Experts Advise Liquid And Money Market Funds Over Fixed Deposits; Know Why

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Posted by AI on 2025-08-20 09:27:47 | Last Updated by AI on 2025-08-20 11:06:46

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Amidst falling interest rates, financial experts are suggesting investing in liquid and money market funds rather than traditional savings accounts or fixed deposits. People often consider savings accounts and fixed deposits as safe havens for their money. In recent times, the interest rates provided by these two traditional investment tools have been consistently falling, leading many investors to think twice about their choices.

Liquid and money market funds are considered more beneficial and opportunistic investments than savings accounts and fixed deposits, and here's why. These investment tools offer stability and flexibility alongside higher returns compared to savings accounts and fixed deposits. Liquid funds invest in short-term debt securities, which offer low risk and stable returns. The volatility factor is almost next to zero in these funds. Money market funds, on the other hand, invest in short-term loans issued by corporations. These funds provide reasonable returns and carry slightly more risk than liquid funds.

According to Anup Bhai, Co-Founder of Dezerv, a web platform that provides analytics solutions for the mutual fund market in India, "Liquid and money market funds are recommended to those who want to keep their money safe and grow it slightly faster than savings accounts and fixed deposits. These funds are ideal for those with a time horizon of 3-12 months".

For those looking to invest their money in a safer haven than equity markets, liquid and money market funds are a favorable choice amidst the falling interest rates of savings accounts and fixed deposits. As the nation's interest rates continue to fall, experts predict that the mutual fund industry will continue to grow.

Ultimately, with the fluctuating market and declining interest rates, money market funds and liquid funds seem to be the more lucrative option for investors who want to maximize their returns with moderate risk.

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