3 Things You Must Know About Liquid BeES Before Applying For the Debt Scheme

ByLily A Singh

LiquidBees is an Exchange Traded Fund (ETF) well-known for investing in the overnight money market. Therefore, it offers high safety and liquidity. You get safety since the market keeps your money for an ultra short term (overnight). Plus, it is monitored by the RBI to make sure that you face no problems in terms of liquidity or repayment.

Here are 3 things to know about LiquidBees before you apply for this debt scheme.

How to Purchase and Sell LiquidBees?

Investors can buy and sell them like stocks. So, you can purchase LiquidBees from the NSE where it’s traded or from the fund directly. If you buy them from the fund via Mutual Fund Service System, you need to purchase at least 2500 units and henceforth, in multiples of a unit. In case you purchase from the NSE, you can buy 1 unit and in multiples of it henceforth.

Likewise, you can redeem as many as 2500 units and then in multiples of 0.001 units from the fund directly. The NSE lets you redeem 0.001 units and thereof, in its multiples.

LiquidBees can be settled solely in Demat (electronic) mode on the T+2 basis in the Rolling Segment.

Returns from LiquidBees

As listed under the NSE, the price of LiquidBees is fixed at ₹1,000 per unit. Then how can you earn returns? The scheme generates returns as daily dividends, not capital appreciation. You need to reinvest these returns in the scheme. Each month, you’ll be credited with the units that arise out of your reinvestment. You get the facility to purchase back fractional units credited from the dividend payment.

If you opt for LiquidBees, the fund seeks to keep the NAV fixed by distributing income from it as it is generated. The returns are not taxable since you get them as dividends that aren’t subject to taxation.

How Does It Benefit Equity Investors?

LiquidBees can especially benefit an equity investor when the money sits idle in his/her trading account without earning any returns or interest. This is possible after you book profit from selling stocks bor when you can’t find any viable investment options. Then until a new investment opportunity comes up, you usually transfer the money to your savings account so that it earns interest.

In such cases of having idle cash in a trading account, an equity investor can benefit from choosing LiquidBees since it:

  • Saves effort and time in transferring funds to and from the savings and trading accounts.
  • Offers high liquidity and allows the investor to take advantage of new investment opportunities whenever they appear.
  • Generates higher returns than a savings bank account. Plus, the returns are tax-free.

To conclude, you as an investor can find LiquidBees ETF scheme helpful if you:

  • Are having excess funds for a short period that you may need anytime in the future
  • Want an income with low-risk and high liquidity
  • Wish to invest in debt and money market instruments

If the above conditions satisfy your case, you can consider investing in LiquidBees right away.