Zerodha’s growing focus on liquid exchange-traded funds (ETFs) is quietly reshaping how Indian investors park short-term surplus money. Traditionally dominated by bank fixed deposits and liquid mutual funds, this segment is witnessing a gradual shift as investors look for low-cost, transparent, and easily tradable alternatives.
Liquid ETFs invest in short-term money market instruments such as treasury bills and commercial papers, offering relatively stable returns with high liquidity. Zerodha’s push has made these products more visible and accessible, especially to retail investors who prefer simple, no-lock-in instruments that can be bought and sold like stocks.
Market participants note that Zerodha’s large and active user base has helped bring scale to liquid ETFs, improving trading volumes and reducing tracking errors. As a result, investors are increasingly using these ETFs as a temporary parking tool for idle cash rather than keeping money in savings accounts that offer lower returns.
This trend reflects a broader change in investor behaviour, where digital-first platforms are influencing fixed-income choices. The ease of execution, lower expense ratios compared to traditional funds, and real-time price discovery are making liquid ETFs an attractive option for both retail and institutional investors.
While the shift is still gradual, experts believe that growing awareness and consistent performance could accelerate adoption over time. Zerodha’s role in promoting these products highlights how fintech platforms are not only disrupting equity investing but are also driving a silent transformation in India’s fixed-income landscape.
