Liquid Bees or Overnight Funds as Collateral - Which gives better returns

General
1

I want to pledge something like a fixed instrument (ex: LIQUIDBEES) for option selling and want to keep 25% cash in the trading account. Which one gives better returns? The Liquid Bees or ICICI Overnight Mutual Fund?

  1. For Liquid Bees do I need to pay all the charges except STT? i.e. 1116.71-1000 = 116.71 and CDSL charges?

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  2. If I invest in an overnight fund Are there any charges levied by the broker (Zerodha) or mutual fund company (ICICI)?

Which is better for pledging and providing better returns?

Thanks

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2

No

Yes.

3

Which one do you prefer Liquid Bees or Over Night Funds? Also, I can’t see any charges about the ICICI Overnight Fund.

Edit: Just noticed the expense ratio of 0.1%

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4

liquid bees has a much higher expense ratio of 0.65%.

Plus the headache of fractional units. Only positive is that you can get instant money when you sell, but you also need to pay high transaction charges to NSE for the privilege.

Since liquid/overnight funds also give 90% margin, i would prefer them. Overnight funds are safer, and i think they have some sort of collateral built in for atleast part of the holdings. So less risk of ILFS kind of default.
They are lousy investments but makes a lot of sense for pledging. You get free money( but lose 10% margin) + should be easier to manage quarterly settlement without having to deal with full capital going to bank.

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