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Returns plus Liquidity

Liquid funds invest in money market instruments, but don’t offer the best balance of returns & liquidity…

Which mutual funds offer zero capital gains tax if sold after one year? Which type of money market mutual fund will offer best liquidity and returns?
- Surendra Vaidya

All gains made on equity mutual funds, and balanced funds with over 65 per cent allocation to equity, are exempt from long-term capital gains tax. So if you hold these investments for a period of over 1 year, you're not liable to pay any tax on the gains you make.

Coming to your second query, only liquid funds invest in money market instruments. But the best balance of good returns and high liquidity is offered by short-term bond funds.

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