Liquid funds returned 6.38% in the year to March 2026

Where liquid funds stand

Over the twelve months to 8 March 2026, the median liquid fund returned 6.38%. Over the last month it returned 0.45%.

Those two numbers are on different footings. The one-year figure is a full year's return. The one-month figure is an absolute return for 28 days, not an annual rate, and it would be misleading to set the two side by side without converting one of them. That conversion is done below.

Every figure here is computed from each fund's daily NAV, Direct plan, Growth option. Liquid funds publish a NAV for every calendar day, weekends included, and all 42 schemes in the count report a NAV dated Sunday 8 March, so that is the as-of date. Two "unclaimed amount" plans, whose NAVs do not move like a fund's, are left out, and Shriram's second, near-identical liquid code is counted once. The one-year figures cover the 37 funds at least a year old.

The spread is a fraction of a point

The middle half of the category, from the 25th to the 75th percentile, spans 6.32% to 6.41% over the year: 0.09 points. 31 of the 37 funds finished within 0.10 points of the median.

That is what the rules produce. A liquid fund may only hold paper that matures within 91 days, so there is little room for two funds to differ. What separates them is mostly cost and small choices about credit and timing.

The top and the tail

On ₹10 lakh held for the year, the best fund beat the median by about ₹800. The weakest trailed it by about ₹4,900. As usual in this category, the top is crowded and the gap is at the bottom.

The NAVs were not perfectly smooth everywhere. TRUSTMF Liquid has the deepest fall from a peak in the category over three years, 0.49%, and almost all of it came on a single day, 8 February 2024. Every other fund's worst dip in that time was 0.04% or less.

The rate in the last six months is lower

To compare a short window with a year, the short return has to be scaled up. Compounding the median returns over a 365-day year:

All three short windows point to the same pace, about 6.0% a year. For the full year to come out at 6.38%, the first half of it, March to September 2025, must have run faster: working back from the two medians, about 6.7% a year.

So the funds are earning less now than they did a year ago. In a fund that rolls over three-month paper, that is what a lower level of short-term interest rates looks like in the NAV. The three-year figure, 7.00% a year, sits higher still.

One caution on the scaling: the one-month return is rounded to two decimals, and on a figure that small the rounding alone moves the annual rate by about 0.1 point either way.

Next to overnight funds

Overnight funds, which lend for one day at a time, earned less. Across 33 funds at least a year old, the median returned 5.56% over the year, with a range of 5.29% to 5.65%. Their one-month median of 0.37%, scaled the same way, is roughly 4.9% a year.

The gap between the two medians over the year is about 0.8 points. On ₹10 lakh that is about ₹8,200, the price of holding one-day paper instead of three-month paper.

What this does not tell you

A liquid fund is not a savings account. Its NAV can fall, as the one-day drop above shows, and a fund holding paper that defaults can fall much further. The tight spread reflects a calm year for credit.

Past returns don't predict. What a liquid fund earns next depends on where short-term rates go, not on this table.

Tax is at your slab. Gains in a debt fund bought on or after 1 April 2023 are added to your income and taxed at your slab rate, however long you hold.

Where to go from here

The liquid fund and overnight fund pages list every scheme with live returns. The guide to overnight vs liquid vs ultra-short funds explains where each fits, and absolute returns, CAGR and XIRR covers why a one-month figure and a one-year figure can't be compared as they stand.

For the most common use of a liquid fund, see parking an emergency fund in liquid funds.