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What type of mutual fund should i invest in if....?


I want low risk and a high amount of liquidity? I want to save at higher rates of return than a bank can offer but if i wish to purchase a home soon, I want to have access to the money.

I am a great advocate of stock funds for retirement plans. But if you are investing for a house you want to buy in the next 1-2 years, you want to invest conservatively. Stocks can crash. Consider the Vanguard Prime Money Market Fund with a current yield of 5.10%:
https://flagship.vanguard.com/VGApp/hnw/...
If you are in a high tax bracket you may prefer their Tax exempt money market funds:
https://flagship.vanguard.com/VGApp/hnw/...
Sometimes other institutions will have a higher teaser rate, but Vanguard tends to have the highest yields I've found over the long run.

short term with liquidity and higher returns means higher risk. Mutual funds, both equity and bond types, are for long term investing. Many fund families will charge you a fee if you sell within 6 months or so. Have you tried www.bankrate.com to fund the higherst rates in the nation on bank accounts/money market funds?

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