If you want to earn some money fast, but do not want to lose out by making a wrong investment, then here is what you should put your cash in.  Mutual fund investments are mainly for achieving long-term investment goals. However, certain MF categories can be used for achieving short-term and mid-term money-making goals too. This can be in the form of liquid funds, which are the most preferred choice among the mutual fund investors who want to earn more than the debt funds and other risk-free investment options like bank deposits, Bank FD, etc. Those who want to earn money fast can use the liquid fund option if their investment is for short-term, say tax and investment experts, but be warned that there are certain risks involved.

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

Elaborating upon the liquid funds Jitendra Solanki, a SEBI registered tax and investment expert said, "Liquid funds are meant for short-term investment as it has an underlined mandate of maximum 91 days means a mutual fund house fund manager can invest your money in those stocks where they have to book profit within 91 days. Earlier, the maximum time period allowed was six months but the time period was made lesser to minimize the risk factor." 

See Zee Business Live TV streaming below:

On profit that an investor can expect after investing in liquid funds, Solanki said that a mutual fund investor investing in liquid funds can expect around 6-7 per cent, which is much better than the traditional bank deposits and other bank debt funds. He said that liquid fund investments are 'mark to market' that has made the investments done by the mutual fund houses more transparent for the investors.
 
Pankaj Mathpal, Managing Director, Optima Money Managers said, "Liquid funds are ideal for parking money for short term. One can invest in Liquid funds when he or she wants to set up a Systematic Transfer Plan. Through liquid funds, a mutual  fund investor can transfer the money form liquid funds to equity funds systematically."

Asked about the preferred liquid funds where an investor can invest Jitendra Solanki advised investors to go for the liquid funds of big corporate houses and named HDFC Liquid Fund and ICICI Liquid Fund. 

On his part, Pankaj Mathpal suggested investors go for Aditya Birla Sun Life Liquid Fund saying, "Scheme has exposure in Fixed Deposits and high-quality Bonds, Certificates of deposits and Commercial Papers." Pankaj said that Aditya Birla Sun Life Liquid Fund has given 7.17 returns in the last one year while in last three years and 5 years the returns given by the fund are 7.01 per cent and 7.5 per cent respectively.