List of the Top Liquid Funds in India for 2026

Liquid funds are debt mutual funds that invest in money market instruments with maturities up to 91 days, making them one of the shorter-duration categories in the debt fund universe. They carry minimal interest rate risk due to the short maturity profile, and redemptions are typically processed within 24 hours on business days. Expense ratios in this category generally stay below 0.50%, among the lowest across mutual fund categories. Credit and market risks still apply, as with any debt instrument. Here are some of the top liquid funds in the category.

Top Liquid Funds in India

Here is a list of the top liquid funds in India, along with their performance and key parameters.

Disclaimer: Please note that the above list of Best Liquid Funds is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing. The data is derived from Tickertape Mutual Fund Screener and is subject to real-time updates.

Note: The data on the list of the best liquid funds is from 21st April 2026. This data is derived from the Tickertape Mutual Funds Screener.

• Plan: Growth
• Category: Liquid Fund
• AUM: Sorted from highest to lowest

Pro Tip: You can use Tickertape’s Mutual Fund Screener to research and evaluate funds with over 50+ pre-loaded filters and parameters.

What are Liquid Funds?

Liquid funds are a category of debt mutual funds that invest in money market and debt instruments with a maturity of up to 91 days. The underlying portfolio typically includes treasury bills, commercial papers, certificates of deposit, and short-term government securities. Due to this short maturity profile, the net asset value of liquid funds tends to remain relatively stable compared to longer-duration debt funds.

As per SEBI regulations, liquid funds follow a graded exit load structure for redemptions made within seven days of investment, after which no exit load applies. Redemption proceeds are generally credited within one business day, and most fund houses also offer an instant redemption facility of up to ₹50,000 or 90% of the folio value, whichever is lower.

Overview of the Top Liquid Funds

SBI Liquid Fund

SBI Liquid Fund is an open-ended liquid scheme managed by SBI Mutual Fund, investing in money market and debt instruments with maturity up to 91 days. The portfolio primarily comprises treasury bills, commercial papers, and certificates of deposit issued by high-rated entities.

HDFC Liquid Fund

HDFC Liquid Fund is a liquid category scheme from HDFC Mutual Fund that deploys corpus across short-term money market and debt securities. The fund maintains a portfolio of instruments with residual maturity not exceeding 91 days, focused on preservation of capital and liquidity.

Aditya Birla SL Liquid Fund

Aditya Birla SL Liquid Fund is an open-ended liquid scheme by Aditya Birla Sun Life Mutual Fund that invests in money market and debt instruments maturing within 91 days. The portfolio includes commercial papers, treasury bills, and certificates of deposit from various issuers.

ICICI Pru Liquid Fund

ICICI Pru Liquid Fund is a liquid scheme offered by ICICI Prudential Mutual Fund, with investments concentrated in short-term money market and debt instruments. The fund adheres to the SEBI-mandated 91-day maximum maturity criterion across its portfolio holdings.

Kotak Liquid Fund

Kotak Liquid Fund is an open-ended liquid category scheme from Kotak Mahindra Mutual Fund. The fund invests in a diversified basket of money market and debt securities, including treasury bills, commercial papers, and certificates of deposit with maturity up to 91 days.

Axis Liquid Fund

Axis Liquid Fund is a liquid scheme managed by Axis Mutual Fund that allocates its corpus across short-term money market and debt instruments. The portfolio is constructed with securities maturing within 91 days, in line with SEBI’s liquid fund category norms.

Nippon India Liquid Fund

Nippon India Liquid Fund is an open-ended liquid scheme by Nippon India Mutual Fund. The fund invests in money market instruments and debt securities with residual maturity of up to 91 days, including commercial papers, treasury bills, and certificates of deposit.

Tata Liquid Fund

Tata Liquid Fund is a liquid category scheme from Tata Mutual Fund that deploys its corpus across short-term debt and money market instruments. The fund maintains a portfolio of securities with maturity not exceeding 91 days from varied issuers.

UTI Liquid Fund

UTI Liquid Fund is an open-ended liquid scheme managed by UTI Mutual Fund, investing in money market and debt instruments with up to 91-day maturity. The portfolio typically includes treasury bills, commercial papers, and certificates of deposit across rated issuers.

DSP Liquidity Fund

DSP Liquidity Fund is a liquid scheme offered by DSP Mutual Fund that invests in short-duration money market and debt instruments. The fund holds securities with residual maturity of up to 91 days, structured in accordance with SEBI’s liquid fund regulations.

Taxation on Best Liquid Funds

Best liquid mutual funds are classified as debt funds for tax purposes in India, as they invest primarily in foreign equities. The liquid mutual funds taxation is as follows:

How to Invest in the Best Liquid Funds?

You can start investing in liquid funds by following these steps:

• You can invest in liquid funds through smallcase
• The next step is to research and identify the best liquid mutual fund that aligns with your investment objective and target geography. Tools like the Tickertape Mutual Fund Screener can help you filter and compare funds based on parameters such as tracking error, expense ratio, and fund size.
• Once you shortlist the funds, visit smallcase, log in, and search for the fund by name. You can then choose the investment mode, either a one-time lump sum or a SIP plan, and complete the process.

Here are a few popular smallcases among new investors:

Who Should Invest in Best Liquid Funds?

Investors across different profiles can consider liquid funds based on what they want from their money and how they manage cash. Here are some common types:

• Investors parking surplus cash: People sitting on idle money before putting it into equity or hybrid schemes often use liquid funds as a temporary parking spot while they decide where to allocate next.
• Emergency corpus builders: Investors who want to set aside a contingency reserve often look at liquid funds because redemptions happen quickly and volatility stays lower than longer-duration debt categories.
• Short-term goal planners: People with goals coming up in a few months, like an upcoming expense, a fee payment, or a travel plan, sometimes park money in liquid schemes during this interim period.
• STP users: Investors running a Systematic Transfer Plan usually keep their lump sum in a liquid fund and shift fixed amounts into equity schemes at regular intervals to average their entry over time.

Benefits of Investing in Best Liquid Funds

Liquid funds come with a few features that make them stand out within the debt mutual fund category. Here are the main ones:

• High liquidity: Fund houses usually credit redemption proceeds within one business day. Most of them also offer an instant redemption facility, where you can withdraw up to ₹50,000 or 90% of the folio value, whichever is lower, subject to scheme terms.
• Low liquid fund interest rate sensitivity: Liquid funds invest in instruments that mature within 91 days, so the portfolio’s duration stays short. This limits how much the liquid fund interest rate swings can move the fund’s net asset value compared to longer-duration debt funds.
• Diversified portfolio: Liquid funds spread money across money market instruments like treasury bills, commercial papers, and certificates of deposit issued by multiple entities, which helps reduce issuer-level exposure within the portfolio.
• Low expense ratios: Expense ratios in the liquid fund category sit among the lowest across mutual fund segments, which keeps the cost drag on the portfolio low over the investment horizon.
• Regulated framework: SEBI governs liquid funds under defined category norms, covering maturity profile, credit quality, and valuation. A graded exit load also applies if you redeem within the first seven days of investing.

Risks of Investing in Best Liquid Funds

• Credit risk: Liquid funds hold instruments issued by corporates, banks, and other entities. If an issuer defaults or faces a credit rating downgrade, it can hit the valuation of the underlying security and drag the fund’s net asset value down.
• Interest rate risk: The short maturity profile limits sensitivity, but liquid fund NAVs can still move a little when short-term interest rates shift. Changes in the RBI’s policy rates or money market yields can marginally influence liquid funds returns.
• Liquidity risk: During stressed market conditions, some underlying money market instruments can become hard to sell at fair value. This can affect the fund’s ability to meet large redemption requests smoothly when markets dislocate.
• Reinvestment risk: The portfolio matures within 91 days, so the fund manager has to reinvest proceeds frequently. If yields drop when it’s time to reinvest, the portfolio yield comes down accordingly.
• Market risk: Liquid funds returns track movements in short-term debt market instruments and come without any assurance. Unlike traditional fixed deposits, liquid funds returns move with market conditions and portfolio composition.
• Concentration risk: If the portfolio leans heavily on a single issuer or sector, any bad news around that issuer or sector can hit the fund’s performance harder than expected.

Factors to Consider Before Investing in Best Liquid Funds

• Portfolio credit quality: The credit rating profile of the underlying securities tells you the overall risk level of the portfolio. A higher share of top-rated instruments like sovereign papers and AAA-rated securities points to lower credit risk exposure.
• Expense ratio: The expense ratio is the annual cost the fund house charges to run the scheme. In the liquid fund category, yield differentials are narrow, so even small gaps in expense ratios can move net returns over time.
• Fund size (AUM): Assets under management show the scale of the scheme. Larger AUM usually allows better diversification and liquidity management, while smaller funds can feel the impact of large redemption requests more sharply.
• Portfolio composition: The mix of treasury bills, commercial papers, certificates of deposit, and other money market instruments changes from fund to fund. Looking at the allocation shows how the fund balances yield against safety.
• Average maturity and YTM: Average maturity shows the weighted maturity of the portfolio, while yield to maturity reflects the yield the portfolio would deliver if held to maturity. Both give you a sense of the fund’s return and risk profile.

Conclusion

Liquid funds form a distinct category within the debt mutual fund space, defined by their short maturity profile, diversified money market holdings, and SEBI-regulated framework. Parameters such as credit quality, expense ratio, portfolio composition, and AMC track record vary across schemes and shape each fund’s overall profile. The Tickertape Mutual Fund Screener simplifies this evaluation with 50+ filters spanning AUM, expense ratio, portfolio holdings, credit rating, and average maturity, enabling side-by-side comparison of liquid funds. Explore the screener to filter, compare, and analyse schemes in one place before making an informed investment decision.

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FAQs on Best Liquid Funds in India