New Delhi, March 10 -- Bank fixed deposits have been the most popular place in India for decades to invest short-term funds, but liquid funds are now emerging as one of the top substitutes.

To make effective investment decisions, it is important to know the manner in which liquid funds will prove to be more advantageous for investors than bank deposits. Even as FDs guarantee return certainty, liquid funds can still provide higher liquidity, and in certain cases, tax efficiency too. Read on to know more:

First, let us know what liquid funds are. They are a mutual fund investing predominantly in extremely short-term debt securities such as: Treasury bills, commercial paper, and certificates of deposit. Since they invest in short-term secu...