion of the specified period, you will likely be subject to the exit load.

Do all mutual funds have exit load?

Exit Loads on Various Types of Mutual Funds

Different mutual funds charge different rates of exit load. However, not all mutual funds levy exit load on investors. It is advisable to check the exit load of the mutual fund schemes you are interested to invest in. There is usually no entry or exit load on liquid funds.

What is a good exit load?

The best exit load for a mutual fund is one that is low or non-existent. The exit load is a fee charged by mutual funds when an investor sells or redeems their units before a certain period of time has elapsed. It is usually a percentage of the Net Asset Value (NAV) of the mutual fund units held by investors.

How do I park money in my liquid fund?

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.

Do liquid funds have lock in period?

What is meant by a liquid fund? A liquid fund is a form of mutual fund that invests in securities with a residual maturity of up to a period of 91 days. Moreover, these funds do not have a lock-in period since the underlying assets are not for the long term.

Can liquid funds give negative returns?

The liquid funds can go down in value. However, the likelihood of them going down in value is not that often, owing to the stringent regulations. But, if at all that happens, the magnitude of that fall could be very nominal and can recover in seven-eight days.

What is better than liquid funds?

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.

Is there risk in liquid funds?

In comparison to many other types of investments, liquid funds are one of the safest investment options as these funds invest in very short maturity papers and securities with high credit ratings. This reduces the overall risk of investing in the scheme.

Why liquid funds are giving low returns?

These securities are at the bottom of the risk spectrum and therefore offer lower returns. Since liquid funds now must invest at least 20% of their assets in these low-return securities, part of the drop in returns can be attributed to the same.

How much should you have in liquid funds?

Having at least 3 months' worth of living expenses in savings will enable you to weather unexpected situations with more ease. If you are retired and taking distributions from your portfolio, we advise that you hold at least 12 months' worth of distributions in cash.

Why do people invest in liquid funds?

Advantages of Liquid Funds

Liquid funds offer investors high liquidity, low risk, and potential for competitive returns. These funds invest in short-term, high-quality securities, ensuring quick redemption and minimising the risk of capital loss while offering attractive yields.

Is liquid fund better than savings account?

Interest rates offered on liquid funds is higher than those on Savings Accounts. You can access funds in your Savings Account any time you wish, whereas liquid funds are less accessible. You can get tax benefits on the interest income from Liquid Funds.

Should I use overnight or liquid funds?

Overnight funds have a portfolio that invests in securities that mature in a single day, while liquid funds invest in debt and money market securities that mature within 91 days. They buy short-term instruments like treasury bills and government securities.

How liquid funds are taxed?

The taxation of liquid funds is based on the duration for which they are held: Short-term Capital Gains (STCG): If the units of a liquid fund are sold or redeemed within 3 years, any gains are classified as short-term capital gains and are taxed according to the investor's income tax slab rate.

What is the return on liquid funds?

A quick look at the performance of liquid funds will tell you that these funds offer around 7-9% returns on an average. Hence, they are better than the 4% returns earned on savings account deposits. Like all other mutual fund schemes, liquid funds also charge an annual fee for offering fund management services.

What is the maximum exit load for mutual funds?

Exit loads for equity funds can range from 1% to 2% if the units are redeemed within a certain period, typically one year. Debt Funds: Debt mutual funds invest in fixed-income securities such as bonds and government securities.

Should I exit mutual funds now?

Market Volatility and Risk Management

If a fund consistently underperforms over multiple periods and fails to deliver satisfactory returns, consider exiting the investment. Research and select funds with a similar investment objective but better track records and performance history to redirect your investments.

What is the exit load of an ETF?

Exit load is a fee that the AMC would charge if you want to exit the fund before the minimum holding period. This is done to restrict speculation and short-term, in-out movements of the investors. But ETFs don't have such restrictions. In this, you get the freedom and flexibility to choose your investment horizon.

How do you tell if a mutual fund has a load?

2 The best way to determine the charges is by reading the fund's prospectus. The management firm will pay any charges based on the fund's daily net asset value (NAV) from the no-load mutual fund's assets.