Liquid funds returned 6.44% in a year, and sped up

Five months after March

In early March, the median liquid fund had returned 6.38% over the previous year, and the most recent six months were running at only about 6.0% a year. As of Sunday 23 August 2026, the one-year median is 6.44%: hardly changed. What has changed is the pace underneath it.

All figures are computed from daily NAVs, Direct plan, Growth option. Liquid funds publish a NAV for every calendar day, and all 42 funds in the count report one dated 23 August, so that is the as-of date. Unclaimed-amount plans and Shriram's second liquid code are left out, as in March. The one-year figures cover the 39 funds now at least a year old.

March against August

The one-year median rose by 0.06 points. The six-month figure tells the real story. It is an absolute return over 181 days in both cases, so it can be scaled up by compounding over 365 days. In March that came to about 6.0% a year; now it is about 6.9%.

The year to 23 August therefore has a slow first half and a fast second half. Working back from the medians, the six months to late February ran at about 6.0% a year, and the six months since at about 6.9%. A liquid fund rolls over paper of up to three months, so its NAV follows short-term interest rates within weeks. Faster NAV growth in a liquid fund mostly reflects higher yields on the paper it buys.

Month by month

Each window is 31 days. Two months, those to 30 April and 30 June, ran well ahead of the others at 0.68%, which is about 8.3% a year scaled up. The other three were between 0.50% and 0.52%, or about 6.0% to 6.3%. The latest month, to 23 August, came in at 0.54%.

The ranking barely moves

Aditya Birla Sun Life's fund is at the top again, and Navi's at the bottom again. JioBlackRock Liquid, which has now completed its first year, came straight in near the top at 6.51%.

On ₹10 lakh held for the year, the best fund beat the median by about ₹900 and the weakest trailed it by about ₹6,600. The pattern from March holds: the top is crowded, and the gap is at the bottom.

The gap to overnight funds widened

Overnight funds, which lend for one day, have not picked up the same way. Their median one-year return slipped from 5.56% in March to 5.31%, across 36 funds, and their last month, 0.43%, scales to about 5.2% a year.

So the gap between the two medians over a year has widened from 0.82 points in March to 1.13 points now. On ₹10 lakh that is about ₹11,300 a year for holding three-month paper instead of one-day loans.

What this does not tell you

A liquid fund is not a savings account. Its NAV can fall if a holding defaults. This has been a calm year for credit.

Past returns don't predict. The faster pace of the last six months lasts only as long as short-term rates stay where they are.

Scaling short windows is approximate. Monthly medians are rounded to two decimals, which moves each annual figure by about 0.1 point either way.

Tax is at your slab. Gains in a debt fund bought on or after 1 April 2023 are taxed at your income-tax slab rate.

Where to go from here

The liquid fund and overnight fund pages list every scheme with live returns. The guide to parking an emergency fund in liquid funds covers the most common use.

This post updates liquid fund returns in March. For the next rung out, see overnight vs liquid vs money market funds in May.