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Liquid fund is exactly the same as a Fixed Deposit but with advantages, see table below


  Savings A/c Fixed Deposit Liquid fund
Capital guaranteed Yes Yes Yes
Interest rate 3% 7-9% 7-9%
Minimum Time 1 day 1 year 1 week
Held with who?
Mutual Fund house
Birla, HDFC, UTI
Paperwork when withdrawing Required Required Mobile OTP or Email
Safety of transaction   FD proceeds returned only to your SB a/c Same
Time for FD withdrawal to reach SB a/c   3-7 days 1-2days
Minimum amount 20,000 50,000 5,000
Tax Tax free for NRE Tax free for NRE Tax free for NRE





When can I use Liquid funds


  • Persons who have received a large bonus
  • persons who have just sold a property 
  • as booster for SSIP and SIP
  • as contigency fund, i.e. we advise clients to maintain 3 months income in Liq funds for emergencies. If the money is in a SB a/c, persons are tempted to spend it


Examples of Liquid Funds




Save 40,000 a year on average

If an individual has 10 Lakhs lying idle in their SB a/c they will be loosing about 40,000 Rs per year in interest. The same idle funds if parked in a Liquid fund would give a much higher return. See table below. Liquid funds are 100% SAFE, exactly like Fixed Deposits, but with the facility to withdraw anytime without loss of interest or penalty, hence the name 'Liquid' fund.


Choose the right Liquid Funds to minimize Tax

Funds from Interest in
SB A/c
Interest in
Liq fund G
Interest in
Liq fund DDRI
NRE 1,000,000 40,000 (4% less TDS) 88,200 (8.8% less TDS) 63,000 (6.3% Tax Free)
NRO 1,000,000 40,000 (4% less TDS) 88,200 (8.8% less TDS) 63,000 (6.3% Tax Free)
Resident 1,000,000 40,000 (File tax return) 88,200 (File tax return) 63,000

(File tax return)

The bold blue items are recommended. Interest figures shown are indicative as of July 2015 and must be rechecked with scheme documents at the time of investmenthey have 



Deca c/o Arunanjali Securities

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