Category: Mutual Funds

High Risk vs Low Risk Mutual Funds: Which One is Right for You?

Before investing in mutual funds, the biggest question is whether I should invest in high-risk funds or low-risk funds. High-risk funds offer high returns but come with volatility, and low-risk funds offer lower returns and provide stability in the portfolio during market fluctuations.

In today’s blog post, we will give you an overview of high-risk funds and low-risk funds, along with their key differences and also tell you which one is suitable for you.

What are High Risk Mutual Funds?

High-risk mutual funds are those funds that primarily invest in equity and other volatile assets. Their primary objective is to generate higher returns over time. However, they are volatile in nature. High-risk can show volatility in the short-run, but can generate higher returns in the long-run, hence they are suitable for investors who have a longer investment horizon. High-risk mutual funds generally invest in small-cap and mid-cap stocks.

Key Features of High Risk Mutual Fund

The key features of a high-risk mutual fund are as follows:

Higher Returns: The high-risk mutual fund can generate higher returns over the long term as these funds invest in equities.
Volatile: High-risk mutual funds are highly volatile in nature. Their prices can fluctuate very sharply during a market correction.
Long-Term Investment Horizon: High-risk mutual funds are suitable for the investor who has a long-term investment horizon.
Inflation-Beating Return: The high-risk mutual fund can beat inflation in the long-run as it tends to generate high returns.

What are Low Risk Mutual Funds?

Low-risk funds are those mutual funds whose primary role is to protect the capital of investors and provide steady returns. Unlike any other high-risk mutual fund, a low-risk fund primarily invests in instruments having fixed returns, such as government bonds, treasury bills, etc. The low-risk fund posts low returns and is suitable for conservative investors. These funds are often used by the investor as an investment option when they want to create a balance in their portfolio.

Key Features of a Low-Risk Mutual Fund

The key features of a low-risk mutual fund are as follows:

Capital Preservation: The key objective of a low-risk mutual fund is to preserve capital from any downside.
Low Returns: As the low-risk mutual fund focuses on low volatility they also provides consistent low returns.
Conservative Investor: The low-risk mutual funds are suitable for investors having a conservative risk profile and prefer safety over high returns.
Stability in Portfolio: During volatile market conditions, a low-risk mutual fund helps in balancing the overall investment portfolio.

High Risk vs. Low Risk Mutual Fund

The key difference between high-risk and low-risk mutual funds is as follows:

Particulars	High Risk Mutual Fund	Low Risk Mutual Fund
Objective	The primary objective of investing in a high-risk mutual fund is wealth creation.	The key objective of investment in a low-risk mutual fund is to preserve capital.
Underlying Asset	High-risk mutual funds generally invest in equities, including small-cap and mid-cap stocks.	A low-risk mutual fund invests in fixed-income securities.
Returns	High-risk mutual funds post higher returns.	A low-risk mutual fund offers low to moderate returns in the portfolio.
Volatility	High-risk mutual funds are highly volatile in nature.	These funds offer low volatility.
Suitability	These funds are suitable for aggressive investors.	Low-risk mutual funds are suitable for conservative investors.
Taxation	High-risk mutual funds follow the equity taxation rule.	The low-risk mutual funds are taxed based on the investor’s income tax slab.
Impact of Market Fluctuations	These funds are highly affected by the market fluctuations.	Low-risk mutual funds are the least affected by market fluctuations.
Safety of Capital	The safety of capital is not guaranteed in a high-risk mutual fund.	In a low-risk mutual fund, capital is generally safer than in a high-risk mutual fund.

Which is suitable for you – High Risk or Low Risk Fund?

Choosing among high-risk and low-risk funds depends on the investor’s financial goal, investment objective and risk profile. If an investor is looking to create wealth in the long run, they can opt for a high-risk mutual fund, as they have the potential to generate a high return. On the other hand, a low-risk mutual fund is suitable for a conservative investor whose priority is to preserve capital and earn steady returns. In most of the cases, it is advisable to have a mix of both high-risk and low-risk mutual funds.

Conclusion

On a concluding note, both high and low-risk mutual funds serve different purposes. High-risk mutual funds are suitable for investors seeking long-term wealth creation and who are comfortable with market volatility. While there is a category of investor who do not want to take risks, are not comfortable with volatility in their portfolio, and prefer low-risk investment options with stable and predictable returns. However, both funds carry certain risks, such as high-risk funds carry market risk and low-risk funds carry interest rate risk, credit risk, etc. Therefore, it is advisable to consult your investment advisor before making any investment in mutual funds. Pocketful offers access to 2,000+ mutual fund schemes. Download now and enjoy zero brokerage on delivery trades and mutual fund investments.

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Frequently Asked Questions (FAQs)

What is the meaning of high-risk and low-risk mutual funds?
High-risk mutual funds are those funds that invest primarily in equities and have the potential to post higher returns. Whereas low-risk mutual funds invest in fixed-income securities, such as government bonds, etc. and post stable returns with lower volatility.
How to reduce risk while investing in a high-risk mutual fund?
One can reduce their risk by increasing their investment horizon. High-risk mutual funds are volatile in the short run; however, in the long run, they post inflation-beating returns.
Do high-risk mutual funds always post high returns?
No, a high-risk mutual fund does not always post high returns their performance depends on the fund manager’s capabilities and market performance. Returns are not guaranteed in a high-risk mutual fund.
What are the key examples of high-risk mutual funds?
The key examples of high-risk mutual funds are mid-cap funds, small-cap funds, sectoral and thematic funds, etc.
Do low-risk mutual funds always invest in debt securities?
No, it is not necessary that a low-risk fund always invest in debt securities. There are categories of hybrid funds, such as a conservative hybrid fund, which invests a small portion of its portfolio in equity-related instruments.

May 13, 2026

What is Annualised Returns in Mutual Funds?

When you start investing in mutual funds, one of the first things you come across is “returns.” And very quickly, another term follows, annualised returns.

At first glance, it sounds technical. But once you understand it, it becomes one of the most useful ways to compare your investments.

In this blog, let us break it down in a simple way so you can actually use it while making investment decisions.

Understanding Mutual Fund & Returns

A mutual fund is basically a pool of money collected from many investors, which is then invested in different asset classes like stocks, bonds, gold, etc. This money is managed by a professional fund manager.

These investments then give you returns, which further earn returns, so that your money grows over time.

Before jumping into annualised returns, let us quickly understand what “returns” mean.

Returns are simply the profit or loss you earn from your investment. For example, you invest ₹1 lakh, and after 2 years, it becomes ₹1.44 lakh

Your total return is ₹44,000 or 44%.

Now here is the catch: this 44% does not tell you how fast your money grew each year. That is where annualised returns come in.

What are Annualised Returns

Annualised returns tell you the average yearly return your investment has generated over a period of time.

Instead of looking at total growth, it converts the return into a per-year growth rate, assuming the investment grew at a steady pace.

Let us understand the concept with a simple example;

Investment: ₹1,00,000
Value after 2 years: ₹1,44,000
Total Return: 44%

Now, the annualised return will tell you the average yearly growth rate. In this case, it is approximately 20% per year, not 22% (which many people assume by dividing 44% by 2).

Annualised returns consider compounding, which means the investment amount earns returns in the first year, and also earns returns in the second year

So, your money grows on both your original investment and your past gains. That is why simply dividing the total return by the years gives an incorrect picture.

Importance of Annualised Returns

1. Helps Compare Different Investments

Let us say fund A gave 50% return in 5 years, and fund B gave 30% return in 3 years. How will you decide which one is better?

At first glance, Fund A looks better. But when you annualise:

Fund A gives 8.4% per year
Fund B gives 9.1% per year

Now the picture changes, since annualised returns allow you to compare investments fairly, even if the time periods are different.

2. Shows the True Picture

Total returns can sometimes be misleading. For example,60% return over 10 years sounds good, but when annualised, it is only about 4.8% per year, which is barely beating inflation. Annualised returns help you understand the real earning power of your investment.

3. Useful for Long-term Planning

If you are investing for goals like:

Retirement
Buying a house
Children’s education

You need to know how your money grows year by year, not just overall. Annualised returns help you estimate whether you are on track or do you need to work on your investments.

Annualised Returns vs. Absolute Returns

This is where many investors get confused.

Absolute returns show total gains or losses, and are considered best for short-term investments (less than 1 year). For example, you invest ₹1 lakh, and it becomes ₹1.1 lakh in 6 months. This is 10% absolute return.

Formula for Annualised Returns

AR = (Final Value / Initial Investment)^1/n – 1

Where,

Final value = Value of your investment at the end

Initial Investment = Amount you invested

n = number of years

Example

Let us understand this with an example:

Suppose you invested ₹100,000, and after 3 years it became ₹172,800

If we apply the above formula:

₹172,800 / ₹100,000 = 1.728

We know that n = 3

Now, Annualised Return will be (1.728)^⅓ – 1, which is equal to 20%

Therefore, your investment grew at an average rate of 20% per year, not 72.8%.

Where to Check Annulised Returns

1. Use Investment Apps or Platforms

If you are using apps to invest in Mutual Funds, you will find annualised returns in the app itself. Platforms like Pocketful, Groww, Zerodha Coin, etc. make it very easy.

You just need to

Open an account with the Pocketful app
Search for the mutual fund
Open the fund details, and look for returns. You will see numbers like: 1-year return, 3-year return, 5-year return

2. Check the Fund House Website

You can also go directly to the mutual fund company’s website.

For example:

HDFC Mutual Fund
ICICI Prudential Mutual Fund
SBI Mutual Fund

On the fund page, look for a section called “Performance”.

3. Use Financial Websites for Comparison

If you want to compare multiple funds, websites are very helpful. You can check: Value Research, Morningstar, Moneycontrol

Using these websites, you can compare funds side by side and see long-term annualised returns.

Things to Keep in Mind

1. Always Compare Similar Funds

Make sure you are comparing the same type of funds. For example:

Large-cap vs large-cap
Mid-cap vs mid-cap
Debt vs debt

Comparing a debt fund with an equity fund does not make sense because the risk levels are completely different.

2. Do not look at Just One Number

Annualised return is important, but it should not be the only thing you check. Also, look at consistency over time, riskometer, and expense ratio. A fund giving a steady 11% is often better than one jumping between 20% and -10%.

3. Try to interpret what you are seeing

Keep this simple rule in mind: 1-year return is absolute, and 3-year, 5-year, and 10-year returns are annualised. So do not compare the 1-year return of one fund with the 5-year return of another. This won’t give you the right picture.

Conclusion

At the end of the day, annualised returns help you cut through the noise. Instead of getting impressed by big total returns, you get to see how efficiently your money has actually grown over time.

It brings a sense of clarity. You can compare funds better, set more practical expectations, and avoid getting carried away by short-term performance.

But always remember to look at consistency, risk, and whether the investment fits your goals. Use it to stay informed, but combine it with logic and long-term thinking. For more market insights and learning, download Pocketful – offering zero brokerage on delivery, mutual funds, and IPOs through an easy-to-use platform.

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Frequently Asked Questions (FAQs)

Is annualised return the same as CAGR?
Yes, both mean the same thing in most cases.
When should I use annualised returns?
Use annualised returns when your investment period is more than one year.
Can annualised returns be negative?
Yes, if your investment loses money over time.
Do mutual fund apps show annualised returns?
Yes, most apps and websites show it clearly.
Is a higher annualised return always better?
Not always. You should also look at risk and consistency.

May 9, 2026

What is Trail Commission in Mutual Funds?

When you buy a regular mutual fund, you do not pay a direct fee to the person selling it to you. Instead, the mutual fund company pays them a fee behind the scenes. This specific fee is known as a trail commission in mutual fund investing.

We see many people looking for reliable ways to grow their wealth today. To do this properly, it is very important to understand the costs involved in your investments. Many new distributors look at structures like the nj wealth mutual fund distributor commission to understand how they can build a long-term business. This structure shows how earnings can grow steadily over the years.

So, you might ask, what is trail commission in mutual fund exactly?. It is not a one-time payment. It is a continuous payment that acts as a reward for the ongoing service the agent provides to you. In this blog, we will explain everything about trail commission.

Meaning of trail commission in mutual fund

To truly grasp this concept, we need to look at how mutual fund distributors are paid. A trail commission is an ongoing payment made by the Asset Management Company (AMC) to the distributor. This payment continues every year until you decide to sell your investment. It is basically a small percentage of your total invested capital.

You might be wondering if this money is deducted directly from your bank account. The answer is no. This commission is built into the mutual fund’s Total Expense Ratio (TER). The TER covers all the costs of running the fund, and a small part of it is set aside to pay the distributor.

Years ago, agents received a big upfront commission as soon as you invested. However, the rules changed to protect investors. SEBI banned upfront commissions, and now the industry runs almost entirely on the trail model.

Below is a simple comparison to help you understand the difference between the two types of commissions.

Feature	Trail Commission	Upfront Commission (Now Banned)
Meaning	A continuous payment is made as long as the investment is held.	A one-time lump sum paid at the very beginning.
Payment Timing	Calculated daily and paid monthly or quarterly.	Paid instantly when the investment is made.
Cost Location	Embedded inside the fund’s Total Expense Ratio.	Not included in the ongoing fund expenses.
Regulatory Status	Actively encouraged and allowed by SEBI.	Banned by SEBI to prevent mis-selling.

Who Receives Trailing Commissions?

Let us clear up a very common doubt. Who actually gets this money, and who is paying it. The person who receives the trailing commission is your mutual fund distributor or agent. They earn this reward for helping you set up your account and guiding you over the years.

But here is the interesting part. You do not pay them directly from your bank account. The Asset Management Company, or AMC, pays this fee. The AMC takes a tiny portion from the fund’s Total Expense Ratio to pay the agent. So, the fee is handled behind the scenes.

How to Calculate Trail Commission?

You might be curious to know how this fee is figured out. It is very transparent. The mutual fund industry uses a standard trail commission formula. The calculation happens every single day because the value of your mutual fund changes daily. Here is the simple formula: (Total Units Held x Current Daily NAV x Annual Commission Rate) divided by 365.

Let us look at a quick example. if,

Amount invested: Rs 1,00,000

Agent Commision: 0.75%

Period: 365 Days

Annual Commision = Rs 750

The company adds up these daily amounts and pays the distributor at the end of the month or quarter. It is a small daily amount that grows organically as your wealth grows.

Use of trail commission in mutual fund

You might wonder why mutual fund companies use this specific payment system. Asset Management Companies use trail commissions primarily to acquire and retain retail investors. Mutual fund companies know how to manage money, but they need local distributors to reach investors in different cities. By paying a recurring fee, the company gives the distributor a strong reason to keep the client invested for the long term.

The commission rates vary widely depending on the type of fund you choose.Below is a table showing the current average commission ranges based on the fund category.

Mutual Fund Category	Typical Annual Trail Commission Range	Reason for the Rate
Equity Funds	0.80% to 1.50%	Higher risk requires more client guidance and behavioral coaching.
Hybrid Funds	0.60% to 1.10%	Moderate risk profile combining both equity and debt assets.
Debt & Liquid Funds	0.05% to 0.50%	Low risk and highly stable, requiring minimal advisory effort.
Index / Passive Funds	0.15% to 0.30%	Funds simply track the market index, requiring very little management.

Advantage of trail commission in mutual fund

The trail commission model brings several wonderful benefits to both investors and distributors. By focusing on long-term relationships instead of quick sales, this system creates a healthier financial environment. Let us explore the main advantages.

For the distributor,

Passive Income Generation: Distributors do not have to hunt for new sales every single day to survive.
The Power of Compounding: As the stock market naturally goes up over time, the total value of the clients’ money goes up. This means the distributor’s income increases automatically without any extra work.
Low Setup Costs: Starting this business requires almost zero inventory and very little office space. You just need good knowledge and a phone.
Unlimited Growth: If an agent adds just two new clients every month with a Rs 10,000 SIP, they can eventually build a massive income of over Rs 30 lakhs annually.

For the investor,

Behavioral Coaching: Your distributor acts as a coach, advising you to stay calm and stay invested during market falls.
Alignment of Interests: Because the agent’s income is based on your total fund value, their income drops if you lose money. They are highly motivated to pick good funds so your wealth grows.
Frictionless Payments: You never have to write a cheque to pay your advisor. The fee is handled automatically within the fund’s daily pricing.
Continuous Portfolio Reviews: Your advisor is paid to regularly check your investments and suggest changes if a fund stops performing well.

Read Also: Best Mid-Cap Mutual Funds in India

Disadvantage trail commission in mutual fund

While the system has many good points, it also has some serious drawbacks. It is important to look at the disadvantages for both investors and distributors to understand the complete picture.

For the distributor,

Market Volatility Risk: Since the commission is based on the total value of the funds, a sudden stock market crash will instantly reduce the distributor’s monthly income.
Regulatory Changes: Rules made by SEBI and AMFI change frequently. New rules often reduce the commission percentages, directly hurting the agent’s earnings.
Client Loss to Direct Platforms: Today, many investors prefer to manage their own money. Distributors face a tough challenge keeping clients from moving to modern direct investing apps.
Slow Initial Growth: It takes many years of hard work to build a large client base, and the income in the first few years is usually very low.

For the investor

loss of compounding: Because the commission is deducted daily, it slowly eats into your profits. Over a short period of one or two years, a 1% fee might look tiny. However, over a 20 or 25 year period, this tiny fee becomes a huge amount of lost money.
Loss of Returns: You earn less money compared to direct mutual funds because of the higher expense ratio.
Conflict of Interest: Some agents might suggest an equity fund over an index fund just because the equity fund pays them a higher commission.
Paying for No Service: Sometimes, an agent helps you open an account and then never calls you again. You still end up paying them a fee every year for zero help.

Fortunately, there is a very simple solution to avoid these disadvantages. You can choose to invest in “Direct Mutual Funds” instead of “Regular Mutual Funds.” Direct funds do not pay any trail commissions, which means their expense ratio is much lower. All the saved money stays in your account and grows for your future.

Conclusion

Understanding the costs behind your investments is the first step toward financial freedom. Trail commissions play a very important role in the Indian mutual fund industry. They give distributors a reason to guide you, support you, and keep you invested through the ups and downs of the market. For many people who need a financial coach, paying this small recurring fee is entirely worth it.

Whether you choose to work with a dedicated distributor or take the DIY route through a direct app, the most important thing is that you start investing. Stay patient, invest simply, and let compounding work for you – invest in mutual funds with Pocketful.

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Frequently Asked Questions (FAQs)

What is the meaning of trail commission in mutual funds?
It is a recurring, ongoing fee paid by a mutual fund company to a distributor. It is paid as long as you keep your money invested in that specific regular mutual fund.
What are the benefits of paying a trail commission?
The main benefit is that you get continuous support from a financial advisor. They help you with paperwork and review your portfolio.
How to use the trail commission calculation formula?
The formula is very simple. You take the total units you hold, multiply it by the current daily NAV, multiply that by the annual commission percentage, and divide by 365.
Who actually pays this commission to the distributor?
The Asset Management Company (AMC) pays the distributor. However, the money ultimately comes from your investment.
How can you avoid paying trail commissions?
You can easily avoid this fee by investing in “Direct Mutual Funds” instead of “Regular Mutual Funds.”

May 9, 2026

SWP vs FD: Which is Better for Regular Income & Tax Savings in India?

If you are looking for a regular income from your savings, two options usually come up: Fixed Deposits (FDs) and Systematic Withdrawal Plans (SWPs).

FDs have been around forever and feel safe. SWPs are relatively new concepts and linked to mutual funds, so they sound a bit more “market-driven”. Both can give you regular cash flow. But the way they work, and what you get in the long run, is quite different.

In today’s blog, we will break down these terms in a simple way.

What is an SWP

In an SWP, you invest a lump sum in a fund, and instead of withdrawing everything at once, you take out a fixed amount at regular intervals, say every month. The rest of your money stays invested in the selected mutual fund scheme and continues to grow.

How does it work?

You first invest a lump sum amount in a mutual fund scheme, let’s say INR 50 lakh.

On your chosen date, the fund automatically sells pre-decided units from your portfolio the proceeds are credited back to your account.

For example, if you decide to put a trigger of 0.75% on the amount of INR 50 Lakh, you will get INR 37,500 in the bank account.

The remaining units continue to stay invested and earn market returns.

Features of SWP

Regular Income: SWP lets you withdraw a fixed amount, monthly, quarterly, or at any frequency you choose. It is a good option if anyone wants a steady cash flow from their investments.
Flexible Withdrawal: You can increase or decrease the withdrawal amount. Change the frequency and pause or stop the SWP anytime. There is no fixed structure like traditional products.
Helps in Better Cash Flow Planning: SWP is useful for planning regular expenses like monthly household costs, retirement income, and education expenses. It brings discipline to your investment journey
No Lock-in: Most mutual funds, except ELSS, do not have any lock-in period. So you can start or stop your SWP whenever you want to without any restrictions.
Taxation: One of the biggest advantages of SWP is how it is taxed. You do not pay tax on the full withdrawal amount. Instead, you only pay tax on the gains portion.

For example, you invested INR 50 lakh and started withdrawing from the next day. The taxation for the first year will be short-term capital gain at a flat 20%, and from the next year onwards, the taxation will be long-term at 12.5% over and above 1.25 lakh.

What is a Fixed Deposit?

In a fixed deposit, you put a lump sum in a bank for a fixed time, and the bank gives you a fixed interest rate.

You can either take the interest regularly (monthly, quarterly), or let it accumulate and withdraw the interest as well as the principal at maturity

How Does it Work?

You invest a one-time principal amount, let’s say, INR 50,000 for a chosen period, which usually ranges from 7 days to 10 years.

The interest rate is locked in at the opening and does not change, even if the market fluctuates later. For example, you decided to invest with ABC bank that is offering 7.5% interest rate on FDs. In this case, your interest will be locked at 7.5%.

Once the period ends, the bank returns your original principal and the interest accumulated.

Features of Fixed Deposit

Fixed and Predictable Returns: When you do an FD, the interest rate is locked in, which implies that you already know in advance how much you will earn at the end. You can easily calculate the final amount using the Pocketful FD calculator online.
Choice of Tenure: You can choose how long you want to keep your money invested. It can be as short as a few days or as long as 10 years. So you can plan it based on your needs.
Loan Facility: Instead of breaking your fixed deposit, you can also take a loan or overdraft against it, which can be 90-95% of the principal amount and that too usually at a lower interest rate.
4. Low Risk: Since FDs are not linked to the stock market, their returns remain unaffected by the market movement. It does not matter whether the market is up or down; your money is safe.
Taxation: The interest you earn is fully taxable as per your income tax slab. Also, banks may deduct TDS if your interest crosses a certain limit.

For example, if you have an FD of INR 10 Lakh at 7.5%, and you fall into 30% tax bracket, your tax will be INR 22,500.

SWP vs FD – Table of Differences

S. No	Basis	Fixed Deposit (FD)	Systematic Withdrawal Plan (SWP)
1	Nature of Returns	Fixed and guaranteed	Market-linked, not guaranteed
2	Risk Level	Very low risk	Depends on the fund (low to moderate or high)
3	Income Type	Fixed interest payout	Flexible withdrawal amount
4	Taxation	Full interest taxed as per the slab	Only the capital gains portion is taxed
5	Inflation Impact	May struggle to beat inflation	Better chance to beat inflation over time
6	Liquidity	Premature withdrawal allowed with a penalty	High liquidity, can withdraw anytime
7	Flexibility	Limited flexibility	Highly flexible (change, pause, stop anytime)
8	Capital Protection	Capital is usually safe	Not guaranteed, depends on market performance
9	Best Use Case	Short-term goals, capital safety	Long-term income, retirement planning
10	Suitable For	Conservative investors	Investors who are willing to take some risk for better returns
11	Impact of Market	No impact	Directly impacted by market performance
12	Loan Facility	Loan available against FD	No loan facility like an FD

How to Choose Between FD & SWP

1. What do you need the money for?

Start with the basic question. If you just want to park money safely for a short time, FD is good enough, or if you want a regular income over many years, SWP can work better

2. How much risk are you okay with?

This is important. If you do not want to see your investment value fluctuate, choose an FD. If you are comfortable with small ups and downs, go with SWP

3. Taxation

FD interest is fully taxed every year, and in SWP, only a part of what you withdraw is taxed. So if you are in a higher tax bracket, SWP can save you some money over time.

4. Investment Horizon

For short-term needs, FD is considered a safe option, and for long-term income, SWP has an edge since over longer periods, inflation eats into fixed returns. SWP at least gives your money a chance to grow.

To wrap it up, if you are still unsure, do not overthink it. You can split your money:

Keep some in FD for stability
Use SWP for better long-term income

Conclusion

FD and SWP are both useful in their own way; it comes down to what you need from your money.

If you want complete peace of mind, fixed returns, and no ups and downs, an FD feels comfortable and reliable. There is no thinking involved once you invest.

SWP, on the other hand, is a bit more flexible. It gives you regular income, but also keeps your money working in the background. Over time, this can make a difference, especially when you factor in inflation and taxes.

You do not have to pick just one. Many people use both, FD for stability and SWP for better long-term income.

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Frequently Asked Questions (FAQs)

FD or SWP, which one should I choose?
Go for FD if you want safety. Choose SWP if you can take some risk for better returns.
Is SWP safe?
It depends on the fund. Debt funds are relatively stable, but it’s not completely risk-free.
Can SWP give me a monthly income?
Yes, you can set a fixed amount to be withdrawn every month.
Can my SWP money finish?
Yes, if you withdraw too much or the markets don’t perform well.
Which one saves more tax?
In most cases, SWP is more tax-efficient than FD with an effective tax rate of 4-5%

May 5, 2026

Top 10 Best Flexi Cap Mutual Funds in India

A flexi cap fund is a special type of equity fund that gives the fund manager total freedom. The manager can invest your money across large, mid, and small companies based on the market conditions. This means you do not have to stress about picking the right company size yourself.

If you are searching for the best flexi cap fund for your portfolio, you are in the right place. We will help you understand how these funds work in simple words. We will also review the best flexi cap mutual funds available in India right now. These flexi cap funds are very popular because they adapt quickly to changes in the economy.

By the end of this blog, you will know everything about investing in a flexi cap mutual fund. We will look at past returns, taxes, and how to start your investment journey. Let us dive deep into the world of flexible investing.

List of Top 10 Best Equity Mutual Funds in 2026

When we talk about mutual funds, looking at past performance is very important. It helps us understand how the fund manager handled market ups and downs. We have gathered the data for the top 10 flexi cap funds for the year 2026 and is mentioned below

Fund Name	Minimum Investment (INR)	Fund Size (AUM)	NAV (₹)	Expense Ratio	Exit Load
Parag Parikh Flexi Cap Fund	1,000	₹1,28,966 Cr	91.98	0.62%	2.0%
HDFC Flexi Cap Fund	100	₹91,335 Cr	2191.73	0.68%	1.0%
Kotak Flexicap Fund	100	₹50,146 Cr	96.79	0.59%	1.0%
Aditya Birla Sun Life Flexi Cap	100	₹23,018 Cr	2069.40	0.87%	1.0%
SBI Flexicap Fund	1,000	₹20,626 Cr	120.63	0.86%	0.1%
UTI Flexi Cap Fund	5,000	₹20,438 Cr	321.17	1.05%	1.0%
ICICI Prudential Flexicap Fund	5,000	₹18,458 Cr	20.30	0.80%	1.0%
Franklin India Flexi Cap Fund	5,000	₹17,536 Cr	1779.60	0.91%	1.0%
Canara Robeco Flexi Cap Fund	5,000	₹11,922 Cr	377.51	0.57%	1.0%
Bank of India Flexi Cap Fund	5,000	₹2,033 Cr	39.51	0.58%	1.0%

Note: Data is sourced from value research of direct plans up to 18 April 2026.

Overiew of Best Equity Mutual Funds in India

1. Parag Parikh Flexi Cap Fund

This is a very popular fund among Indian investors. It manages a massive fund size of over 1.28 lakh crore rupees. The fund follows a value investing style to buy good stocks at cheap prices.

Fund Name	1Y Return (CAGR)	3Y Return (CAGR)	5Y Return (CAGR)
Parag Parikh Flexi Cap Fund	6.98%	18.97%	20.26%

2. HDFC Flexi Cap Fund

This fund is one of the oldest and most trusted funds in India. The fund mainly invests in strong banks like ICICI Bank and HDFC Bank.

Fund Name	1Y Return (CAGR)	3Y Return (CAGR)	5Y Return (CAGR)
HDFC Flexi Cap Fund	6.37%	21.48%	21.19%

3. Kotak Flexicap Fund

Kotak Flexicap Fund is a great choice for safe growth. The fund manager prefers to invest largely in big companies to keep your money safe.

Fund Name	1Y Return (CAGR)	3Y Return (CAGR)	5Y Return (CAGR)
Kotak Flexicap Fund	9.98%	17.46%	14.80%

4. Aditya Birla Sun Life Flexi Cap Fund

This fund spreads your money across 78 different strong companies. It tries to balance both growth and value in its stock choices.

Fund Name	1Y Return (CAGR)	3Y Return (CAGR)	5Y Return (CAGR)
Aditya Birla Sun Life Flexi Cap	11.01%	19.51%	15.34%

5. SBI Flexicap Fund

If you do not like big market jumps, this fund is for you. It tries to offer steady returns with lower risks. It has given a 10 year return of 13.42 percent.

Fund Name	1Y Return (CAGR)	3Y Return (CAGR)	5Y Return (CAGR)
SBI Flexicap Fund	6.20%	13.11%	12.33%

6. UTI Flexi Cap Fund

This fund currently manages 20,438 crore rupees. It focuses on buying quality businesses that have a good chance to grow.

Fund Name	1Y Return (CAGR)	3Y Return (CAGR)	5Y Return (CAGR)
UTI Flexi Cap Fund	-2.13%	10.70%	7.83%

7. ICICI Prudential Flexicap Fund

This is a relatively new fund that started in July 2021. Because it is new, it does not have old stocks slowing it down. It has performed very well with a 3 year return of 20.14.

Fund Name	1Y Return (CAGR)	3Y Return (CAGR)	5Y Return (CAGR)
ICICI Prudential Flexicap Fund	11.66%	20.14%	N/A

8. Franklin India Flexi Cap Fund

This fund believes in buying stocks and holding them for a long time. It does not buy and sell shares too often.

Fund Name	1Y Return (CAGR)	3Y Return (CAGR)	5Y Return (CAGR)
Franklin India Flexi Cap Fund	3.11%	18.45%	16.80%

9. Canara Robeco Flexi Cap Fund

This fund is a hidden gem with a very low expense ratio of 0.57 percent. It manages 11,922 crore rupees for its investors. The fund manager actively changes the stock choices to find the best profits.

Fund Name	1Y Return (CAGR)	3Y Return (CAGR)	5Y Return (CAGR)
Canara Robeco Flexi Cap Fund	7.20%	16.05%	14.24%

10. Bank of India Flexi Cap Fund

Do not let its small size fool you. This fund manages only 2,033 crore rupees but gives amazing returns. Its small size allows the manager to invest easily in fast growing small companies. It has the highest 5 year return on our list at 20.82 percent.

Fund Name	1Y Return (CAGR)	3Y Return (CAGR)	5Y Return (CAGR)
Bank of India Flexi Cap Fund	15.29%	24.48%	20.82%

Read Also: Best Long-Term Mutual Funds

Advantage and Disadvantage of Flexi Cap Mutual Fund

Every investment has its own good and bad points. It is important to know both sides before you invest your money. Let us look at the benefits and risks of flexi cap funds.

Advantages of Flexi Cap Mutual Fund

Total Flexibility: The fund manager can quickly move your money to the safest or fastest growing companies. This keeps your money safe during bad market days.
Great Diversification: Your money is spread across many different sectors like banking, IT, and healthcare. If one sector falls, the others can protect your money.
Professional Help: You get highly experienced experts managing your money daily. You do not need any stock market knowledge yourself.

Disadvantages of Flexi Cap Mutual Fund

Manager Dependency: Since there are no strict rules, everything depends on the fund manager. If the manager makes a bad guess, your returns will drop.
Lower Bull Market Returns: When the market is booming, pure small cap funds will give huge returns. Flexi cap funds might give lower returns because they also hold safe large companies.
Not for Short Term: If you need your money in 1 or 2 years, this is a bad choice. You might lose money if the market is down when you need to withdraw.

Factors to Consider While Choosing a Flexi Cap Mutual Fund

Here are some important factors we suggest you look at before investing:

Fund Size (AUM): Look at the total money the fund manages. A very big fund like Parag Parikh is safe but might grow slowly. A small fund like Bank of India can grow faster but might be slightly riskier.
Expense Ratio: This is the fee the company charges to manage your money. You should always look for funds with a low expense ratio to save money.
Fund Manager Track Record: The fund manager makes all the buying decisions. Check if the manager has a history of giving good returns over the long term.
Exit Load: This is a penalty fee charged if you take your money out too early. Most funds charge a 1 percent fee if you leave before one year.

Read Also: Best SIP Mutual Funds in India

Who Should Invest in Flexi Cap Mutual Fund?

Flexi cap funds are a great choice for many types of investors. First, they are perfect for people who have a moderate to high risk appetite. Since these funds invest only in the stock market, the value will go up and down daily. You must be comfortable seeing these changes.

Finally, these funds are best for busy people. If you do not have the time to track different large cap or small cap funds, a flexi cap fund solves your problem. You can just invest your money and let the professional manager do the hard work for you.

How to Invest in Flexi Cap Mutual Fund

Investing in mutual funds is very simple and completely online nowadays.

Here are the simple steps to start your investment:

Step 1: Visit the official website like Pocketful and click on open an account.
Step 2: Complete your Know Your Customer (KYC) process online. You will need your PAN card and Aadhaar card details.
Step 3: Search for the best flexi cap fund that suits your financial goals. You can compare different funds on the platform.
Step 4: Choose your investment type. You can start a Systematic Investment Plan (SIP) with a small amount every month, or you can invest a lump sum amount at once.

By following these simple steps you can start building your wealth today. Regular investing is the secret key to financial freedom.

Conclusion

Building wealth for your future does not have to be a stressful job. Flexi cap funds offer a beautiful balance of safety and high growth. By allowing experts to move your money across different company sizes, you get peace of mind and great returns.

Whether you choose a large fund like Parag Parikh or a fast growing one like Bank of India, the key is to stay invested. Start your Mutual Fund journey with Pocketful – no brokerage, diverse fund options, and a seamless investing experience.

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10	History of Mutual Funds in India

Frequently Asked Questions (FAQs)

Meaning: What exactly is a flexi cap mutual fund?
The fund manager has the flexibility to invest your money in large, mid, or small companies without any restrictions.
Benefits: Why should you invest in flexi cap funds?
These funds give you the benefit of diversification. They lower your risk during bad market conditions.
How do you use flexi cap funds in your portfolio?
You should use a flexi cap fund as your main, core investment. Instead of buying four different mutual funds, you can just put most of your monthly savings into one good flexi cap fund for the long term.
Is there a lock in period for flexi cap funds?
No, there is no mandatory lock in period for standard flexi cap funds. You can take your money out anytime.
What is the minimum amount required to start investing?
You do not need a lot of money to start. One can start a monthly SIP with just 100 rupees.

April 29, 2026

Top 10 Best Equity Mutual Funds in India

When you invest in mutual funds, professional experts manage your hard-earned money. They pool money from many investors and buy shares of different companies. Finding the Best Equity Mutual Funds can seem like a tough task with so many options available today. But do not worry, because we have simplified the process for you.

In this blog, we will guide you through everything you need to know about equity mutual funds. We have carefully selected the top equity mutual funds based on their past performance, fund size, and risk levels. By the end of this read, you will easily know which are the best equity mutual funds to invest in for your future goals. Let us dive right in and explore how you can make your money work harder for you.

List of Top 10 Best Equity Mutual Funds

To understand this , we have put together a list of the top 10 equity mutual funds. We looked at their returns over 1 year 3 years 5 years and 10 years to see their consistency. It also includes minimum investment required, their Fund Size (Assets Under Management or AUM), their current Net Asset Value (NAV), and the exit load.

Fund Name	Minimum Investment (INR)	Fund Size (AUM)	NAV (INR)	Exit Load
Parag Parikh Flexi Cap Fund	1,000	₹1,28,966 Cr	91.57	2.00%
Quant Small Cap Fund	5,000	₹25,821 Cr	268.39	1.00%
Nippon India Small Cap Fund	5,000	₹61,809 Cr	186.33	1.00%
SBI PSU Fund	5,000	₹5,891 Cr	38.73	0.50%
UTI Nifty 50 Index Fund	1,000	₹24,433 Cr	169.13	Nil
Mirae Asset Large Cap Fund	5,000	₹35,343 Cr	124.18	1.00%
Canara Robeco Bluechip Fund	100	₹15,235 Cr	70.69	1.00%
Kotak Emerging Equity Fund	100	₹55,675 Cr	158.95	1.00%
HDFC Mid Cap Fund	100	₹85,358 Cr	218.21	1.00%
ICICI prudential Bluechip	100	₹69,948 Cr	119.47	1.00%

(Note: The returns data represents the trailing historical performance as on 17 April 2026. Data are sourced from Value Research for the direct plans)

Overview of Best Equity Mutual Funds in India

1. Parag Parikh Flexi Cap Fund

This fund is extremely popular because of its unique investing style. The fund managers invest your money in Indian companies as well as foreign giants like Microsoft and Amazon.

Fund Name	1 Yr Return (CAGR)	3 Yr Return (CAGR)	5 Yr Return (CAGR)
Parag Parikh Flexi Cap Fund	7.22%	19.00%	17.51%

2. Quant Small Cap Fund

If you have a high appetite for risk, this small cap fund might catch your eye. The fund manager actively buys and sells stocks based on changing market trends.

Fund Name	1 Yr Return (CAGR)	3 Yr Return (CAGR)	5 Yr Return (CAGR)
Quant Small Cap Fund	6.00%	20.85%	23.86%

3. Nippon India Small Cap Fund

This is one of the largest small cap funds in India today. It has a brilliant 10-year track record of multiplying investor wealth.

Fund Name	1 Yr Return (CAGR)	3 Yr Return (CAGR)	5 Yr Return (CAGR)
Nippon India Small Cap Fund	8.65%	21.71%	23.61%

4. SBI PSU Fund

This is a sectoral fund that invests only in Public Sector Undertakings. These are companies where the government holds a majority share.

Fund Name	1 Yr Return (CAGR)	3 Yr Return (CAGR)	5 Yr Return (CAGR)
SBI PSU Fund	19.87%	34.81%	29.21%

5. UTI Nifty 50 Index Fund

This fund simply copies the Nifty 50 index, investing in the top 50 companies of India. Because it is passively managed, the fees you pay are very low, and there is zero exit load.

Fund Name	1 Yr Return (CAGR)	3 Yr Return (CAGR)	5 Yr Return (CAGR)
UTI Nifty 50 Index Fund	4.2%	11.72%	11.63%

6. Mirae Asset Large Cap Fund

This fund focuses on the biggest and most stable companies in the stock market. It is a great choice for conservative investors looking for steady growth.

Fund Name	1 Yr Return (CAGR)	3 Yr Return (CAGR)	5 Yr Return (CAGR)
Mirae Asset Large Cap Fund	5.51%	12.79%	12.17%

7. Canara Robeco Bluechip Equity Fund

This fund strictly invests in the top 100 bluechip companies. It aims to provide capital appreciation with relatively lower risk compared to small cap funds. Large cap funds.

Fund Name	1 Yr Return (CAGR)	3 Yr Return (CAGR)	5 Yr Return (CAGR)
Canara Robeco Bluechip Fund	3.96%	14.78%	13.12%

8. Kotak Emerging Equity Fund

The portfolio is nicely diversified across sectors like financial services and healthcare. It strikes a great balance between the safety of large caps and the high growth of small caps.

Fund Name	1 Yr Return (CAGR)	3 Yr Return (CAGR)	5 Yr Return (CAGR)
Kotak Emerging Equity Fund	16.79%	22.92%	20.20%

9. HDFC Mid Cap Opportunities Fund

This scheme holds the title of being the largest mid cap fund in India. It is widely trusted by retail investors across the country.

Fund Name	1 Yr Return (CAGR)	3 Yr Return (CAGR)	5 Yr Return (CAGR)
HDFC Mid Cap Fund	14.74%	25.24%	22.73%

10. ICICI Prudential Bluechip Fund

This is another highly trusted large cap fund in the mutual fund industry. It protects your capital much better than smaller funds during severe market corrections.

Fund Name	1 Yr Return (CAGR)	3 Yr Return (CAGR)	5 Yr Return (CAGR)
ICICI prudential Bluechip	6.03%	16.83%	15.94%

Read Also: Best Long-Term Mutual Funds

Advantage and Disadvantage of Equity Mutual Fund

We have listed them below to help you set realistic expectations.

Advantages

Professional Management: You do not need to be a stock market expert to invest. Dedicated professionals do all the complex research and manage your money for you.
Diversification: Your money is spread across many different companies and sectors. If one company does poorly, the profits from other companies can cover the loss.
Power of Compounding: By staying invested for a long time, you earn returns on top of your previous returns. This helps your money grow at a much faster rate.

Disadvantages

Market Risk: There are no guaranteed returns. The value of your investment is directly tied to the performance of the stock market.
Management Fees: You have to pay an expense ratio to the fund house. Over many years, this fee can reduce your overall profits.
Tax Implications: When you sell your mutual fund units for a profit, you have to pay capital gains tax. This can slightly reduce your final take-home amount.

Factors to Consider While Choosing an Equity Mutual Fund

Following are some factors which you need to check.

Fund Manager Experience: Investors should check if the manager had a good past track record of handling money during tough market conditions.
Risk Profile: Understand the category of the fund. Large cap funds have lower risk, while small cap funds have very high risk.
Exit Load: This is a penalty fee charged if you withdraw your money too early. Most equity funds charge a 1% fee if you sell within one year.

Read Also: Best SIP Mutual Funds in India

Who Should Invest in Equity Mutual Funds

Equity mutual funds are not meant for everyone. You need to understand your own financial situation before putting your money into the stock market. You should invest in equity mutual funds if you have a long-term goal, these funds are suited for people who want to beat inflation.

Finally, you must have a decent appetite for risk. When the market falls and If you easily panic and sell your investments, you might end up making a loss. If you can stay calm, equity funds can reward you handsomely.

How to Invest in Equity Mutual Fund

Investing in mutual funds has become incredibly simple today.

Choose a Reliable Platform
Start by selecting a trusted platform like Pocketful for a smooth investing experience.
Complete Your KYC
Submit your PAN card, Aadhaar card, and a photograph online for quick verification.
Create Your Account
Sign up and activate your investment account within minutes.
Explore Equity Funds
Browse different categories of equity mutual funds based on your goals and risk appetite.
Start Investing
Invest via lumpsum or SIP (Systematic Investment Plan) as per your convenience.
Track & Manage
Monitor your investments easily through the dashboard and stay updated with performance.

SIP you invest an amount every month, the bank automatically deducts the money from your account.

Conclusion

Wealth isn’t built overnight. It takes a solid plan and a bit of grit. Equity mutual funds offer a fantastic entry point into the indian market. Whether you prefer the safety of large cap funds or the risky growth of small cap funds there is an option for everyone.

To enter into indian market Pocketful is a trusted and user friendly platform that makes investing very easy. You can enjoy zero account opening charges and zero annual maintenance.

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Frequently Asked Questions (FAQs)

What is the meaning of an Equity Mutual Fund?
Equity mutual fund collects money from many investors to buy shares of companies listed on the stock market and It is managed by a professional fund manager.
What are the key advantages of investing in equity mutual funds?
The primary benefits include professional money management, diversification and Most importantly they offer the potential to generate high returns over the long term.
How to use equity mutual funds for my financial goals?
One can use equity mutual funds for long-term goals that are at least 5 to 7 years away. You can start a Systematic Investment Plan (SIP) or lump sum. This helps to save money for your retirement or children’s education.
Do I need a large amount of money to start investing?
No, In a mutual fund you can start investing your money in SIP with as little as ₹100 or ₹500 per month.
Are equity mutual funds safe for beginners?
While all stock market investments carry some risk, equity mutual funds are generally safer than buying individual stocks directly.

April 22, 2026

What is Association of Mutual Funds in India (AMFI)?

In India, mutual funds are no longer limited solely to large investors by February 2026, the industry’s AUM had surpassed ₹82 lakh crore, reflecting the growing confidence of the public. In this context, it becomes essential to understand what AMFI is and what role it plays within the mutual fund industry, as this very body helps ensure the industry operates effectively.

What is AMFI Full Form?

The full form of AMFI is the “Association of Mutual Funds in India.” Within the mutual fund industry, AMFI is an organization that represents all Asset Management Companies (AMCs) and assists in maintaining industry standards.

What is AMFI in Mutual Fund Industry?

In the mutual fund industry, AMFI is an association where almost all mutual fund companies are affiliated. Its job is simple: to ensure that the industry’s operations are fair and everyone follows a set standard. AMFI establishes guidelines and a Code of Conduct, which companies and distributors must adhere to. This reduces mis-selling and maintains investor confidence. An important point: AMFI itself is not a regulatory authority. The actual regulation is handled by SEBI. AMFI simply ensures that the industry operates properly.

Mutual Fund Industry in India is Regulated By Whom?

SEBI is responsible for regulating the mutual fund industry in India. This authority formulates the rules and ensures that all fund houses adhere to them correctly.

SEBI vs AMFI

Feature	SEBI	AMFI
Role	Regulator	Industry Body
Power	Legal authority	Advisory
Work	Formulating and Enforcing Rules	Standards and Awareness

History & Formation of AMFI

AMFI was established in 1995. At that time, the mutual fund industry in India was growing gradually, but it lacked a clear structure. Various companies were operating according to their own norms, making it difficult to maintain uniform standards. Consequently, a need was felt for a body that could bring all mutual fund companies together and establish a common framework for operations and this is precisely how the concept of AMFI emerged.

Why AMFI Was Needed

To introduce uniform standards across the industry
To enhance transparency for investors
To improve coordination among companies
To curb malpractices (such as mis-selling)

Objectives of AMFI

Investor Protection : AMFI’s primary focus is to ensure that investors are treated fairly and equitably. To this end, it emphasizes transparency and the provision of accurate information within the industry.
Mutual Fund Awareness : AMFI continuously conducts awareness campaigns to educate the public about mutual funds, thereby enabling new investors to make informed decisions.
Ethical Practices (Code of Conduct) : AMFI establishes a Code of Conduct that companies and distributors are required to adhere to. The objective is to prevent mis-selling and to ensure the provision of sound advice.
Industry Standardization : AMFI sets guidelines to ensure uniform operational practices across the entire industry, thereby maintaining an organized and consistent ecosystem.
Data Transparency : AMFI regularly releases industry data (such as AUM), providing investors with a clear picture of the sector and fostering greater trust.

Major Functions of AMFI

ARN Registration : AMFI issues an ARN (AMFI Registration Number) to mutual fund distributors. This ensures that only registered and verified individuals sell or recommend funds to investors.
Code of Conduct : AMFI establishes a clear Code of Conduct that companies and distributors are required to follow. Its primary objective is to ensure fair dealing with investors and to prevent mis-selling.
Investor Awareness : AMFI educates the public about mutual funds through awareness campaigns. This provides new investors with accurate information, enabling them to make better decisions.
Industry Data : AMFI regularly publishes industry data, such as AUM (Assets Under Management) and fund trends. This assists investors and market participants in understanding the current state of the industry.
Certification & Support : AMFI helps maintain a structured process for the certification and registration of distributors. This ensures the maintenance of quality and professionalism within the industry.

AMFI Certification & ARN Explained

What is ARN?

ARN (AMFI Registration Number) is a unique registration number assigned to mutual fund distributors. Without it, no individual can officially sell or recommend mutual funds.

ARN Registration Process (Step-by-Step)

Step	Process
1	First, you need to pass the NISM-Series-V-A (Mutual Fund Distributors) exam.
2	After clearing the exam, you need to apply for registration with AMFI.
3	Required documents (ID proof, photograph, etc.) must be submitted.
4	Upon completion of the verification process, an ARN number is allotted.
5	Subsequently, the distributor can legally sell mutual funds.

Common Myths About AMFI

Myth	Reality
AMFI regulates mutual funds.	Mutual funds are regulated by SEBI, not AMFI.
AMFI is a government body.	AMFI is a non-profit industry association, not a government body.
AMFI guarantees returns.	AMFI has nothing to do with returns; returns depend on the market.
AMFI formulates and enforces rules.	SEBI frames the rules, while AMFI merely maintains guidelines and standards.
AMFI approves funds.	SEBI handles fund approval and regulation.
AMFI manages investors’ money.	AMFI does not handle funds; this task is performed by fund houses (AMCs).
Investing in AMFI is essential.	Investors do not have any direct role in AMFI.
AMFI resolves complaints directly.	SEBI is the primary platform for complaints, while AMFI plays a supporting role.

AMFI’s Role in Financial Awareness

From a practical perspective, AMFI’s greatest impact is not limited solely to the industry; it also lies in fostering financial awareness. Over the past few years particularly in Tier-2 and Tier-3 cities the reach of mutual funds has expanded significantly, a development to which AMFI’s campaigns have contributed immensely. AMFI’s initiatives such as awareness drives and simplified messaging have helped new investors understand how mutual funds function and why long-term investing is essential.

Real Impact

The number of SIP investors from smaller cities is consistently on the rise.
Reaching first-time investors has become easier through digital campaigns.
A gradual improvement in financial literacy has been observed.

Conclusion

AMFI plays a crucial role in providing a proper structure and discipline to the mutual fund industry, while the responsibility for regulation lies with SEBI. If you invest in mutual funds, it is essential to understand AMFI’s basic role so that you can make sound and informed decisions. For market insights & latest news, download Pocketful – offering zero brokerage on delivery, zero AMC, and advanced tools for F&O trading.

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Frequently Asked Questions (FAQs)

What is the full form of AMFI?
The full form of AMFI is the Association of Mutual Funds in India.
What is AMFI in the context of mutual funds?
AMFI is an industry body that maintains standards and guidelines for mutual fund companies.
Who regulates the mutual fund industry in India?
In India, mutual funds are regulated by SEBI.
Is AMFI a government organization?
No, AMFI is a non-profit association; it is not a government body.
Does AMFI guarantee returns?
No, returns depend on market conditions; AMFI does not provide any guarantees.

April 9, 2026

Best Passive Mutual Funds in India 2026

Most of the funds you invest in require active monitoring. Missing any crucial trend or news can impact your returns greatly. But the problem is that many investors look for options that require low monitoring; they aim for safer choices with stable and good returns. This is where passive funds play an important role.

This makes them a good choice for long-term savings and investing. But before you plan to invest, the question is which are the best passive funds that you should also look for. Also, you need to know what is passive investing along with the difference between active and passive funds. So, let us explore all the details you need here in this guide.

What Are Passive Funds?

Passive funds are mutual funds designed to replicate the performance of a specific market index. They are not here with the aim of beating the index performance. These funds copy the benchmark that they follow. It can be the Nifty 50, some sectoral index, or any other. The ratio of the assets will be similar to the index, which helps with tracking.

Since these funds follow the index, there is no need for highly active management. This also reduces the cost of the fund, which directly helps you with better returns. For a balanced portfolio that helps with wealth, portfolio, and outcomes, these are a good addition.

Key Features of Passive Funds

Track a specific market index such as Nifty 50, Sensex, or sectoral indices.
Lower expense ratios due to minimal active management.
Transparent portfolio as holdings replicate the index composition.
Diversification across multiple companies within the index.
Lower portfolio turnover compared to actively managed funds.

Pros of Passive Funds

Lower management costs compared to actively managed funds.
Reduced dependence on fund manager decisions.
Diversified exposure to multiple companies through the index.
Straightforward investment structure that is easy to understand.
Suitable for long-term investors seeking market-linked growth.

Cons of Passive Funds

Cannot outperform the index they track.
Returns depend entirely on overall market performance.
Limited flexibility during market downturns.
Tracking error may cause slight variation from index returns.
No opportunity to benefit from active stock selection.

But before we explore the top choices for you, let us explore the active and passive fund differences.

Difference Between Active and Passive Funds

When you talk about the active and passive funds, you would see that the basic aspects are the same. The difference mainly lies in how these are managed. So, here are the key points that you must know:

Basis	Active Funds	Passive Funds
Investment Approach	Fund managers actively select and manage stocks to outperform the market.	The fund replicates a market index and follows its composition.
Objective	Aim to generate higher returns than the benchmark index.	Aim to match the performance of the index being tracked.
Management Style	Requires continuous research, analysis, and portfolio adjustments.	Minimal intervention as the portfolio mirrors the index.
Expense Ratio	Usually higher due to active management and research costs.	Generally lower because there is limited active management.
Risk Level	Performance depends on fund manager decisions and strategy.	Performance closely follows the overall market movement.
Return Potential	Possibility to outperform the market if the manager performs well.	Returns are usually similar to the index performance.

Top Passive Funds to Invest in 2026

As a passive investor, you will come across hundreds of options that are worthy of investing in. But only a few of these actually stand out. These are as follows:

Fund Name	AUM (₹ Cr)	NAV (₹)	Expense Ratio (%)	Sharpe Ratio
UTI Nifty 50 Index Fund	26,681.34	161.87	0.2	0.04
HDFC Nifty 50 Index Fund	22324.27	225.11	0.2	0.25
ICICI Pru Nifty 50 Index Fund	15,390.61	243.36	0.19	0.03
SBI Nifty Index Fund	11879.12	215.16	0.19	0.02
HDFC BSE Sensex Index Fund	8869.18	709.22	0.2	0.04
UTI Nifty200 Momentum 30 Index Fund	8711.89	19.65	0.43	0.18
ICICI Pru Nifty Next 50 Index Fund	8396.38	60.03	0.31	0.4
UTI Nifty Next 50 Index Fund	6245.96	23.93	0.35	0.41
Navi Nifty 50 Index Fund	3872.53	15.18	0.06	0.04
Nippon India Index Fund Nifty 50 Plan	3160.460	42.450	0.07	0.26

(Data as of 15 Mar 2026)

Overview of Best Passive Mutual Funds

1. UTI Nifty 50 Index Fund

This fund tracks the Nifty 50 index. It does so by investing in the same companies with similar weightage. The structure allows investors to invest ina fund that follows the top index. This helps with better returns and management as well.

It is often used as a core holding in long-term portfolios. Since the strategy simply mirrors the index, costs remain relatively low while investors gain diversified exposure to leading large-cap businesses.

1 Year Return (%)	3 Year Return (%)	5 Year Return (%)
4.32	11.55	10.1

(Data as of 15 Mar 2026)

2. HDFC Nifty 50 Index Fund

This fund aims to replicate the Nifty 50. The fund follows this by holding all its constituent stocks in proportions similar to the index. The objective is to deliver returns that remain closely aligned with the benchmark.

It offers a simple way to access India’s large-cap equity market. The rule-based approach also makes it suitable for investors who prefer a stable and low-maintenance investment strategy.

1 Year Return (%)	3 Year Return (%)	5 Year Return (%)
4.27	11.51	10

(Data as of 15 Mar 2026)

3. ICICI Pru Nifty 50 Index Fund

This fund follows a passive strategy. It is designed to closely track the Nifty 50 index. By holding the same basket of companies it attempts to match the index performance.

The approach provides broad exposure to India’s large-cap segment. Many investors use it as a foundational component in their equity portfolios. This aims to capture overall market growth over time.

1 Year Return (%)	3 Year Return (%)	5 Year Return (%)
4.27	11.51	13.99

(Data as of 15 Mar 2026)

4. SBI Nifty Index Fund

This fund seeks to replicate the performance of the Nifty 50. This fund aims at keeping management costs relatively low. The portfolio includes the same companies that form part of the index.

It is commonly selected by investors who want straightforward exposure to India’s top companies. Many use it through systematic investment plans or long-term allocations to participate in market growth.

1 Year Return (%)	3 Year Return (%)	5 Year Return (%)
4.24	11.52	10

(Data as of 15 Mar 2026)

5. HDFC BSE Sensex Index Fund

This fund tracks the S&P BSE Sensex. This means it consists of 30 well-established companies across key sectors of the Indian economy. These businesses are widely regarded as leading blue-chip companies.

The structure provides focused exposure to large-cap stocks. This makes it a stable and even more efficient fund for your investment.

1 Year Return (%)	3 Year Return (%)	5 Year Return (%)
1.9	9.63	9

(Data as of 15 Mar 2026)

6. UTI Nifty200 Momentum 30 Index Fund

This fund follows the Nifty200 Momentum 30 index. It selects stocks from the Nifty 200 universe based on strong recent price performance.

The strategy focuses on companies showing momentum in their price trends. This approach offers a good potential but it can also involve greater volatility compared to traditional index funds.

1 Year Return (%)	3 Year Return (%)	5 Year Return (%)
6.65	16.54	14.6

(Data as of 15 Mar 2026)

7. ICICI Pru Nifty Next 50 Index Fund

This fund replicates the Nifty Next 50 index. It includes companies ranked just below the Nifty 50 in terms of market capitalisation.

These businesses are often viewed as potential future large caps. As a result, the fund may appeal to investors seeking higher growth opportunities, though it may involve relatively higher risk.

1 Year Return (%)	3 Year Return (%)	5 Year Return (%)
10.2	20.15	14.9

(Data as of 15 Mar 2026)

8. UTI Nifty Next 50 Index Fund

This fund invests in the companies that form the Nifty Next 50 index. It focuses on keeping the same composition and weightage as the benchmark.

It is often used alongside a Nifty 50 allocation. This is to broaden market exposure. Since many of these companies are still expanding, the portfolio may experience stronger growth but also higher market fluctuations.

1 Year Return (%)	3 Year Return (%)	5 Year Return (%)
10.31	20.31	13.57

(Data as of 15 Mar 2026)

9. Navi Nifty 50 Index Fund

This fund aims to closely track the Nifty 50. It also focuses on maintaining a very low expense ratio. The portfolio mirrors the benchmark index quite close.

It is known for its cost efficiency. This appeals to investors who prioritize low fees and long-term index investing. It provides diversified exposure to India’s major large-cap companies.

1 Year Return (%)	3 Year Return (%)	5 Year Return (%)
4.39	11.6	9.4

(Data as of 15 Mar 2026)

10. Nippon India Index Fund Nifty 50 Plan

This fund follows the Nifty 50 index. It manages the same allocation and weightage as well which is the best aspect.

The strategy offers exposure to a diversified basket of leading Indian companies. It is commonly used by investors seeking market-linked returns through a disciplined passive investment approach.

1 Year Return (%)	3 Year Return (%)	5 Year Return (%)
4.39	11.57	10

(Data as of 15 Mar 2026)

How to Select the Right Passive Fund

Choosing a passive fund may look straightforward. But there are still some points that you should consider:

Check the expense ratio. Since passive funds aim to match the index, lower costs help you keep a larger share of the returns.
Look at the tracking error. Funds with lower tracking error usually follow the benchmark index more closely.
Understand the index being tracked. Some funds track the Nifty 50 or Sensex, while others follow indices like Nifty Next 50, which may carry different risk levels.
Review the fund’s assets under management (AUM). Funds with larger AUM often have better liquidity and operational efficiency.
Decide between an index fund and an ETF. Index funds allow SIP investments, while ETFs trade on the stock exchange like regular shares.
Check the exit load and other conditions. Some funds may charge a fee if you redeem within a certain period.

Read Also: Best Liquid Mutual Funds in India

Conclusion

Passive funds have become an important part of modern investment portfolios. These funds provide stability and a base for your portfolio. But to ensure this, you need to make a choice that is correct. This is where you need the right platform with you. Pocketful allows you to explore the options well and make the investment calls to stay in sync with your needs.

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Frequently Asked Questions (FAQs)

What is passive investing in mutual funds?
Passive investing is a strategy where a mutual fund tracks a specific market index. The fund aims to replicate the performance and overpass it. This makes them safer.
Are passive funds better than active funds?
Passive funds and active funds serve different purposes. Passive funds offer lower costs and market-matching returns. So, if you are an investor looking for a fund with stability, passive funds are better.
Who should invest in passive funds?
Passive funds are suitable for long-term investors who prefer a simple investment strategy, lower expense ratios, and returns that closely follow overall market performance.
How are passive funds different from index funds?
Passive funds are investment funds that aim to replicate the performance of a market index. Index funds are a type of passive funds that track indices. Overall, passive funds are safer.
Are passive funds safe for beginners?
Yes. Passive funds are often considered suitable for beginners. They do not need a regular following which makes these are great choice.

March 24, 2026

Overnight Funds vs Liquid Funds: Which Is Better?

In case you have some extra money and want to invest for the short term with an objective to maintain liquidity and get some return. There are various options available in the debt category of mutual funds. Among them, the most preferred investment options to park idle money are overnight and liquid funds.

In today’s blog post, we will give you an overview of overnight funds and liquid funds, along with their key differences.

What are Overnight Funds?

Overnight funds are a category of debt mutual funds that primarily invest money in fixed-income instruments with a maturity of just one day. As investments are made in very short-term debt instruments, the investor considers them the safest option to park their money.

Features of Overnight Funds

The key features of overnight funds are as follows:

One-Day Maturity: The overnight fund invests its money in securities that mature within one day.
Low Return: The returns are low because the maturity of the instrument is extremely short i.e. 1 day only and the amount gets reinvested daily.

Low Interest Rate Risk: The interest rate risk in the overnight fund is very low, as the funds are least affected by changes in interest rates.
Very Low Credit Risk: Overnight funds generally invest in high-quality debt instruments, reducing the risk of default.

What are Liquid Funds?

A liquid fund is a debt mutual fund offered by an asset management company which invests the money collected from the investor in fixed-income securities having a maturity of up to 91 days. The objective of these funds is to provide liquidity along with returns. It invests the money in instruments such as commercial papers, treasury bills, certificates of deposits, etc. A liquid fund offers a slightly better return than a savings account.

Features of Liquid Fund

The key features of a liquid fund are as follows:

Liquidity: Investment in a liquid fund is highly liquid. One can easily redeem their money, and the amount is credited to their bank account within one working day.
Better Returns: Liquid funds often yield higher returns than savings accounts. This makes it attractive for investors who keep their money idle in their bank accounts.
No Lock-in: Liquid funds do not come with any lock-in period. It allows investors to withdraw their money at any time.
Professional Management: Investments in liquid funds are managed by the asset management companies’ professional, experienced fund managers.

Difference between Overnight and Liquid Funds

The key difference between overnight and liquid funds is as follows:

Particulars	Overnight Funds	Liquid Funds
Duration of Investment	The overnight funds invest in securities having a maturity of 1 day.	A liquid fund invests the money in debt securities having a maturity of up to 91 days.
Risk	These funds have the lowest risk among all other debt mutual funds.	A liquid fund also carries lower risk, but has higher risk than overnight mutual funds.
Volatility due to Interest Rates	There are no or low risks related to changes in interest rates on overnight funds.	Liquid funds generally have slightly higher interest rate risk than overnight funds due to longer maturity.
Returns	Overnight funds have the lowest returns.	Liquid funds post higher returns than overnight funds.
Default Risk	These funds have almost zero default risk.	As the securities have a slightly higher maturity, they carry a higher default risk.
Ideal Investment Duration	The investment in overnight funds is suitable for 1 to 7 days.	Investment in a liquid fund is suggested for 3 to 6 months.
Suitability	Investment in overnight funds is suitable for big institutions.	Liquid funds are suitable for retail or individual investors to park their money.
Expense Ratio	Overnight funds have a lower expense ratio.	Liquid funds have a slightly higher expense ratio than overnight funds.
Portfolio Turnover Ratio	Overnight funds have a higher portfolio turnover ratio as the money is reinvested every day.	Liquid funds have a moderate portfolio turnover ratio as the securities in the portfolio are held for a few periods.

Where should you invest your money: Overnight or Liquid Fund

The decision of whether to invest in the Overnight Funds or Liquid Funds largely depends on how long you want to invest and your preference for risk. When you want to invest for a very short time, say a few days, and you want to have maximum safety with almost no interest rate risk, then overnight funds may be an appropriate choice since they invest in securities that mature after only a single day. Alternatively, when you are looking at a period of a few weeks or up to a few months and aiming at relatively higher returns, and the risk is also not that high, liquid funds can be a better option. Overnight funds are mostly suitable for overnight parking of money, in simple terms, whereas liquid funds are best for short-term investments and emergency funds.

Conclusion

On a concluding note, both overnight funds and liquid funds are suitable options for investors who want to park their money for the short term with an objective to earn a return with liquidity. These two funds are low risk and offer high liquidity, which typically means you can easily withdraw your money as needed. Overnight funds invest in securities that have a maturity of just one day, while liquid funds invest money in securities that have a maturity of up to 91 days. However, choosing among them depends on the investor’s risk profile and investment horizon; therefore, it is advisable to consult your investment advisor before making any investment decision.

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Frequently Asked Questions (FAQs)

Are overnight funds safer than liquid funds?
Both liquid funds and overnight funds are safer investment options. But overnight funds are slightly safer than liquid funds as they invest in fixed income securities that have a maturity of one day.
Which offers higher returns among overnight funds and liquid funds?
Liquid funds offer slightly higher returns than overnight funds, because liquid funds invest in fixed income securities with longer maturity and higher coupons.
Do liquid funds have any lock-in period?
No, liquid funds do not have any lock-in period, but some liquid funds have an exit load.
Do overnight funds and liquid funds offer guaranteed returns?
No, neither overnight nor liquid funds offer guaranteed returns. As the returns of these funds are market-linked.
Can I start SIP in overnight and liquid funds?
Yes, you can easily start a SIP in overnight and liquid mutual funds.

March 15, 2026

Best Liquid Mutual Funds in India 2026

There is a type of debt fund that invests your money in short-term instruments like treasury bills, commercial papers, and certificates of deposit. These securities usually mature within 91 days, making the interest rate risk low and helping the fund maintain a stable NAV (Net Asset Value). Because of this short maturity, liquid funds are designed to give you quick access to your money with limited volatility.

SEBI rules limit these investments to a maximum maturity of 91 days and also keep a check on expense ratios, which tend to be quite low for liquid funds. Exit loads are either zero or very small for a few initial days, so most of your capital stays intact even if you need the money on short notice. The main objective remains to protect your capital while earning comparatively better returns than a savings account.

In these funds the investment is done in high credit quality funds or generally funds that have AAA and A1+ rated securities to keep default risk low. In simpler terms, liquid mutual funds act like a smarter version of a savings account. Your Investment stays relatively safe, which can be accessed quickly while making you a decent amount of money in return.

Top 10 Liquid Mutual Funds in India 2026

Fund Name	AUM (Rs.Cr.)	Expense Ratio	Min. Investment (Rs.)
Axis Liquid Direct Growth	48,415	0.11%	100
HDFC Liquid Direct Growth	72,501	0.2%	100
Aditya Birla SL Liquid Direct	60,285	0.21%	100
Union Liquid Direct Growth	8,025	0.07%	5,000
Quant Liquid Direct Growth	1,327	0.22%	5,000
ICICI Prudential Liquid Direct Growth	60,474	0.2%	99
Nippon India Liquid Direct	33,500	0.2%	1,000
Kotak Liquid Direct Growth	43,974	0.2%	1,000
SBI Liquid Direct Growth	66,511	0.19%	500
UTI Liquid Direct Growth	31,333	0.15%	500

(Data as of 11 March 2026)

Overview of Top 10 Liquid Mutual Funds in India 2026

1. Axis Liquid Direct Growth

It is a very large and popular scheme where investment is mainly done in AAA-rated T-bills, CDs, and CPs, with an average maturity of around 45 days. Low expenses and a strong track record make it a common choice for emergency funds and short-term parking.

1 Year return	3 Year return	5 Year return
6.44%	7.05%	6.01%

(Data as of 11 March 2026)

2. HDFC Liquid Direct Growth

This is one of the largest liquid funds by AUM, with most of its portfolio in high-quality bank certificates of deposit and treasury bills. Its scale and cautious investment style make it attractive for investors who prioritise stability and strong liquidity.

1 Year return	3 Year return	5 Year return
6.39%	6.99%	5.95%

(Data as of 11 March 2026)

3. Aditya Birla Sun Life Liquid Direct

This fund gives investors a mix of T-bills, CDs, and CPs, with solid and sizable returns. The fund has shown steady performance over three and five years, often slightly outpacing the category average.

1 Year return	3 Year return	5 Year return
6.44%	7.07%	6.03%

(Data as of 11 March 2026)

4. Union Liquid Direct Growth

This is a mid-sized fund with funds allocated in PSU and government-backed papers, giving investors a comfort factor on credit quality. It works well for medium-ticket surplus amounts.

1 Year return	3 Year return	5 Year return
6.40%	7.04%	6.01%

(Data as of 11 March 2026)

5. Quant Liquid Direct Growth

This is a smaller but an active fund where there is a limited exposure to higher-yielding corporate CPs. In this fund returns are competitive, but it may suit investors who are comfortable with the active actions.

1 Year return	3 Year return	5 Year return
6.28%	6.92%	6.09%

(Data as of 11 March 2026)

6. ICICI Prudential Liquid Direct Growth

This is one of the largest and most established liquid funds that allows instant redemption up to a certain amount. The fund emphasises more on T-bills to prevent higher risk, making it beneficial for managing short-term cash needs.

1 Year return	3 Year return	5 Year return
6.36%	7.00%	5.96%

(Data as of 11 March 2026)

7. Nippon India Liquid Direct

If you are an investor that is looking for credit research and high-rated securities then this is the most suitable fund for you, as this fund results in a comparable stable portfolio. It’s preferred for new liquid investors who prefer a well-known brand.

1 Year return	3 Year return	5 Year return
6.41%	7.03%	6.00%

(Data as of 11 March 2026)

8. Kotak Liquid Direct Growth

This fund holds a significant portion in bank CDs and other top-rated securities, aiming to balance safety with slightly better yields. It has managed past periods of market stress without major issues.

1 Year return	3 Year return	5 Year return
6.38%	7.00%	5.97%

(Data as of 11 March 2026)

9. SBI Liquid Direct Growth

Backed by a PSU sponsor, this fund invests heavily in government securities and high-quality corporate debt. It also offers SIP, SWP, and STP options, which help investors who want to gradually shift money into other schemes.

1 Year return	3 Year return	5 Year return
6.31%	6.96%	5.94%

(Data as of 11 March 2026)

10. UTI Liquid Direct Growth

This is a veteran liquid fund where investments are done sensibly, as this fund emphasizes liquidity buffers like overnight repos. Here the focus is on steady, low-volatility returns instead of aggressively chasing higher yields.

1 Year return	3 Year return	5 Year return
6.44%	7.05%	6.01%

(Data as of 11 March 2026)

Types of Instruments Liquid Funds Invest

Liquid funds do not invest in infrastructure companies or equities; they build a diversified basket of short-term debt instruments published by governments, banks, and large companies. The main instruments are:

Treasury Bills (T-Bills): Short-term government securities that mature within 91 days. They carry almost zero default risk and offer investors a yield around 6.3 – 6.5%.
Commercial Papers (CPs): Companies issue short-term debt with strong balance sheets. These usually offer slightly higher returns than T-bills and are often rated A1+ for safety.
Certificates of Deposit (CDs): The banks and a few other financial institutions issue the time deposits. Maturities range from a few weeks to 90 days and are backed by the strength of the banking system.
Repo and Reverse Repo: Overnight lending and borrowing arrangements with other institutions. These instruments add day-to-day liquidity to the portfolio and help meet redemption requests smoothly.

Generally, the best liquid mutual funds put 80% to 85% of their portfolio investments in financial sector debt like government securities, bank CDs, and high-quality corporate CPs. The remaining part usually goes into other AAA-rated instruments and overnight repos. This blend aims to deliver a balance of safety, liquidity, and reasonable yield.

Advantages of Investing in Liquid Funds

High Liquidity: Investors can instantly withdraw their savings up to a limited amount and the process generally takes T+1 day.
Better Returns: These funds give returns ranging from 6%-7% which is higher as compared to 3%-4% in savings accounts.
Low Volatility: Investments in short-term maturities with high-rated instruments result in minimal daily NAV fluctuations.
Useful for Emergency Funds: As investors can withdraw their savings instantly, these funds become very accessible.

Disadvantages of Investing in Liquid Funds

Lower Returns: These funds give lower returns as compared to equities and they are not designed for long-term wealth creation.
Credit and Interest Rate Risk: Although these are small, the risk associated is not exactly zero especially if a fund takes exposure to weaker issuers.
Taxed as Debt: As per the new rules the profit gained from these funds are taxed as per general income slab.

Why Invest in Liquid Mutual Funds?

These types of funds are a perfect mix of savings accounts and longer term debt options. These are best suitable for investors if they are looking for:

Putting extra cash for a few weeks or months.
Building an emergency fund without locking your savings.
Keeping funds ready for future opportunities

In savings accounts people get a return of 3-4% but in top liquid schemes a return of 6.5% – 7% can be achieved, especially on large amounts. Unlike fixed deposits, you can take out the amount saved without any penalty and investors get daily returns instead of quarterly or annually.

This possesses a substantial portion in bank CDs and other top-rated securities. The goal is to balance safety with yields. It successfully navigated past market stress without major issues

Why Liquid Funds Matter in 2026

Repo rate in India is around 6.5%, which means short-term debt instruments are also offering considerable returns in 2026. As a result, many of the best liquid funds are delivering about 6.5 – 7% annual returns, while most savings accounts are still in the 3 – 4% range. That difference becomes meaningful if you’re putting your money aside for a few months or more.

Inflation is close to 5%, so leaving money in a low-yield savings account can slowly reduce your purchasing power. Liquid mutual funds help you keep pace with inflation better, without forcing you into high-risk assets like equities. There is no lock-in, and most funds allow redemption in T+1 working days; some even offer an “instant redemption” facility for a small limit.

As an investor, this makes liquid funds a practical tool for emergency funds, parking bonuses, or keeping money aside for short-term goals. You have the option to track these funds in real time, compare returns and risks, and move between schemes easily using platforms like the Pocketful app, which also offers zero brokerage on delivery trades and a simple interface for both beginners and experienced investors.

How to Choose the Best Liquid Fund in 2026

Investors shall look for the following thighs before selecting a liquid fund:

Past Performance: Look at the fund’s past performance by judging its last 5 year returns cycle.
AUM Size and Brand: Look for large and reputable fund houses in the market as they are reliable to invest your savings.
Portfolio Quality: High share of T-bills, top-rated CDs, and CPs should be your preference, and those with too much in a single issuer should be avoided.
Expense Ratio: Lower expense ratios of around 0.07% – 0.10% will give you more gross yield. So one shall prefer funds with low expense ratio.

Investors can easily compare all these factors on the Pocketful platform, where they can check out returns, AUM, expenses, and basic portfolio details side by side and then invest.

Conclusion

Liquid Mutual Funds act as a smart and reliable substitute for cash. The best mutual Fund liquid funds like Axis, HDFC and Aditya Birla can give returns up to 6.5%-7% along with outstanding liquidity. These funds considerably exceed the performance of conventional savings accounts. Reflect on your investment duration and risk appetite.

These funds are best suitable for those looking to save for emergency savings, short-term investments or business operating capital. However these funds are not created for long term wealth creation but gives you purchasing power confidence as you have cash that is easily accessible.

For additional market updates and insights, download Pocketful, which offers users zero brokerage on delivery trades and an easy-to-use platform designed for both beginners and experienced investors.

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Frequently Asked Questions (FAQs)

What is a liquid mutual fund?
These are direct mutual funds where your savings are put in short-term financial instruments like T-bills, CDs, and CPs. Here the maturity is up to 91 days and these funds focus on giving high liquidity with minimal risk attached to it.
Best Liquid fund for beginners?
Axis Liquid Direct Growth and HDFC Liquid Direct Growth are a prominent market choice as they have large AUM, low expenses, and consistent performance.
Can I redeem my investment anytime?
Yes, usually there is no lock-in for liquid mutual funds and most funds allow T+1 redemptions and offer instant redemption with a limited amount per day.
Are liquid funds safer than other debt funds?
They generally carry lower interest rates and credit risk than longer-duration debt funds. This is because they hold very short-term, high-rated papers.
Are liquid funds better compared to savings accounts?
Liquid funds can be a more advantageous option as compared to savings accounts as they give higher returns.

March 13, 2026

Category: Mutual Funds

What are High Risk Mutual Funds?

Key Features of High Risk Mutual Fund

What are Low Risk Mutual Funds?

Key Features of a Low-Risk Mutual Fund

High Risk vs. Low Risk Mutual Fund

Which is suitable for you – High Risk or Low Risk Fund?

Conclusion

Frequently Asked Questions (FAQs)

What is the meaning of high-risk and low-risk mutual funds?

How to reduce risk while investing in a high-risk mutual fund?

Do high-risk mutual funds always post high returns?

What are the key examples of high-risk mutual funds?

Do low-risk mutual funds always invest in debt securities?

Understanding Mutual Fund & Returns

What are Annualised Returns

Importance of Annualised Returns

1. Helps Compare Different Investments

2. Shows the True Picture

3. Useful for Long-term Planning

Annualised Returns vs. Absolute Returns

Formula for Annualised Returns

Where to Check Annulised Returns

1. Use Investment Apps or Platforms

2. Check the Fund House Website

3. Use Financial Websites for Comparison

Things to Keep in Mind

1. Always Compare Similar Funds

2. Do not look at Just One Number

3. Try to interpret what you are seeing

Conclusion

Frequently Asked Questions (FAQs)

Is annualised return the same as CAGR?

When should I use annualised returns?

Can annualised returns be negative?

Do mutual fund apps show annualised returns?

Is a higher annualised return always better?

Meaning of trail commission in mutual fund

Who Receives Trailing Commissions?

How to Calculate Trail Commission?

Use of trail commission in mutual fund

Advantage of trail commission in mutual fund

For the distributor,

For the investor,

Disadvantage trail commission in mutual fund

For the distributor,

For the investor

Conclusion

Frequently Asked Questions (FAQs)

What is the meaning of trail commission in mutual funds?

What are the benefits of paying a trail commission?

How to use the trail commission calculation formula?

Who actually pays this commission to the distributor?

How can you avoid paying trail commissions?

What is an SWP

Features of SWP

What is a Fixed Deposit?

Features of Fixed Deposit

SWP vs FD – Table of Differences

How to Choose Between FD & SWP

Conclusion

Frequently Asked Questions (FAQs)

FD or SWP, which one should I choose?

Is SWP safe?

Can SWP give me a monthly income?

Can my SWP money finish?

Which one saves more tax?

List of Top 10 Best Equity Mutual Funds in 2026

Overiew of Best Equity Mutual Funds in India

1. Parag Parikh Flexi Cap Fund

2. HDFC Flexi Cap Fund

3. Kotak Flexicap Fund

4. Aditya Birla Sun Life Flexi Cap Fund

5. SBI Flexicap Fund

6. UTI Flexi Cap Fund

7. ICICI Prudential Flexicap Fund

8. Franklin India Flexi Cap Fund

9. Canara Robeco Flexi Cap Fund

10. Bank of India Flexi Cap Fund

Advantage and Disadvantage of Flexi Cap Mutual Fund