Best Liquid Mutual Funds

Liquid funds invest in debt or money market securities and fall under the debt fund category.  The liquid funds, especially those that mature within 91 days, would make up the debt and money market funds.  For a few weeks to a few months, you can park your excess funds by using them as money market mutual funds. 

Since liquid funds have great liquidity, as their name suggests, they may be the preferred choice for investors seeking short-term investments lasting a few days or weeks.  The top liquid funds for 2025 investments are included here as well.

Overview of the Top Liquid Funds in India

Edelweiss Liquid Direct Growth
The Edelweiss Liquid Fund is known for its prudent risk management and highly liquid portfolio. It aims to offer investors a convenient parking avenue for surplus cash with minimal credit risk. The fund generally invests in high-quality short-term instruments.

Aditya Birla Sun Life Liquid Fund Direct Growth
A popular choice among corporates and retail investors alike, this fund offers efficient cash management solutions. It is designed to prioritise capital preservation while providing liquidity. The fund typically maintains a well-diversified mix of short-term debt securities.

Sundaram Liquid Direct Growth
Sundaram Liquid Fund focuses on maintaining a balance between liquidity and stable returns. It is suitable for investors seeking an alternative to traditional savings accounts or fixed deposits for short-term needs. The fund follows a conservative investment approach.

PGIM India Liquid Fund Direct Plan Growth
This fund positions itself as a reliable option for investors looking to optimise idle cash. PGIM India Liquid Fund emphasises quality, liquidity, and safety in its portfolio construction. It offers flexibility for both retail and institutional investors.

Mahindra Manulife Liquid Fund Direct Growth
Mahindra Manulife Liquid Fund provides investors with a low-volatility avenue to manage short-term cash requirements. The fund typically invests in highly rated instruments and maintains strict duration controls to manage interest rate sensitivity.

Axis Liquid Direct Fund Growth
Axis Liquid Fund focuses on offering consistent returns with a high emphasis on safety and liquidity. The fund is suitable for those who want to park funds for short durations while maintaining easy accessibility. It generally avoids undue credit exposure.

Union Liquid Fund Direct Growth
Union Liquid Fund appeals to conservative investors looking for simple and safe investment solutions. The fund prioritises liquidity and also low-interest rate risk, making it a fit for managing temporary cash surpluses. It adheres to a disciplined investment framework.

Bank of India Liquid Fund Direct Growth
Bank of India Liquid Fund is crafted to serve both retail and corporate investors seeking a short-term parking avenue. The fund aims to deliver optimal returns without taking on unnecessary risk. It follows a strategy focused on high-grade debt securities.

Mirae Asset Liquid Fund Direct Growth
This fund is part of Mirae Asset’s well-regarded debt product suite and is known for its disciplined risk management. Mirae Asset Liquid Fund is suitable for investors seeking flexibility and capital safety. It focuses on quality and liquidity.

DSP Liquidity Direct Growth
DSP Liquidity Fund offers a conservative option for investors wanting short-term liquidity with minimal credit risk. The fund adheres to a stringent credit selection process and maintains a highly liquid portfolio. It aims for consistent performance with capital preservation.

Bajaj Finserv Liquid Fund Direct Growth
A relatively newer entrant in the liquid fund space, Bajaj Finserv Liquid Fund is crafted to offer simplicity, liquidity, and safety. The fund positions itself as a modern option for parking idle funds, catering to both retail and institutional clients.

Nippon India Liquid Fund Direct Growth
One of the more well-established liquid funds in India, Nippon India Liquid Fund, aims to combine scale with strong risk controls. The fund focuses on providing daily liquidity while maintaining a diversified, high-quality portfolio of short-term debt instruments.

Canara Robeco Liquid Direct Plan Growth
The Canara Robeco Liquid Fund is designed for investors seeking simple, low-risk ways to manage temporary surpluses. The fund adheres to a disciplined investment philosophy, focusing on capital preservation and effective liquidity management.

UTI Liquid Direct Growth
UTI Liquid Fund leverages UTI Mutual Fund’s long-standing expertise in debt markets. The fund provides an effective vehicle for parking excess funds for short periods. It typically focuses on minimising credit and liquidity risks through a diversified approach.

HSBC Liquid Fund Direct Growth
HSBC Liquid Fund combines global investment processes with a local debt market understanding. It is positioned for investors seeking efficient liquidity management without compromising on safety. The fund adopts a highly conservative and process-driven approach.

Conclusion

Liquid funds are a wonderful choice for anyone seeking a secure, adaptable, and effective solution to maximise their idle capital.  With additional liquidity and tax efficiency, they provide a dependable substitute for savings accounts and even also fixed deposits for brief periods of time.