Instant redemption in liquid funds
In a move that could actually equate your mutual fund investments with a savings account, investment in liquid funds could be redeemed instantly.
At the moment if your redemption request is made before 3PM on a working day, the redemption reflects in your bank account the next morning. In a meeting of SEBI's Mutual Fund Advisory Committee (MFAC), the regulator has asked AMCs to consider the redeeming investments up to Rs 2 lakh in liquid funds for retail investors.
Some AMCs are already providing investors with a card linked access to their holdings in liquid funds with limits that are much less than that proposed by SEBI.
The move will definitely have the necessary teeth to directly give competition to the traditional savings bank account if this move comes through solely because liquid funds are more tax efficient than the interest earned by the savings bank balance.