Top Crisil-rated liquid funds that have delivered high single-digit returns at low risk

Mutual fund flows have undergone a dramatic shift over the pat few months, with the liquid fund category enjoying the highest net inflows. In October, the category saw net inflows of Rs 32,964 crore than the previous month, according to data from mutual fund industry body AMFI. In fact, not only the liquid fund category, but also the entire debt fund bucket mopped up decent inflows to the tune of 42,634 crore last month. 

So, if you are in search of some short-term investment options that are as good as a savings account, here are three top Crisil-rated funds that have delivered returns to the tune of almost seven per cent in the past year:

1. Canara Robeco Liquid Fund

This fund, from the house of Canara Robeco, has an asset size of Rs 3,813 crore and is ranked at the top position by rating agency Crisil. This fund has a history of 15 years with trailing one-year return of a decent 6.98 per cent. 

As of November 14, 2023, the net asset value (NAV) of the fund stands at Rs 2,802, while its three- and five-year returns are at 4.84 and 5.03 per cent, respectively. This scheme is also accorded a four-star rating by investment firm Value Research.

Investors can participate in the scheme by parking a minimum of Rs 5,000 of their funds in lump sum and a minimum of Rs 1,000 through the SIP route.
The scheme carries an expense ratio of 0.2 per cent.

2. Parag Parikh Liquid Fund

As of October 31, the fund commands an asset size of Rs 2,027 crore. In existence for the past five years, the fund has delivered a return of 6.62 per cent in the last year. 

Its NAV stands at Rs 1,307, as of November 14. 

Investors can put their money in the fund at a minimum of Rs 5,000 in lump sum and Rs 1,000 through an SIP. 

When it comes to fund allocation, the fund invests 99.54 per cent in debt securities, and mobilises the remainder in cash and cash equivalents. The fund enjoys the top ranking by Crisil.

3. Baroda BNP Paribas liquid fund

The Rs 9,644-crore fund from the house of Baroda BNP Paribas holds a five-star rating by Value Research, while Crisil has placed it at the second position within the category. 

In existence for 14 years, the fund has rewarded investors with a return of 6.92 per cent since launch. Its trailing one-, three- and fi rated ¬¬ear returns are recorded at 6.95 per cent, 4.88 per cent and 5.28 per cent, respectively.

When is the right time to park your funds in liquid funds? Who should invest in liquid funds? 

Liquid funds can offer a better return than bank fixed deposits carrying low risk. Nevertheless, investors still need to have some risk appetite before putting their money into this type of debt funds. 
The market value or the source of earnings for these securities does not depend much on the market interest rate. So, when interest rates are headed higher, these funds offer a comparably better return than other debt funds.