New Delhi, April 8 -- For active investors or traders who frequently buy and sell stocks, parking funds in a broking account is convenient. However, funds in these accounts don't yield any interest.

Instead, one can consider using liquid ETFs or exchange-traded funds to earn interest. If your broker allows it, you can simultaneously sell liquid ETF units to buy stocks and vice-versa.

To understand how liquid ETFs work, we need to understand Treps or tri-party repos, as this is where these ETFs gain exposure. Treps is an arrangement used for short-term borrowing and lending.

Liquid ETFs invest in Treps with a one-day maturity. A borrower pledges government securities (treasury bills) to a lender in exchange for funds. The borrower agree...