Where will you get the facility of investment at the lowest cost?

MumbaiThere is a strange compulsion of Retail Investors here. Most of these investors depend on depositing their capital in a savings bank account. Whether we talk about Direct Equity Investors or Derivative Traders, the profit earned by both gets deposited either in the savings bank account or in the margin account of the broker. In this, the investors do not get any return. The proceeds of equity sale are available only on T+2 (Trading and Two Days). Further, investors have to face liquidity crunch as well.

what is the solution
When you engage in futures and options trading, there may be a need to raise margin money by transferring the required capital to your margin account. It is a consumption affair that can rob them of the trading opportunities offered in volatile markets. Retail Investor Liquid to tackle all these unique problems exchange traded funds (ETF) and enjoy the added benefit of return on such trading capital without taking much risk. To reinvest, liquid ETFs can provide reasonable returns with low risk and high level of liquidity.

Which is the cheapest etf
Another approach adopted by ICICI Prudential with respect to Liquid ETFs is that the dividend earned is credited to the bank account of the investors. Among liquid fund ETFs, ICICI Prudential offers the cheapest ETF with an overall expense ratio of just 0.25%. For example, the DSP Nifty Liquid ETF costs 0.64 per cent while the Nippon India ETF’s Liquid BeES charges 0.69 per cent. For retail investors, it is prudent to buy units of a liquid ETF by instructing the broker to invest the same amount at the time of sale of equity shares. When looking to buy some equity shares, one can ask a broker to make the purchase using a liquid ETF which can be used as margin money.

Stable Returns from Liquid ETFs
The returns generated from liquid ETFs are relatively more stable as such short-term debt securities are less prone to price fluctuations as compared to longer term ones. Moreover, these liquid ETF units can be freely sold in the spot market in a short span of time and can be easily cashed out. Also, no Securities Transaction Tax (STT) is applicable on the purchase or sale of liquid ETF units. Whereas the returns on liquid ETFs cannot be compared with what other categories of debt mutual funds offer. If you are a general investor who is wondering where to invest for a short period of time and gives better returns than traditional investment options, then a liquid ETF can prove to be a better fit for it.