Liquid mutual funds have become a preferred parking spot for short-term money. Whether you are an investor looking to earn better returns than a savings account or a trader who wants to park your money and drip feed your trading capital or someone who wants quick liquidity without taking on high risk, liquid funds are often the go-to choice. But with dozens of options available, how do you identify the best liquid mutual funds in India?
That’s exactly where a systematic approach helps. Instead of picking funds based on guesswork, you can rely on a transparent framework that balances returns, risk, and cost. Inspired by a popular video on YouTube, I built a free online Liquid Mutual Fund Screener using Python and Streamlit. This screener allows you to evaluate funds based on multiple factors and shortlist the top performers.
Why Choosing the Right Liquid Mutual Fund Matters
At first glance, liquid funds may all seem the same. They typically invest in short-term debt instruments like treasury bills and commercial papers. However, not all liquid funds deliver equal results. Factors such as fund management, expense ratio, credit quality, and consistency of returns can make a significant difference over time.
If your objective is to maximize safety and returns while keeping costs low, you need to look beyond headline performance. That’s where a data-driven screener comes in handy.
How the Liquid Fund Screener Works
The screener I’ve built uses a weighted scoring model that ranks funds across key parameters. Each parameter reflects an important aspect of fund performance:
3-Year Rolling Returns (30%) – Higher is better, since it shows consistency in generating returns.
Credit Rating (20%) – Measures portfolio safety; higher ratings indicate stronger underlying securities.
Expense Ratio (20%) – Lower costs directly improve investor returns.
Sharpe Ratio (20%) – A measure of risk-adjusted returns – how well the fund delivers returns per unit of risk.
Months Since Inception (10%) – Longer track records inspire greater confidence.
Only funds with an AUM above ₹20,000 crores are considered, ensuring sufficient liquidity and stability. Each factor is ranked, then combined into a composite score. Finally, the top 10 liquid funds are displayed.
This approach helps investors strike the right balance between returns, safety, and cost—the real sweet spot when it comes to mutual fund selection.
How to access this screener?
Visit our community tools page below under ‘Screeners’ section. Look for “Liquid Funds : How to Choose”
Link
Why This Approach Stands Out
Most investors either chase the highest return or stick to big-name funds without checking deeper metrics. But liquid funds need to be evaluated holistically. For example, a fund with slightly lower returns but a stronger credit rating and lower expense ratio may serve you better in the long run.
The screener saves you time by automating the research and presenting the most reliable options in a single view. Instead of browsing through dozens of factsheets, you can focus only on funds that meet all the right criteria.
Conclusion
If you’re looking for the best liquid mutual funds in India, relying on structured analysis rather than instinct makes a big difference. With this screener, you can easily shortlist funds that are not only consistent in performance but also safe, low-cost, and reliable.
The tool is free to use and designed with simplicity in mind. Give it a try, and you may find your next liquid fund investment much faster than scrolling through endless data.
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Disclaimer: The information provided in this article is for educational and informational purposes only and should not be construed as financial, investment, or legal advice. The content is based on publicly available information and personal opinions and may not be suitable for all investors. Investing involves risks, including the loss of principal. Always conduct your own research and consult a qualified financial advisor before making any investment decisions. The author and website assume no liability for any financial losses or decisions made based on the information presented.
