How do I calculate my liquid assets?
Table of Contents
How do I calculate my liquid assets?
You can calculate it by taking the cash on hand and adding accounts receivable funds as well as any other assets that can be converted to cash quickly. This total is then divided by current liabilities, giving you a ratio of liquid assets compared to current liabilities.
Where do you keep liquid assets?
When it comes to storing liquid assets, here are a few of the most common places people choose to keep their cash:
- Their house (hopefully well hidden and safe)
- A savings or checking account at their local bank or credit union.
- A money market account.
- Short-term certificates of deposit.
Is Liquid Fund better than FD?
Liquid funds invest in fixed-income instruments and endeavor to offer capital protection and liquidity to investors. Hence, they invest in high-quality instruments only. This makes them safer than other mutual funds. While these funds don’t assure any returns, they tend to offer better returns than FDs.
Is liquid funds safe now?
Although liquid funds are not entirely risk-free, however, they are low risk-low returns instruments. As they invest predominantly in debt instruments, they are subject to interest rate risk and credit risk. Liquid funds ensure that your money is invested only in superior creditworthy instruments.
Can I lose money in liquid funds?
Liquid Funds are one of the safest mutual funds. That’s because they lend to good companies for an extremely short duration, and that reduces risk. The risk of losing money is almost zero if you stay invested for some amount of time.
Can liquid funds give negative returns?
On an average, liquid funds have delivered 0% over the past week, according to data from Value Research and many large liquid funds have actually delivered negative returns. These are categories that normally do not deliver negative returns, even over short time periods and are considered extremely low risk.
Why did liquid funds give negative returns?
During the recent equity market fall, the debt markets were also becoming volatile and it resulted in negative returns by these very short term debt fund categories. It came as a shock to investors since these funds have not seen such a continuous downfall in the recent past.
Is it right time to invest in liquid funds?
When to invest in liquid funds Investors who typically park their funds in savings bank accounts for lack of low-risk options for the short term should instead go for liquid funds. This move may land you 1-3% more returns compared to savings bank returns.
Are Liquid funds returns taxable?
STCG from debt funds are added to your overall income and taxed at the income tax slab rate you fall under. LTCG from debt funds is taxable at a flat rate of 20% after indexation. Dividends offered by all mutual funds are added to your overall income and taxed at your income tax slab rate.
How long does it take to redeem Liquid Fund?
Liquid funds are often suggested as an alternative to savings bank accounts for parking extra cash or emergency funds as they give slightly better returns than bank savings accounts and are relatively safer than other debt funds. However, it takes a day or two to redeem your money from liquid funds.
How do I choose a good liquid fund?
For this reason, you should choose liquid funds that are large. These can handle redemption pressures better than liquid funds with smaller AUMs. As a rule of thumb, you should invest in a liquid fund which has an AUM of at least Rs. 20,000 crores.
How is tax calculated on liquid return?
In case of short term gains, the debt funds and liquid funds will have the gains added to the total regular income of the investors and will be taxed at the peak rate. If you are in the 30% tax bracket then you pay tax at 30% and if you are in the 20% tax bracket then you pay tax at the rate of 20%.
What are the returns on liquid funds?
Top 10 Liquid Mutual Funds
| Fund Name | Category | 1Y Returns |
|---|---|---|
| Aditya Birla Sun Life Liquid Fund | Debt | 3.6% |
| LIC MF Liquid Fund | Debt | 3.6% |
| Tata Liquid Fund | Debt | 3.5% |
| ICICI Prudential Liquid Fund | Debt | 3.6% |
Are debt funds tax free?
Long term capital gains upto Rs 1 Lakh is totally tax free. Short term capital gains (if the units are sold before three years) in debt mutual funds are taxed as per applicable tax rate of the investor. Therefore, if your tax rate is 30% then short term capital gains tax on debt fund is 30% + 4% cess.
Is liquid bees tax free?
The good news is that dividends (either as cash or as new units/stocks) are tax free in the hands of the investors. So when you get new units as dividend for holding liquid bees, no taxes are applicable on that.
How safe is liquid BeES?
Safety because the money market keeps money for a very short term (overnight or ultra short term) and is monitored by the RBI to ensure there are no challenges in terms of repayment or liquidity. And you can buy and sell it like a stock. You buy LiquidBees at 1000 rupees per share.
How do I invest in liquid BeES?
Liquidbees can be either bought directly from the fund or from NSE where it is traded. If you purchase directly from the fund through Mutual Fund Service System (MFSS), then you have to buy in a lot size of minimum 2500 units and in multiples of 1 unit thereof.
How does liquid ETF work?
Liquid ETFs are marginable securities. Assuming that you are waiting for a trade and have parked funds in a Liquid ETF, what you can do is pledge them back with your broker and use the margin to take a trade. You don’t even have to sell them and this makes them an extremely convenient tool for cash management.
What are the most liquid ETFs?
Most Actively Traded ETFs
| Ticker | Fund | 30-Day Avg Dollar Volume |
|---|---|---|
| SPY | SPDR S&P 500 ETF Trust | 360 |
| QQQ | Invesco QQQ Trust | 6,/td> |
| EEM | iShares MSCI Emerging Markets ETF | 3,/td> |
| IWM | iShares Russell 2000 ETF | 2,/td> |
