GILT vs Liquid mutual funds

Personal finance
21

it will adjusted in NAV - in growth option -
even if you need every month you can choose SWP method
i explained here past history

if you want plain SWP you will get 7 to 8%

swp
swp1378×731 37.8 KB

if you try STP - you will get aroud 14% also

stp
stp1372×891 50.5 KB

1 Like
22

Thank you for your knowledge and effort…

1 Like
23

GILT Funds:

  • Invest primarily in government securities with no credit risk.
  • Suitable for investors with a long-term horizon (3-5 years or more).
  • GILTs can be volatile in the short term due to interest rate movements, but they usually offer better returns in a declining interest rate environment.

Liquid Funds:

  • Invest in short-term money market instruments with a maturity of up to 91 days.
  • Ideal for parking surplus funds with minimal risk and higher liquidity.
  • Typically, they offer lower returns compared to GILT funds but with significantly lower volatility.

Which is better?
If you’re looking for stability and easy access to your money, Liquid funds are better. However, if you have a longer investment horizon and can handle some short-term volatility for potentially higher returns, GILT funds might be a better choice.

24

if I choose to ignore interest rate changes…in this case Gilt fund is better?

25

In liquid funds, the average maturity of the debt papers (Bonds, debentures, treasury bills etc.) is less than 90 days. In this type of investment horiazon the risk of interest rate change is very minimul. So it’s better to ignore in case of Liquid fund.

But in GILT, which has the high maturity duration, the risk of interest rate flactution is very high.

26

I am betting on an interest rate cut…so I am prereferring Gilt…