Best investment for pledging

Dear members…

I am looking for an instrument to buy and pledge and use for F&O margin… There are many instruments available but my primary focus is capital protection and liquidity.

I explored the RBI bonds, but the liquidity is not as expected. Say if i want to sell my bonds for some major reason, liquidity is not there…

Investing in mutual funds - debt - though good one, but associated with redemption charges, and rarely decrease in capital.

SGB - risk of capital reduction and liqudity.

I am not sure on Liquid funds - how much return they get… I am expecting an instrument with FD return.

Pls advise a best option.

I know there is nothing comes with 100% risk free but i am looking for something reasonable

Check if this helps.

FD can be from couple of weeks to 5+ years, so generalizing wont make sense.
If you want 90-180 day type return use liquid funds, something like 1 year is money-market fund and long-term are Gilt funds.

Check in Z pledge list first to be sure that the instrument is accepted.

I use a combination of

  1. Money market funds
  2. Gilt Funds
  3. Conservative + Dynamic Hybrid Funds

If Nifty falls more than 10% from its top, I might buy some NiftyBees or aggressive hybrid funds.

Obviously useful Jason… Thanks… I am thinking of getting it done via money market funds as my primary motive is liquidity and capital protection

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Money market funds - is it trated as cash equivalent?


Thanks chirag… Not generalising, the duratiin is about 1 year

You could look into arbitrage funds.