Liquid bees invest in TREPS or cash market instrument, they are collateralize lending hence the returns are low. The dividend credited in your account is also subjected to a DDT (dividend distribution tax) hence the returns are comparative low.
Liquid Funds on the other hand have good exposure to CP, though the maturity is only 3 months there are interest payment risk and capital return risk. Since liquid funds carry a higher risk the returns are better compared to Liquid ETF.
For generating additional returns on amount required for option selling - Will it not give better return by investing in ICICI prudential overnight fund (or any similar funds, wrote this name because zerodha has mentioned this on Funds transfer page) and pledging it for margin than Liquidbees?
By the past track record one can expect 5.91%, but i think this year the returns might be lower because the overall RFR is low… but still you need to park your capital in safe place the trade off here is the returns…
if I want to invest 1 lakh ; which side should I go ?
overnight fund or the liquidbees ?
which gives more returns ?
why DDT not applicable on the overnight funds ?
liquidbees are traded in the NSE !
are the overnight funds too ?
pls elaborate all the pros and cons of the BOTH , so that I can take a proper decision .
thk u .
This depends on the time frame you are planning to stay invested in markets…
if your time horizon is greater than 3 years go for the growth option which is overnight fund … as that will be more tax efficient ( indexation benefit will apply)
if you want to invest for lesser than 3 years time frame you can go for Liquid bees…
which gives more returns ? - both invest in the same category so the returns will also be moreorless the same…
why DDT not applicable on the overnight funds ? for growth option DDT is not applicable
liquidbees are traded in the NSE ! - Yes
are the overnight funds too ? - No they are mutual funds… so you have to use coin … T1 is the settlement time