Rising interest rate trend has made liquid funds attractive: Experts

Investors entering the market now can expect above 5% return at low risk, better than parking money into a savings bank account

While rising interest rates are a cause for concern for most debt fund categories, one that benefits from this phenomenon is liquid funds. The returns of this category have improved in the recent past and could get even better if interest rates continue to climb.

Invest in short-term instruments

Liquid funds invest in debt and money-market securities with maturity of up to 91 days. They are subject to graded exit load if the units are sold within seven days from the date of allotment. The introduction of overnight funds and imposition of exit loads on liquid funds by the Securities