Is it good to invest in liquid MFs

[samkapoor77]

Is it a good idea to invest in liquid mutual funds?

[Sameer Kapoor]

A liquid mutual fund invests in money market instruments like commercial papers, treasury bills, etc. There is no exit load on these funds and you can redeem your money in T+1. Investment in these funds is good for those who look for extreme liquidity. However, investing in liquid funds is not a good option for those who are looking for high returns. The ROI is low as compared to other funds in the market. Other than funds for emergency, liquid mutual funds have nothing special in them.

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