As I cannot take risk where should I invest in lieu of fixed deposits

Apologies for replying to you late. Following are the answers to your query -

1. Yes, liquid funds are the safest funds across all category of mutual funds. But you should not invest your fixed deposit money into liquid funds. For that, long term bond funds / income fund are ideal https://www.advisorkhoj.com/mutual-funds... Long term bond funds / income fund can give better return than fixed deposits https://www.advisorkhoj.com/mutual-funds...

However, the surplus amount lying in your savings bank account can be invested in liquid funds.

You can invest and redeem liquid funds anytime and there is no entry or exit loads. The redemption proceeds are credited to your bank account the next working day from the date of redemption.As you have already seen that liquid funds give higher post tax return than savings bank https://www.advisorkhoj.com/mutual-funds...

2. From liquid funds, you can expect 6.50-7% return compared to around 4% from savings bank account. From long term debt funds, you can expect return of 9-10% compared to 7-7.50% from fixed deposits.

3. For getting monthly return from debt funds you can invest in debt funds which give monthly dividends - https://www.advisorkhoj.com/mutual-funds...

4. Yes, balanced funds are the best option if you can take moderate risk and invest with a view of 5 years. As balanced funds invests 65% in equities and rest in debt instruments it is safer than pure equity funds. Also, balanced funds keep re-balancing this ratio based on appreciation / erosion in the portfolio.

You can invest in balanced funds and withdraw a fixed amount every month through SWP https://www.advisorkhoj.com/mutual-funds... You can also invest in balanced funds which pays monthly dividend https://www.advisorkhoj.com/mutual-funds...

Please go through the following to understand it better -

https://www.advisorkhoj.com/articles/Mutual-Funds...

https://www.advisorkhoj.com/articles/Mutual-Funds...

https://www.advisorkhoj.com/post-your-queries...

Some of the top performing balanced funds are - ICICI Prudential Balanced Fund, HDFC Balanced Fund, SBI Magnum Balanced Fund, DSP BlackRock Balanced Fund and L&T India Prudence Fund.

Hope we could answer all points in your query and you found it useful.