Liquid Fund on WebNotes

Collateral (liquid funds) on Kite

Wed, 20 May 2026 00:00:00 +0000

Liquid fund collateral on Kite is the haircut-adjusted value of liquid debt mutual fund units pledged for F&O margin. It has two advantages over equity collateral: lower haircut, and classification as cash-equivalent for SEBI’s 50:50 cash component rule.

Why liquid fund collateral is preferred

Aspect	Equity collateral	Liquid fund collateral
Haircut	10-50% (depends on scrip)	Typically 5-10%
Counts as cash for 50:50	No (counts as non-cash)	Yes (cash-equivalent)
Liquidity	Daily intraday sell	T+1 redemption
Volatility	High (equity)	Low (liquid debt)
Pledge fee	Same	Same

For an F&O trader who needs to meet the 50% cash requirement without keeping idle cash, liquid fund collateral is the efficient solution: it earns money market returns (~5-7% per annum), counts as cash for margin, and supplies collateral with low haircut.

How to build an emergency fund using mutual funds

Tue, 19 May 2026 00:00:00 +0000

Emergency fund is the foundational financial buffer covering 6-12 months of essential expenses. Liquid and ultra-short duration mutual funds offer the right balance of liquidity, modest yield, and capital safety for this purpose.

Conflict-of-interest disclosure. This guide is published by WebNotes Editorial Team for informational purposes. WebNotes has no commercial relationship with any AMC or platform. No affiliate commission is earned.

Market-risk disclaimer. Mutual fund investments are subject to market risks. Past performance is not indicative of future returns. Liquid funds carry minimal but non-zero risk of NAV drawdown during credit events. Read scheme information documents carefully before investing.

How to select a liquid mutual fund

Tue, 19 May 2026 00:00:00 +0000

Liquid fund selection prioritises capital preservation and liquidity over yield. The 50-100 bps spread between best and median liquid funds isn’t worth chasing if it means credit risk.

Market-risk disclaimer. Mutual fund investments are subject to market risks. Past performance is not indicative of future returns. Liquid funds can drawdown during credit events.

How to set up your first liquid fund investment (emergency corpus)

Tue, 19 May 2026 00:00:00 +0000

A liquid fund as emergency corpus is the standard recommendation for any first-time MF investor before equity allocation. The yield is higher than bank savings; redemption is fast; and the risk of capital loss is minimal.

Conflict-of-interest disclosure. This guide is published by WebNotes Editorial Team for informational purposes. WebNotes has no commercial relationship with any AMC. No affiliate commission is earned. Mutual fund investments are subject to market risks; liquid funds carry minimal but non-zero risk.

How to use instant redemption for liquid mutual funds (IRF)

Tue, 19 May 2026 00:00:00 +0000

Instant Redemption Facility (IRF) lets you redeem up to Rs 50,000 per day per folio from a liquid fund with bank credit within 30 minutes, including on weekends and holidays. SEBI introduced IRF in 2017 specifically for liquid funds, recognising the role they play as savings-account alternatives.

Liquid mutual fund

Tue, 19 May 2026 00:00:00 +0000

A Liquid mutual fund is a SEBI-defined debt mutual fund category investing in money-market and debt instruments with residual maturity up to 91 days. Liquid funds are among the most widely-used mutual fund categories in India, serving as a high-yield alternative to bank savings accounts and sweep-in fixed deposits for short-term cash parking. The category was formalised under the SEBI October 2017 categorisation framework alongside other debt sub-categories.

For Indian retail investors and corporate treasuries, liquid funds offer:

How to compute slab-rate tax on PPFAS Liquid Fund (post Finance Act 2023)

Sun, 17 May 2026 00:00:00 +0000

The Finance Act 2023 was the largest single change to debt mutual fund taxation in over a decade. For any debt-MF investment (technically: any scheme with less than 35 per cent equity exposure) made on or after 1 April 2023, the old indexation-plus-LTCG-at-20-per-cent framework is gone. Gains are taxed at the investor’s marginal slab rate regardless of holding period. Among PPFAS schemes, the Liquid Fund and the Conservative Hybrid Fund fall under this; PPFCF, ELSS, Arbitrage, DAAF, and Large Cap remain equity-oriented and use Section 112A or 111A.

How to invest in Parag Parikh Liquid Fund (parking surplus)

Sun, 17 May 2026 00:00:00 +0000

The Liquid Fund is where short-horizon cash sits. A salary inflow you’ll redeploy next month, a tax refund waiting for the next equity SIP, a property-sale advance, a maturity from another investment, the emergency fund itself, anything you want to earn slightly more than a savings account on while keeping it accessible in a business day or two. PPFAS has two routes for it: the standard SelfInvest portal (full transactional control, all schemes in one view) and the dedicated CashFlex mobile app (launched 21 June 2024, focused on the cash-management use case with a slicker interface and the T+0 Instant Access Facility front-and-centre). Both share the same SelfInvest credentials and the same underlying folio.

How to use the PPFAS Liquid Fund Instant Access Facility

Sun, 17 May 2026 00:00:00 +0000

The Instant Access Facility (IAF) is what makes the Parag Parikh Liquid Fund a viable replacement for a savings account on the emergency-fund use case. Standard mutual fund redemption is T+1; IAF is T+0, with the bank credit reflecting within roughly 30 minutes, available 24x7 subject to bank-side IMPS uptime. SEBI’s 2019 Liquid Fund Risk Management Framework caps the facility at Rs 50,000 per day per folio or 90 per cent of folio value, whichever is lower. Use it for the genuine emergency-fund use case (medical, immediate cash need); use standard T+1 redemption for everything else, since standard redemption has no cap and clears the next business day anyway. IAF is scheme-specific: only the Liquid Fund supports it, available through SelfInvest or the dedicated CashFlex app.

Parag Parikh Liquid Fund

Sat, 16 May 2026 00:00:00 +0000

The Parag Parikh Liquid Fund is an open-ended liquid scheme of PPFAS Mutual Fund , launched on 9 May 2018 by PPFAS Asset Management Private Limited as the second scheme in the AMC’s product line after the flagship Parag Parikh Flexi Cap Fund . It is a liquid mutual fund under the SEBI Mutual Funds Regulations 1996 , benchmarked to the CRISIL Liquid Debt B-I Index, and managed jointly by Tejas Soman, Aishwarya Dhar and Mansi Kariya, with all three operating from the PPFAS debt desk at the AMC’s Nariman Point headquarters.

Arbitrage fund vs liquid fund for short-term cash parking