A liquid fund is a form of debt fund that invests in debt and money market instruments such as business paper, call cash, government securities, treasury bills, etc.,
with a maturity of up to 91 days. Investors who want to store their idle capital for a short time with the least risk should go to liquid funds.
Liquid funds typically yield higher returns than savings accounts, but like fixed deposits. Nonetheless, their returns are lower than debt or balanced funds
which require a higher level of risk. SEBI (India's Securities and Exchange Board) finalized in month October 2019 and announced a new graded system for exit
loads on liquid funds. Earlier on 11 October, SEBI sent a letter to AMFI (India's Association of Mutual Funds) proposing the new plan.
Liquid Fund :
These mutual funds invest not more than 91 days in bonds and money market instruments.