Liquid ETFs are debt mutual fund schemes investing in the very short term debt instruments such as Repo and Triparty Repo having maturity of 1 business day. Institutions including banks and corporates are the participants in the repo market borrowing for their short-term requirement. Over the past year, rate of these securities rose to 6% from 3% due to consecutive rate hikes and reduced liquidity in the banking system. This, in turn, inched up the performance of the liquid ETFs. Liquid ETFs are suitable for market participants including traders. Idle funds in the trading account can be parked in liquid ETFs that generate extra returns.