What is a MMMF (Money Market Funds)?
A MMMF is a product that buys these products and because of the tax-advantage it carries, gives a better deal to those in the top tax bracket. What are liquid funds? # Debt funds that work in the money markets # Short term parking place for cash # Low risk MFs # 3-month returns of 5-7 per cent pa So summing up, why do liquid funds make sense? # If you are in the highest tax bracket, they are just more tax efficient and that stacks up as higher post tax returns. Most liquid funds charge no entry or exit load; perhaps one or so might charge a exit load on exiting in less than six months but that’s rare and between. The annual management fee is also very reasonable- upto 0.70 per cent. Most importantly, they are very easy to liquidate and you can get your money back in one day of sending a redemption request and most liquid funds have a minimum investment amount of 5000 rupees; so they are fairly accessible to all investors. A few points to remember: Why liquid funds? # Tax advantage # Ze
