You have some surplus money that you may need over the next 30 to 45 days. Which of the following mutual fund schemes should you consider?(1.0 Marks)Liquid FundAEquity Linked Savings Scheme (ELSS)B3-Year Fixed Maturity PlanCBalanced Fund
Question
You have some surplus money that you may need over the next 30 to 45 days. Which of the following mutual fund schemes should you consider?(1.0 Marks)Liquid FundAEquity Linked Savings Scheme (ELSS)B3-Year Fixed Maturity PlanCBalanced Fund
Solution
You should consider investing in a Liquid Fund.
Here's why:
Liquid funds are a type of mutual fund that invest in securities with a residual maturity of up to 91 days. They are suitable for short-term investment horizons, like 30 to 45 days, as mentioned in your case.
The other options are not suitable for the following reasons:
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Equity Linked Savings Scheme (ELSS): These are primarily long-term investment options with a lock-in period of 3 years. They are not suitable for short-term needs.
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3-Year Fixed Maturity Plan: As the name suggests, these plans have a fixed maturity of 3 years. They are not suitable for a short-term investment horizon of 30 to 45 days.
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Balanced Fund: These funds invest in a mix of equity and debt, and are suitable for medium to long-term investment horizons. They are not ideal for short-term investment needs.
Therefore, a Liquid Fund is the most suitable option for your needs.
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