One can make investments in mutual funds, including liquid funds, through two modes –
lump sum or Systematic Investment Plan (SIP). While lump sum investment represents a
one-time investment, SIP implies periodical investments made automatically in the specified
mutual fund scheme. Liquid funds find their utility as a practical solution for parking of
surplus funds and emergency funds. As such, investors may consider investing in liquid
funds in lump sum as and when such surplus funds arise.