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  • Short Term Mutual Funds

  • What are Short Term Mutual Funds?

    Short Term Mutual Funds are open-ended schemes that invest in assets that have a maturity of minimum 15 - 91 days or below, depending on the asset. This type of funds is ideal for investors who look for low-risk asset options. If the investor wishes to invest funds for a short duration (15 days or less), he/she can go for liquid funds and if they wish to invest funds in funds with a maturity period of 2 months to 4 months, they can opt for ultra short-term mutual funds.

    Returns on Short Term Mutual Funds

    Compared to bank deposits like savings account and fixed deposits, short-term funds offer higher returns for investments held for a short duration. The percentage of returns range from 8%-9%, depending on the assets available in your short-term mutual fund portfolio. With attractive tax benefits, the overall return on investment is higher than the post-tax returns earned from other investment schemes.

    Taxation

    Short-term mutual funds are available in the following options – dividend option or the growth option. If the investor opts for the growth option, the tax treatment will be similar to that of bank fixed deposits. The income earned from the funds will be considered part of the investor’s overall income earned and taxed accordingly. However, if the investor goes for a dividend option the income earned from the investment is exempted from tax.

    Top Short-Term Funds Available in India

    Some of the short-term mutual funds that perform well in the market are listed below:

    Debt – Ultra Short Term Plans

    • Baroda Pioneer Credit Opportunities Fund - Plan A - Growth
    • ICICI Prudential Banking & PSU Debt Fund - Regular Plan - Growth
    • ICICI Prudential Ultra Short Term Plan - Retail Plan - Growth
    • Reliance Medium Term Fund - Growth
    • Kotak Banking and PSU Debt Fund - Growth
    • Birla Sun Life Cash Manager - Growth
    • Union KBC Ultra Short Term Debt Fund - Growth
    • Kotak Treasury Advantage Fund - Growth
    • JM Money Manager Fund - Super Plus Plan - Growth
    • ICICI Prudential Savings Fund - Plan B - Growth
    • BOI AXA Treasury Advantage Fund - Regular Plan - Growth
    • JM Money Manager Fund - Regular Plan - Growth
    • Franklin India Low Duration Fund - Monthly Dividend
    • Canara Robeco Savings Plus Fund - Regular Plan - Growth
    • Indiabulls Ultra Short Term Fund - Growth
    • ICICI Prudential Flexible Income Plan - Growth
    • Reliance Money Manager Fund - Retail Plan - Growth
    • SBI Treasury Advantage Fund - Regular Plan - Growth
    • Peerless Ultra Short Term Fund - Regular Plan - Growth
    • HSBC Ultra Short Term Bond Fund - Regular Plan - Growth

    Floating Rate Debt Funds – Short Term

    • Reliance Floating Rate Fund - Short Term Plan - Growth
    • L&T Floating Rate Fund - Regular Plan - Cumulative
    • HDFC Floating Rate Income Fund - Short Term Plan - Retail Plan - Growth
    • UTI Floating Rate Fund - Short Term Plan - Growth
    • Escorts Short Term Debt - Growth
    • DHFL Pramerica Short Term Floating rate Fund - Growth
    • Birla Sun Life Floating Rate Fund - Short Term Plan - Retail - Growth
    • Sundaram Flexible Fund - Short Term - Growth

    Gilt Mutual Funds (Debt) – Short Term

    • HDFC Gilt Fund - Short Term - Growth
    • ICICI Prudential Gilt Fund - Treasury Plan - PF Option - Regular Plan - Growth
    • SBI Magnum Gilt Fund - Short Term - Growth
    • Tata Gilt Securities Fund - Short Maturity Fund - Growth
    • ICICI Prudential Short Term Gilt Fund - Regular Plan - Growth
    • Tata Gilt Securities Fund - Short Maturity Fund - Growth
    • UTI G-Sec Short Term Plan - Growth
    • IDFC Government Securities Fund - Short Term Plan - Regular Plan - Growth
    • DSP Black Rock Treasury Bill Fund - Regular Plan - Growth

    Income Mutual Funds (Debt) – Short Term

    • HDFC High Interest Fund - Short Term Plan - Growth
    • Birla Sun Life Short Term Opportunities Fund - Growth
    • ICICI Prudential Short Term Plan - Regular Plan - Growth
    • Baroda Pioneer Short Term Bond Fund - Growth
    • DHFL Pramerica Short Maturity Fund - Growth
    • Reliance Short Term Fund - Growth
    • BNP Paribas Short Term Income Fund - Regular Plan - Growth
    • L&T Short Term Income Fund - Regular Plan - Growth
    • Franklin India Short Term Income Plan - Growth
    • DSP Black Rock Banking & PSU Debt Fund - Growth
    • Birla Sun Life Dynamic Bond Fund - Retail Plan - Growth
    • Birla Sun Life Treasury Optimizer Plan - Retail - Growth
    • JM Short Term Fund - Regular Plan - Growth
    • UTI Banking & PSU Debt Fund - Regular Plan - Growth
    • UTI Short Term Income Fund - Regular - Growth
    • Birla Sun Life Short Term Fund - Growth
    • IDFC Corporate Bond Fund - Regular Plan - Growth
    • Invesco India Short Term Fund - Growth
    • UTI Income Opportunities Fund - Growth
    • DSP Black Rock Short Term Fund - Regular Plan - Growth
    Disclaimer

    Mutual Fund investments will be subject to market risks. Any mutual fund listed in the document does not guarantee fund performance or its underlying creditworthiness. Do read the mutual fund document thoroughly before investing. Specific investment needs and other factors have to be taken into account while designing a mutual fund portfolio.

    GST rate of 18% applicable for all financial services effective July 1, 2017.

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