{"id":5288,"date":"2024-05-20T13:14:42","date_gmt":"2024-05-20T13:14:42","guid":{"rendered":"https:\/\/wp-api.pocketful.in\/blog\/?p=5288"},"modified":"2025-02-27T11:07:48","modified_gmt":"2025-02-27T11:07:48","slug":"liquid-funds-vs-ultra-short-fund","status":"publish","type":"post","link":"https:\/\/wp-api.pocketful.in\/blog\/liquid-funds-vs-ultra-short-fund\/","title":{"rendered":"Liquid Funds Vs Ultra Short Fund: Which One Should You Choose?"},"content":{"rendered":"\n<p>Looking for alternatives to park your short-term money beyond savings accounts and short-term bank FDs? If you haven&#8217;t explored Liquid funds and Ultra-short duration funds yet, you&#8217;re missing out on some excellent opportunities.<\/p>\n\n\n\n<p>This blog post explores the universe of these two investment vehicles, outlining their unique characteristics, returns to assist you in selecting the best option for your financial needs.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-transparent ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/wp-api.pocketful.in\/blog\/liquid-funds-vs-ultra-short-fund\/#Debt_Mutual_Funds_%E2%80%93_Overview\" title=\"Debt Mutual Funds &#8211; Overview\">Debt Mutual Funds &#8211; Overview<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/wp-api.pocketful.in\/blog\/liquid-funds-vs-ultra-short-fund\/#Ultra-short_Fund\" title=\"Ultra-short Fund\">Ultra-short Fund<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/wp-api.pocketful.in\/blog\/liquid-funds-vs-ultra-short-fund\/#Features_of_Ultra-short_duration_fund\" title=\"Features of Ultra-short duration fund\">Features of Ultra-short duration fund<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/wp-api.pocketful.in\/blog\/liquid-funds-vs-ultra-short-fund\/#Performance_of_Ultra-short_Funds\" title=\"Performance of Ultra-short Funds\">Performance of Ultra-short Funds<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/wp-api.pocketful.in\/blog\/liquid-funds-vs-ultra-short-fund\/#Liquid_Fund\" title=\"Liquid Fund\">Liquid Fund<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/wp-api.pocketful.in\/blog\/liquid-funds-vs-ultra-short-fund\/#Features_of_Liquid_Fund\" title=\"Features of Liquid Fund\">Features of Liquid Fund<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/wp-api.pocketful.in\/blog\/liquid-funds-vs-ultra-short-fund\/#Performance_of_Liquid_Funds\" title=\"Performance of Liquid Funds\">Performance of Liquid Funds<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/wp-api.pocketful.in\/blog\/liquid-funds-vs-ultra-short-fund\/#Liquid_Vs_Ultra-short_Funds\" title=\"Liquid Vs Ultra-short Funds\">Liquid Vs Ultra-short Funds<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/wp-api.pocketful.in\/blog\/liquid-funds-vs-ultra-short-fund\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/wp-api.pocketful.in\/blog\/liquid-funds-vs-ultra-short-fund\/#Frequently_Asked_Questions_FAQs\" title=\"Frequently Asked Questions (FAQs)\">Frequently Asked Questions (FAQs)<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\" id=\"h-debt-mutual-funds-overview\"><span class=\"ez-toc-section\" id=\"Debt_Mutual_Funds_%E2%80%93_Overview\"><\/span>Debt Mutual Funds &#8211; Overview<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A debt fund is a mutual fund that invests primarily in fixed-income securities such as corporate bonds, government bonds, treasury bills, etc. The debt funds generate gains via interest income from underlying debt securities and appreciation of the same in the secondary market.<\/p>\n\n\n\n<p>Generally speaking, they are less risky and volatile than<strong> <a href=\"https:\/\/wp-api.pocketful.in\/blog\/equity-mutual-funds\/\" target=\"_blank\" rel=\"noreferrer noopener\">equity fun<\/a><a href=\"https:\/\/wp-api.pocketful.in\/blog\/equity-mutual-funds\/\">ds<\/a><\/strong> since the fixed-income instruments in their portfolio provide predictable returns and less volatility.<\/p>\n\n\n\n<p>Nonetheless, interest rate volatility, liquidity risk, and the credit risk of the underlying bonds are usually the risks connected with debt funds. As per the SEBI, based on the securities&#8217; maturity length, mutual funds in the debt category comprise 16 subcategories.<\/p>\n\n\n\n<p>If you want to explore all of them, check out our blog on Debt categorization of mutual funds: <a href=\"https:\/\/wp-api.pocketful.in\/blog\/debt-mutual-funds\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Debt Mutual Funds<\/strong><\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-ultra-short-fund\"><span class=\"ez-toc-section\" id=\"Ultra-short_Fund\"><\/span>Ultra-short Fund<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>It is a type of <a href=\"https:\/\/wp-api.pocketful.in\/blog\/debt-mutual-funds\/\"><strong>debt mutual fund<\/strong><\/a> that invests in debt instruments with maturities ranging from three to six months, such as money market instruments or fixed-income securities.<\/p>\n\n\n\n<p>The fund has minimal risk and a lot of liquidity. Securities of ultra-short funds have low volatility because of their short maturity. Investors wishing to invest in the debt category of mutual funds for a six-month term might choose ultrashort funds.<\/p>\n\n\n\n<p><strong>Read Also: <\/strong><a href=\"https:\/\/www.pocketful.in\/blog\/mutual-funds\/types-of-mutual-funds\/\">Types of Mutual Funds in India<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-features-of-ultra-short-duration-fund\"><span class=\"ez-toc-section\" id=\"Features_of_Ultra-short_duration_fund\"><\/span>Features of Ultra-short duration fund<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ol class=\"wp-block-list\">\n<li>The portfolio of these funds consist of securities having maturity up to 6 months.<\/li>\n\n\n\n<li>As compared to longer-duration funds, the ultra-short fund carries a low-interest rate sensitivity.<\/li>\n\n\n\n<li>The fund generally provides low returns as compared to debt funds with higher maturity, but the risk involved in this fund is also on the lower side. Further, returns of ultra-short funds generally hover around returns of fixed deposits of scheduled commercial banks.<\/li>\n\n\n\n<li>Due to the short duration of the portfolio, the fund aims to maintain a high level of liquidity, which makes it easy for investors to enter and exit this fund without any exit load.<\/li>\n<\/ol>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-performance-of-ultra-short-funds\"><span class=\"ez-toc-section\" id=\"Performance_of_Ultra-short_Funds\"><\/span>Performance of Ultra-short Funds<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Let\u2019s have a look at the performance of some of the top ultra-short funds (annualized return):<\/p>\n\n\n\n<figure class=\"wp-block-table has-small-font-size\"><table><thead><tr><th class=\"has-text-align-left\" data-align=\"left\">Scheme Name<\/th><th class=\"has-text-align-center\" data-align=\"center\">6 Months (%)<\/th><th class=\"has-text-align-center\" data-align=\"center\">1 Year (%)<\/th><th class=\"has-text-align-center\" data-align=\"center\">3 Years (%)<\/th><\/tr><\/thead><tbody><tr><td class=\"has-text-align-left\" data-align=\"left\">Mirae Asset Ultra Short Duration Reg Growth<\/td><td class=\"has-text-align-center\" data-align=\"center\">3.8<\/td><td class=\"has-text-align-center\" data-align=\"center\">7.38<\/td><td class=\"has-text-align-center\" data-align=\"center\">5.57<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">ICICI Pru Ultra Short-Term Growth<\/td><td class=\"has-text-align-center\" data-align=\"center\">3.78<\/td><td class=\"has-text-align-center\" data-align=\"center\">7.24<\/td><td class=\"has-text-align-center\" data-align=\"center\">5.56<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">Bandhan Ultra Short-Term Reg Growth<\/td><td class=\"has-text-align-center\" data-align=\"center\">3.73<\/td><td class=\"has-text-align-center\" data-align=\"center\">7.21<\/td><td class=\"has-text-align-center\" data-align=\"center\">5.39<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">HDFC Ultra Short-Term Growth<\/td><td class=\"has-text-align-center\" data-align=\"center\">3.72<\/td><td class=\"has-text-align-center\" data-align=\"center\">7.18<\/td><td class=\"has-text-align-center\" data-align=\"center\">5.44<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">SBI Magnum Ultra Short Duration Reg Growth<\/td><td class=\"has-text-align-center\" data-align=\"center\">3.71<\/td><td class=\"has-text-align-center\" data-align=\"center\">7.21<\/td><td class=\"has-text-align-center\" data-align=\"center\">5.39<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">Mahindra Manulife Ultra Short Duration Fund Reg Growth<\/td><td class=\"has-text-align-center\" data-align=\"center\">3.63<\/td><td class=\"has-text-align-center\" data-align=\"center\">7.07<\/td><td class=\"has-text-align-center\" data-align=\"center\">5.31<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">Tata Ultra Short Term Reg Growth<\/td><td class=\"has-text-align-center\" data-align=\"center\">3.48<\/td><td class=\"has-text-align-center\" data-align=\"center\">6.7<\/td><td class=\"has-text-align-center\" data-align=\"center\">5.01<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">DSP Ultra Short Fund Reg Growth<\/td><td class=\"has-text-align-center\" data-align=\"center\">3.47<\/td><td class=\"has-text-align-center\" data-align=\"center\">6.87<\/td><td class=\"has-text-align-center\" data-align=\"center\">5<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-liquid-fund\"><span class=\"ez-toc-section\" id=\"Liquid_Fund\"><\/span>Liquid Fund<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A &#8220;liquid fund&#8221; is an open-ended debt mutual fund that invests in debt instruments having maturities of less than 91 days. The portfolio consists of high-credit-grade fixed-income securities.<\/p>\n\n\n\n<p>Liquid funds are regarded as the lowest-risk debt mutual funds. They offer a slightly higher return than a savings bank account.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-features-of-liquid-fund\"><span class=\"ez-toc-section\" id=\"Features_of_Liquid_Fund\"><\/span>Features of Liquid Fund<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Investors can earn a bit more than a savings account by parking their excess funds in a liquid fund.<\/li>\n\n\n\n<li>It is the only fund whose NAV is calculated daily, whether it is Saturday or Sunday.<\/li>\n\n\n\n<li>Although liquid funds post higher returns than savings bank accounts, their returns can fluctuate depending on market and economic conditions.<\/li>\n\n\n\n<li>Liquid funds prioritize safety and liquidity, so their returns are lower as compared to other debt funds.<\/li>\n<\/ol>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-performance-of-liquid-funds\"><span class=\"ez-toc-section\" id=\"Performance_of_Liquid_Funds\"><\/span>Performance of Liquid Funds<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Let\u2019s have a look at the performance of some of the top liquid funds (annualized return):<\/p>\n\n\n\n<figure class=\"wp-block-table has-small-font-size\"><table><thead><tr><th class=\"has-text-align-left\" data-align=\"left\">Scheme Name<\/th><th class=\"has-text-align-center\" data-align=\"center\">6 Months (%)<\/th><th class=\"has-text-align-center\" data-align=\"center\">1 Year (%)<\/th><th class=\"has-text-align-center\" data-align=\"center\">3 Years (%)<\/th><\/tr><\/thead><tbody><tr><td class=\"has-text-align-left\" data-align=\"left\">HDFC Liquid Growth<\/td><td class=\"has-text-align-center\" data-align=\"center\">3.72<\/td><td class=\"has-text-align-center\" data-align=\"center\">7.24<\/td><td class=\"has-text-align-center\" data-align=\"center\">5.46<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">ICICI Pru Liquid Growth<\/td><td class=\"has-text-align-center\" data-align=\"center\">3.73<\/td><td class=\"has-text-align-center\" data-align=\"center\">7.26<\/td><td class=\"has-text-align-center\" data-align=\"center\">5.46<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">Nippon India Liquid Growth<\/td><td class=\"has-text-align-center\" data-align=\"center\">3.71<\/td><td class=\"has-text-align-center\" data-align=\"center\">7.24<\/td><td class=\"has-text-align-center\" data-align=\"center\">5.46<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">ABSL Liquid Growth<\/td><td class=\"has-text-align-center\" data-align=\"center\">3.72<\/td><td class=\"has-text-align-center\" data-align=\"center\">7.27<\/td><td class=\"has-text-align-center\" data-align=\"center\">5.51<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">Edelweiss Liquid Ret Growth<\/td><td class=\"has-text-align-center\" data-align=\"center\">3.68<\/td><td class=\"has-text-align-center\" data-align=\"center\">7.17<\/td><td class=\"has-text-align-center\" data-align=\"center\">5.37<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">Kotak Liquid Reg Growth<\/td><td class=\"has-text-align-center\" data-align=\"center\">3.69<\/td><td class=\"has-text-align-center\" data-align=\"center\">7.22<\/td><td class=\"has-text-align-center\" data-align=\"center\">5.44<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">Baroda BNP Paribas Liquid Plan Growth<\/td><td class=\"has-text-align-center\" data-align=\"center\">3.68<\/td><td class=\"has-text-align-center\" data-align=\"center\">7.24<\/td><td class=\"has-text-align-center\" data-align=\"center\">5.52<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">White Oak Capital Liquid Reg Growth<\/td><td class=\"has-text-align-center\" data-align=\"center\">3.65<\/td><td class=\"has-text-align-center\" data-align=\"center\">7.13<\/td><td class=\"has-text-align-center\" data-align=\"center\">5.21<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-liquid-vs-ultra-short-funds\"><span class=\"ez-toc-section\" id=\"Liquid_Vs_Ultra-short_Funds\"><\/span>Liquid Vs Ultra-short Funds<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-table has-small-font-size\"><table><thead><tr><th class=\"has-text-align-left\" data-align=\"left\">Particulars<\/th><th class=\"has-text-align-left\" data-align=\"left\">Ultra-short Fund<\/th><th class=\"has-text-align-left\" data-align=\"left\">Liquid Fund<\/th><\/tr><\/thead><tbody><tr><td class=\"has-text-align-left\" data-align=\"left\">Average Maturity<\/td><td class=\"has-text-align-left\" data-align=\"left\">It invests in debt securities with a maturity from 3 to 6 months.<\/td><td class=\"has-text-align-left\" data-align=\"left\">It invests in debt securities that have a maturity of up to 91 days.<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">Returns<\/td><td class=\"has-text-align-left\" data-align=\"left\">It provides slightly higher returns than the liquid fund.<\/td><td class=\"has-text-align-left\" data-align=\"left\">The returns of liquid funds are on the lower side as compared to ultra-short duration funds.<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">Liquidity<\/td><td class=\"has-text-align-left\" data-align=\"left\">These are less liquid than Liquid funds.<\/td><td class=\"has-text-align-left\" data-align=\"left\">The liquid funds provide higher liquidity than the ultra-short duration funds.<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">Exit Load<\/td><td class=\"has-text-align-left\" data-align=\"left\">It generally has a nil exit load.<\/td><td class=\"has-text-align-left\" data-align=\"left\">Liquid funds have an exit load of up to 7 days.<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">Risk<\/td><td class=\"has-text-align-left\" data-align=\"left\">It carries a slightly higher risk than liquid funds.<\/td><td class=\"has-text-align-left\" data-align=\"left\">It carries the lowest risk.<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\">Cut off timings<\/td><td class=\"has-text-align-left\" data-align=\"left\">The cut-off timing for purchasing liquid funds is 1:30 p.m., while the time for redemption is 3 p.m.<\/td><td class=\"has-text-align-left\" data-align=\"left\">The cut-off time for purchase and redemption of liquid funds is 3 p.m.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><strong>Read Also: <\/strong><a href=\"https:\/\/www.pocketful.in\/blog\/debt-mutual-funds\/\">Debt Mutual Funds: Meaning, Types and Features<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-conclusion\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In summation, while ultrashort funds carry a more significant risk than liquid funds, they also offer marginally higher returns. Liquid funds offer high liquidity and safety and are attractive to investors who are looking for alternatives to the savings accounts. Investors with short to intermediate investment horizons and moderate risk tolerance may find ultra-short-term funds appealing.<\/p>\n\n\n\n<p>However, before investing in debt funds, you must weigh all the risks involved and consult with your financial advisor.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-frequently-asked-questions-faqs\"><span class=\"ez-toc-section\" id=\"Frequently_Asked_Questions_FAQs\"><\/span>Frequently Asked Questions (FAQs)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n<div class=\"saswp-faq-block-section\"><ol style=\"list-style-type:none\"><li style=\"list-style-type: none\"><h3 class=\"\">Is there a lock-in period for ultra-short funds?<\/h3><p class=\"saswp-faq-answer-text\">Ultra-short funds invest in debt securities having a Macaulay duration of 3 to 6 months. The lock-in period depends on the fund to fund. Generally, there is no lock-in period in ultra-short funds as there is adequate liquidity because of the short duration of investments.<\/p><li style=\"list-style-type: none\"><h3 class=\"\">What is the duration of the ultra-short funds?<\/h3><p class=\"saswp-faq-answer-text\">The ultra-short duration funds invest in debt securities, the maturity duration of which ranges from 3 months to 6 months.<\/p><li style=\"list-style-type: none\"><h3 class=\"\">Is there any exit load in liquid funds?<\/h3><p class=\"saswp-faq-answer-text\">Liquid funds do carry a graded exit load of up to 7 days.<\/p><li style=\"list-style-type: none\"><h3 class=\"\">Can I lose money in liquid funds?<\/h3><p class=\"saswp-faq-answer-text\">As liquid funds invest only in short-term debt securities, ranging up to 91 days, they do not respond much when interest rates change in the market, so they do not have significant capital gains or losses.<\/p><li style=\"list-style-type: none\"><h3 class=\"\">Do liquid funds provide guaranteed returns?<\/h3><p class=\"saswp-faq-answer-text\">Liquid funds do not provide guaranteed returns; however, due to the nature of their portfolio, their returns are generally stable.<\/p><\/ul><\/div>","protected":false},"excerpt":{"rendered":"<p>Looking for alternatives to park your short-term money beyond savings accounts and short-term bank FDs? If you haven&#8217;t explored Liquid funds and Ultra-short duration funds yet, you&#8217;re missing out on some excellent opportunities. This blog post explores the universe of these two investment vehicles, outlining their unique characteristics, returns to assist you in selecting the [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":5307,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"is_paper_insight":false,"paper_insight_image":0,"paper_insight_pdf":0,"paper_insight_ppt":0,"footnotes":""},"categories":[19],"tags":[],"class_list":["post-5288","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mutual-funds"],"acf":{"freelancer":"Akash Gupta"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v20.13 (Yoast SEO v21.2) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Liquid Funds Vs Ultra Short Fund: Which One Should You Choose? - Pocketful<\/title>\n<meta name=\"description\" content=\"If you are wondering about the difference between a liquid fund and an ultra-short duration fund, check out the blog.\" \/>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Liquid Funds Vs Ultra Short Fund: Which One Should You Choose?\" \/>\n<meta property=\"og:description\" content=\"If you are wondering about the difference between a liquid fund and an ultra-short duration fund, check out the blog.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/wp-api.pocketful.in\/blog\/liquid-funds-vs-ultra-short-fund\/\" \/>\n<meta property=\"og:site_name\" content=\"Pocketful\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Pocketful.HQ\/\" \/>\n<meta property=\"article:published_time\" content=\"2024-05-20T13:14:42+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-02-27T11:07:48+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/wp-api.pocketful.in\/blog\/wp-content\/uploads\/2024\/05\/Liquid-funds-vs-Ultra-Short-Funds-Banner.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1497\" \/>\n\t<meta property=\"og:image:height\" content=\"1080\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Mayank Rohilla\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@Pocketful_HQ\" \/>\n<meta name=\"twitter:site\" content=\"@Pocketful_HQ\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Mayank Rohilla\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Liquid Funds Vs Ultra Short Fund: Which One Should You Choose? - Pocketful","description":"If you are wondering about the difference between a liquid fund and an ultra-short duration fund, check out the blog.","robots":{"index":"noindex","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"og_locale":"en_US","og_type":"article","og_title":"Liquid Funds Vs Ultra Short Fund: Which One Should You Choose?","og_description":"If you are wondering about the difference between a liquid fund and an ultra-short duration fund, check out the blog.","og_url":"https:\/\/wp-api.pocketful.in\/blog\/liquid-funds-vs-ultra-short-fund\/","og_site_name":"Pocketful","article_publisher":"https:\/\/www.facebook.com\/Pocketful.HQ\/","article_published_time":"2024-05-20T13:14:42+00:00","article_modified_time":"2025-02-27T11:07:48+00:00","og_image":[{"width":1497,"height":1080,"url":"https:\/\/wp-api.pocketful.in\/blog\/wp-content\/uploads\/2024\/05\/Liquid-funds-vs-Ultra-Short-Funds-Banner.jpg","type":"image\/jpeg"}],"author":"Mayank Rohilla","twitter_card":"summary_large_image","twitter_creator":"@Pocketful_HQ","twitter_site":"@Pocketful_HQ","twitter_misc":{"Written by":"Mayank Rohilla","Est. reading time":"5 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/wp-api.pocketful.in\/blog\/liquid-funds-vs-ultra-short-fund\/#article","isPartOf":{"@id":"https:\/\/wp-api.pocketful.in\/blog\/liquid-funds-vs-ultra-short-fund\/"},"author":{"name":"Mayank Rohilla","@id":"https:\/\/wp-api.pocketful.in\/blog\/#\/schema\/person\/e9632ed6becc2df105739c7282e5f367"},"headline":"Liquid Funds Vs Ultra Short Fund: Which One Should You Choose?","datePublished":"2024-05-20T13:14:42+00:00","dateModified":"2025-02-27T11:07:48+00:00","mainEntityOfPage":{"@id":"https:\/\/wp-api.pocketful.in\/blog\/liquid-funds-vs-ultra-short-fund\/"},"wordCount":893,"publisher":{"@id":"https:\/\/wp-api.pocketful.in\/blog\/#organization"},"articleSection":["Mutual Funds"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/wp-api.pocketful.in\/blog\/liquid-funds-vs-ultra-short-fund\/","url":"https:\/\/wp-api.pocketful.in\/blog\/liquid-funds-vs-ultra-short-fund\/","name":"Liquid Funds Vs Ultra Short Fund: Which One Should You Choose? - Pocketful","isPartOf":{"@id":"https:\/\/wp-api.pocketful.in\/blog\/#website"},"datePublished":"2024-05-20T13:14:42+00:00","dateModified":"2025-02-27T11:07:48+00:00","description":"If you are wondering about the difference between a liquid fund and an ultra-short duration fund, check out the blog.","breadcrumb":{"@id":"https:\/\/wp-api.pocketful.in\/blog\/liquid-funds-vs-ultra-short-fund\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/wp-api.pocketful.in\/blog\/liquid-funds-vs-ultra-short-fund\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/wp-api.pocketful.in\/blog\/liquid-funds-vs-ultra-short-fund\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Blog Home","item":"https:\/\/wp-api.pocketful.in\/blog\/"},{"@type":"ListItem","position":2,"name":"Liquid Funds Vs Ultra Short Fund: Which One Should You Choose?"}]},{"@type":"WebSite","@id":"https:\/\/wp-api.pocketful.in\/blog\/#website","url":"https:\/\/wp-api.pocketful.in\/blog\/","name":"Pocketful blog","description":"Learn Stock market trading, investing &amp; more","publisher":{"@id":"https:\/\/wp-api.pocketful.in\/blog\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/wp-api.pocketful.in\/blog\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/wp-api.pocketful.in\/blog\/#organization","name":"Pocketful","alternateName":"Pocketful Broker","url":"https:\/\/wp-api.pocketful.in\/blog\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/wp-api.pocketful.in\/blog\/#\/schema\/logo\/image\/","url":"https:\/\/cms-resources.pocketful.in\/blog\/wp-content\/uploads\/2023\/08\/Logo_Final-01-1-3-1.png","contentUrl":"https:\/\/cms-resources.pocketful.in\/blog\/wp-content\/uploads\/2023\/08\/Logo_Final-01-1-3-1.png","width":150,"height":26,"caption":"Pocketful"},"image":{"@id":"https:\/\/wp-api.pocketful.in\/blog\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.facebook.com\/Pocketful.HQ\/","https:\/\/twitter.com\/Pocketful_HQ","https:\/\/www.linkedin.com\/company\/pocketfulofprofits\/","https:\/\/www.instagram.com\/pocketful.official\/"]},{"@type":"Person","@id":"https:\/\/wp-api.pocketful.in\/blog\/#\/schema\/person\/e9632ed6becc2df105739c7282e5f367","name":"Mayank Rohilla","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/wp-api.pocketful.in\/blog\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/4a05d8951c0999e9c23650471c9241623039f37795fc2b30914e86b967c554a2?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/4a05d8951c0999e9c23650471c9241623039f37795fc2b30914e86b967c554a2?s=96&d=mm&r=g","caption":"Mayank Rohilla"}}]}},"associated_menu_id":null,"article_history_entries":[{"type":"Edit","author":{"id":7,"name":"Pocketful Team","url":"pocketful"},"content":"Post created","date":"2024-05-20 13:14:42","id":"ah_671798269e3da3.26802471"},{"type":"Update","author":{"id":11,"name":"Nisha","url":"nisha"},"content":"Add new links","date":"2025-02-27 11:07:48","id":"ah_67c04784f41d44.86658403"}],"is_paper_insight":false,"image_url_featured":"https:\/\/cms-resources.pocketful.in\/blog\/wp-content\/uploads\/2024\/05\/Liquid-funds-vs-Ultra-Short-Funds-Banner.jpg","_links":{"self":[{"href":"https:\/\/wp-api.pocketful.in\/blog\/wp-json\/wp\/v2\/posts\/5288","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/wp-api.pocketful.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/wp-api.pocketful.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/wp-api.pocketful.in\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/wp-api.pocketful.in\/blog\/wp-json\/wp\/v2\/comments?post=5288"}],"version-history":[{"count":0,"href":"https:\/\/wp-api.pocketful.in\/blog\/wp-json\/wp\/v2\/posts\/5288\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/wp-api.pocketful.in\/blog\/wp-json\/wp\/v2\/media\/5307"}],"wp:attachment":[{"href":"https:\/\/wp-api.pocketful.in\/blog\/wp-json\/wp\/v2\/media?parent=5288"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/wp-api.pocketful.in\/blog\/wp-json\/wp\/v2\/categories?post=5288"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/wp-api.pocketful.in\/blog\/wp-json\/wp\/v2\/tags?post=5288"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}