Liquid Fund Return Calculator

Liquid Fund Return Calculator: This liquid mutual fund calculator has been specially developed to provide an estimated return on your investment and total maturity. It also helps you to plan financial goals and determine how much you should invest in a liquid fund for good returns over time.

What is the liquid fund?

A liquid fund is a type of mutual fund that primarily invests in short-term debt instruments. Liquid fund companies invest their investors’ money in debt securities, typically maturing within 90 days. These funds offer relatively stable returns, but the interest is subject to taxation based on the investor’s income tax bracket. Unlike some other mutual funds, liquid funds generally have no exit load if redeemed after a very short holding period.

Liquid fund benefits

If you have a cash line in your bank account and you know that you going to need this money in the next 90 days instead of leaving it in the bank account and only generating 2 to 3 percent returns you must consider investing in a liquid fund that can give you 5 to 6 present return. Liquid funds generate better returns than fixed deposits (FD) and also liquid funds have no locking periods that can you withdrawn at any time.

They also do not have any exit load or penalties as long as you keep the money at least for 7 days. Liquid funds you can withdraw very quickly within a single working day. So what are liquid funds, liquid funds are a type of mutual fund that is a short-term debt instrument, Liquid fund companies invest their investors’ money in debt securities, typically maturing within 90 days.

How does work liquid fund return calculator?

This liquid fund calculator tool works on simple mathematical formulas that provide you with compounding interest on your investment. Let’s see this example:

Key Calculations:

The calculator computes the following values based on the inputs:

• Maturity Amount: This is the total value of your investment at the end of the investment period, which includes both the principal and the returns earned. The formula used is:
  

Maturity Amount=Investment×(1+Interest Rate​)Years / 100

• Here, “Years” is calculated as the number of days divided by 365, assuming the interest compounds annually.
• Estimated Returns (Profit): The gain on the investment, calculated as:
  

Profit=Maturity Amount−Investment

• Inflation Impact: This estimates how inflation diminishes the real value of the returns. It’s calculated by adjusting the investment for inflation:

Inflation Adjusted Amount=Investment×(1+Inflation Rate​)Years / 100

• The impact of inflation on returns is then:

Inflation Impact=Inflation Adjusted Amount−Investment

Example:

For an investment of ₹50,000 at an annual interest rate of 5% for 91 days, with an inflation rate of 3%, the calculator will compute:

• The total value (maturity amount).
• The profit (interest earned).
• The inflation-adjusted impact.

This helps the investor understand how much they will earn and how inflation will affect their returns.

How To use it?

The calculator typically takes the following inputs:

• Investment Amount: The initial amount invested in the liquid fund (e.g., ₹50,000).
• Interest Rate (Annualized Yield): The expected annual return from the fund, usually represented as a percentage (e.g., 5% per annum).
• Investment Duration: The number of days or years the money will be invested in the liquid fund (e.g., 91 days).
• Inflation Rate: The current inflation rate that affects the purchasing power of your returns over time.

Frequently asked questions:

Summary:

We are a team, that has developed this tool for calculating liquid fund returns. How much you can gain returns to invest in liquid funds and it also helps to calculate your inflation of the total amount. So I hope it will help you better than other liquid fund calculator tools.