Best Liquid ETFs in India 2025

We have all been there where you have extra cash sitting in your bank account. It is not a fortune, but enough that you know it should not just lie around earning 3% interest. You do not want to lock it into an FD either, because what if you need it next week? So, where do you park that money safely and make it work a little harder for you? This is where Liquid ETFs come in, the middle ground between “doing nothing” and “taking too much risk.”  

In this blog, we will explore how Liquid ETFs work, why investors are increasingly using them for short-term parking, and which ones are currently the best options in India.

So, if you have ever wondered how to make your idle money a little more productive without losing sleep over it, this is for you.

What are Liquid ETFs?

• Liquid ETFs are one of the easiest and most convenient ways to park your short-term money while earning a decent return. 
• These ETFs invest in ultra-short-term instruments such as Treasury Bills, Commercial Papers, and Certificates of Deposit, all of which are considered very safe. Since the investments mature within 91 days, the risk of losing money is extremely low. 
• You can buy or sell Liquid ETFs anytime during market hours through your demat and trading account. There is no lock-in period, and you get your money almost instantly when you sell.
• Since Liquid ETFs track the Nifty 1D Rate Index, their returns are usually in line with short-term interest rates, which is generally better than what a savings account offers.
• They also come with low expense ratios and no exit load, making them a good option for investors looking for safety, liquidity, and a little extra return on idle cash.

List of Liquid ETFs

S. No	Funds	Expense Ratio (%)	Launch Date	Net Assets (Cr)	1 Wk Ret (%)	1 Mth Ret (%)	3 Mth Ret (%)	6 Mth Ret (%)	1 Yr Ret (%)
1	ICICI Prudential BSE Liquid Rate ETF – Growth	0.25	2025-03-13	769	0.08	0.41	1.3	2.61	—
2	Mirae Asset Nifty 1D Rate Liquid ETF – Growth	0.15	2024-11-07	285	0.08	0.41	1.31	2.64	—
3	Nippon India Nifty 1D Rate Liquid ETF – Growth	0.49	2025-07-23	11,474	0.1	0.42	1.24	2.39	—
4	SBI NIFTY 1D Rate Liquid ETF – Growth	0.2	2025-08-08	29	0.08	0.4	0.37	–	—
5	Kotak Nifty 1D Rate Liquid ETF	0.08	2023-01-24	1,230	0.1	0.41	1.33	2.64	5.81
6	Zerodha Nifty 1D Rate Liquid ETF	0.27	2024-01-17	5,431	0.08	0.41	1.4	2.62	5.74
7	DSP BSE Liquid Rate ETF	0.3	2024-03-27	381	0.07	0.27	1.09	2.62	5.71
8	Bajaj Finserv Nifty 1D Rate Liquid ETF – Growth	0.19	2024-05-28	645	0.08	0.40	1.27	0.58	5.61
9	Groww Nifty 1D Rate Liquid ETF	0.29	2024-09-24	100	0.08	0.40	1.12	2.86	6.76
10	Shriram Nifty 1D Rate Liquid ETF	0.42	2024-07-05	39	0.08	0.40	1.25	2.52	5.56

Read Also: List of Best Commodity ETFs in India

Benefits of Investing in Liquid ETFs 

If you are looking for a safe place to park your money for a short while, maybe between trades, or just until you decide on your next investment move, Liquid ETFs can be a great option. Some of the benefits of these ETFs are mentioned below. 

1. Easy Access to Your Money

The biggest perk of Liquid ETFs lies in the name, liquid. You can buy or sell them anytime during market hours, just like any other stock. No waiting for redemption or settlement delays, your money is available whenever you need it.

2. Get Better Returns Than a Savings Account

Liquid ETFs usually offer returns that are a bit higher than what you would get from a savings account. They invest in short-term, low-risk instruments like Treasury Bills and Certificates of Deposit, so your money is put to work, even while it is “resting.”

3. Low Costs, No Extra Fees

These ETFs come with very low expense ratios and no entry or exit loads. 

4. Transparent and Flexible

Because they are traded on the stock exchange, you can always see their price and portfolio in real time. You are in complete control, buy, sell, or hold whenever you like.

5. Safe and Steady Option

Liquid ETFs stick to high-quality, short-term debt instruments, which makes them one of the safest options out there. They do not swing wildly with the market, so they are perfect for conservative investors who want peace of mind.

Who Should Invest in Liquid ETFs? 

Below is who can benefit the most from a liquid ETF:

1. Salaried Professionals and Young Investors

If you are someone who wants to park your salary surplus or emergency savings without locking it away, Liquid ETFs are a great choice. You get more than a savings account, and your money stays just as accessible.

2. Traders and Short-Term Investors

Traders often keep extra funds ready to grab market opportunities. Instead of letting it sit idle, they use Liquid ETFs to get small but steady returns between trades and move it back into equities whenever they find a good deal.

3. Corporations and Business Owners

Companies or business owners who need to manage temporary cash flows can use Liquid ETFs for short-term parking. They are safe, flexible, and can be redeemed quickly when funds are needed for operations.

5. Anyone Looking for a Better Alternative to Savings Accounts

If your money is just sitting in a low-interest savings account, you could shift a portion into Liquid ETFs. You will have easy access to it, but with better returns and no long-term commitment.

Risks Involved

Liquid ETFs are not completely risk-free. The risks are small, but you still should know what you are investing in.

1. Low Trading Volumes at Times

Even though they are called Liquid ETFs, some of them do not trade very actively on the stock exchange. This can lead to a small difference between the buy and sell price (called a price spread), especially if you are trying to trade larger amounts.

2. You will need a Demat Account

Unlike a liquid mutual fund, you cannot invest directly from your bank account. You will need a demat and trading account to buy or sell Liquid ETFs. It is not complex, but it adds an extra step if you are new to investing.

3. You Can Trade Only During Market Hours

Liquid ETFs can be sold only when the stock market is open. So if you need cash urgently at night or on a Sunday, you will have to wait until trading hours resume.

Read Also: List of Best Gold ETFs in India

Conclusion 

Liquid ETFs are a simple way to make your idle money earn a little extra while keeping it completely safe and accessible. They bring together the best of two: the stability of a liquid mutual fund and the flexibility of stock trading. If you have cash in your savings account or you want a place to park your money for a short while before investing it elsewhere, Liquid ETFs are an ideal option, low-cost, transparent, and easy to buy or sell whenever you need.

However, remember to go for well-known options with good trading volumes so you do not face liquidity issues.

S.NO.	Check Out These Interesting Posts You Might Enjoy!
1	Mutual Fund vs ETF. Are They Same Or Different?
2	What are ETFs? Are ETFs good for beginner investors?
3	ETF vs Index Fund: Key Differences You Must Know
4	How to Invest in ETFs in India – A Beginner’s Guide
5	What is Nifty BeES ETF? Features, Benefits & How to Invest?
6	What is Gold ETF? Meaning & How to Invest Guide
7	Types of ETFs in India: Find the Best for Your Investment
8	ETF vs Stock – Which One is the Better Investment Option?
9	Top Gold Mutual Funds in India
10	Digital Gold vs Gold ETF: Which is Better?
11	Small-Cap ETFs to Invest in India
12	Best ETFs in India to Invest
13	SBI Gold ETF vs HDFC Gold ETF: Where To Invest?
14	Gold BeES vs Gold ETF: Meaning, How It Works, Taxation
15	Sovereign Gold Bonds vs. Gold ETF: Which is a Better Investment?