Best Liquid Mutual Funds in India for 2025 – Are You Missing Out? Trade Brains Trade Brains

When it comes to parking short-term money safely, liquid mutual funds are one of the smartest tools in an investor’s arsenal. In 2025, they’re offering attractive returns (around 7%) without the volatility of equity or long-duration debt funds. This article dives into the top-performing liquid funds this year, and explains why they’re worth considering.

What Are Liquid Funds?

Liquid funds are short-term debt mutual funds that allocate investments to instruments such as treasury bills, commercial papers, and certificates of deposit, all having a maturity period of up to 91 days. They are designed for capital preservation, immediate liquidity, and minimal risk. These funds suit emergency savings, short-term savings objectives, or idle cash that you would like to grow slightly but yet still have easy access to.

Best Liquid Mutual Funds in India (2025)

1. Aditya Birla Sun Life Liquid Fund – Direct Plan

• This one of the biggest and most stable liquid funds in India and is renowned for its consistency and magnitude.
• AUM: More than ₹44,000 crore
• 1-Year Return: ~7.4%
• Expense Ratio: ~0.21%
• This fund allocates its capital across a broad range of high-quality, short-term securities. Its large asset size indicates strong investor confidence, and it consistently delivers returns that rank among the best in its category. While the expense ratio is slightly on the higher side, it is justified by the fund’s steady performance.

2. Edelweiss Liquid Fund – Direct Plan

• The dark horse in the liquid fund category, this fund is different because of its efficiency.
• AUM: Approximately ₹7,700 crore
• 1-Year Return: ~7.4%
• Expense Ratio: ~0.09%
• It is kept at low costs and invests in well-rated short-term debt. Although smaller in size compared to certain peers, it has retained a healthy return record.

3. Axis Liquid Fund – Direct Plan

• Supported by one of India’s most respected fund houses, the scheme is an excellent combination of size and performance.
• AUM: ₹36,000+ crore
• 1-Year Return: ~7.4%
• Expense Ratio: ~0.12%
• The fund primarily invests in AAA-rated commercial papers and treasury bills, making it a low-risk option with high liquidity.

4. PGIM India Liquid Fund – Direct Plan

• Tidy in size but powerful in performance, this fund is perfect for investors seeking quality with no crowd.
• AUM: ₹470 crore
• 1-Year Return: ~7.4%
• Expense Ratio: ~0.12%
• Its lean and mean structure ensures that it has the agility of fund management and has performed on par with big peers.

Also read: Do You Own These Top Defence Mutual Funds in 2025? Check Your Portfolio Now!

5. Mahindra Manulife Liquid Fund – Direct Plan

• A new entrant to the mutual fund industry, this fund brings together a good record to date and judicious security selection.
• AUM: ₹1,200 crore
• 1-Year Return: ~7.4%
• Expense Ratio: ~0.16%
• The fund focuses on maintaining liquidity by investing in a mix of money market instruments and short-term debt securities.

6. Union Liquid Fund – Direct Plan

• This fund stands out with a special mention for its very low cost and steady performance.
• AUM: ₹4,200 crore
• 1-Year Return: ~7.4%
• Expense Ratio: ~0.07%
• It’s amongst the lowest-cost ones in the market, which can have an impact on net returns, particularly for big portfolios.

7. Sundaram Liquid Fund – Direct Plan

• A solid choice from an old AMCard, this fund is famed for its wise debt picks.
• AUM: ₹5,700 crore
• 1-Year Return: ~7.4%
• Expense Ratio: ~0.13%
• It holds on to quality instruments and maintains portfolio turnover at low levels, giving steady returns with less risk.

8. Mirae Asset Liquid Fund – Direct Plan

• Mirae Asset has established its credibility with equity funds, and its liquid fund is no lesser when it comes to performance.
• AUM: ₹12,400 crore
• 1-Year Return: ~7.4%
• Expense Ratio: ~0.10%
• Good fund management, clear disclosure, and consistently good returns make it a balanced option.

9. Nippon India Liquid Fund – Direct Plan

• One of India’s oldest and most reliable liquid funds.
• AUM: ₹35,000+ crore
• 1-Year Return: ~7.4%
• Expense Ratio: ~0.20%
• Its size provides it the capacity to deal with redemptions without any difficulty, and it keeps a conservative portfolio to safeguard capital.

10. Canara Robeco Liquid Fund – Direct Plan

• A low-cost balanced fund with a spotless record.
• AUM: ₹5,700 crore
• 1-Year Return: ~7.4%
• Expense Ratio: ~0.07%
• This fund maintains a priority on credit safety and liquidity, steering away from risky investments, making it a risk-free parking avenue for idle money.

How to Select the Appropriate Liquid Fund?

• Expense Ratio: Low ratio implies higher net returns. Union and Canara Robeco take the lead here.
• AUM & Liquidity: Larger funds have an easier time managing redemptions when the market is under stress. Axis, Aditya Birla, and Nippon excel.
• Performance Consistency: Select funds that may not only pursue high returns but also risk management.

Taxation and Exit Load

• Taxation: When redeemed within 3 years, gains are taxed according to your income slab.
• Exit Load: Usually nil after 7 days. For redemptions prior to that, the fee is negligible (about 0.007% for same-day exit).

Liquid funds in 2025 are yielding consistent ~7% returns every year, which handily trounce savings accounts and several fixed deposits. If you’re creating an emergency fund or biding your time before investing your money elsewhere, these funds can be a safe, convenient, and intelligent place to leave your cash. Make sure to evaluate your investment horizon and liquidity requirements, and never mind the returns alone — because in liquid funds, cost, safety, and consistency are of greater importance.

Written by Pydimarri Hema Harshini

The post Best Liquid Mutual Funds in India for 2025 – Are You Missing Out? appeared first on Trade Brains.

When it comes to parking short-term money safely, liquid mutual funds are one of the smartest tools in an investor’s arsenal. In 2025, they’re offering attractive returns (around 7%) without the volatility of equity or long-duration debt funds. This article dives into the top-performing liquid funds this year, and explains why they’re worth considering. What
The post Best Liquid Mutual Funds in India for 2025 – Are You Missing Out? appeared first on Trade Brains.   Read MoreMoney, Mutual Funds, best liquid mutual funds, disadvantages of liquid funds, how to invest in liquid funds, liquid fund returns for 1 month, liquid mutual funds, liquid mutual funds calculator, liquid mutual funds returns, top 10 liquid funds, top 5 liquid funds Trade Brains