Overnight Mutual Funds

Overnight funds are the most recent addition to India’s available mutual fund (MF) categories. These open-ended funds invest in debt securities, Reverse Repos, and Collateralized Borrowing and Lending Obligation (CBLOs) with one-day (overnight) maturity. View More

Although retail investors can invest in overnight funds, these MFs are preferred by big institutional investors and corporate houses. Overnight funds returns are higher than current bank accounts and are less riskier than equity funds since they have minimal default and credit risks. The biggest advantage of overnight funds is that they are 100% liquid and can be bought and sold on the same day.

Best Overnight Mutual Funds

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Overnight Mutual Funds List

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Who Should Invest in Overnight Mutual Funds?

Features of Overnight Mutual Funds

Factors to consider while investing in Overnight Funds

Taxability of Overnight Funds

Risks Involved With Overnight Funds

Advantages of Overnight Mutual Funds

Popular Overnight Mutual Funds

  • Min SIP Investment Amt
  • ₹ -
  • AUM (Cr.)
  • ₹ 60
  • 3Y Return
  • 5.96%

  • Min SIP Investment Amt
  • ₹ ₹ 1000
  • AUM (Cr.)
  • ₹ 8,135
  • 3Y Return
  • 5.90%

  • Min SIP Investment Amt
  • ₹ ₹ 99
  • AUM (Cr.)
  • ₹ 636
  • 3Y Return
  • 5.90%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 8,050
  • 3Y Return
  • 5.89%

  • Min SIP Investment Amt
  • ₹ ₹ 500
  • AUM (Cr.)
  • ₹ 2,214
  • 3Y Return
  • 5.89%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 2,146
  • 3Y Return
  • 5.88%

  • Min SIP Investment Amt
  • ₹ -
  • AUM (Cr.)
  • ₹ 6,038
  • 3Y Return
  • 5.88%

  • Min SIP Investment Amt
  • ₹ -
  • AUM (Cr.)
  • ₹ 158
  • 3Y Return
  • 5.87%

  • Min SIP Investment Amt
  • ₹ -
  • AUM (Cr.)
  • ₹ 7,876
  • 3Y Return
  • 5.87%

  • Min SIP Investment Amt
  • ₹ ₹ 1000
  • AUM (Cr.)
  • ₹ 4,645
  • 3Y Return
  • 5.87%

FAQs

Yes, the returns on overnight funds are taxable. However, they are more tax efficient as compared to other investment options. The tax rates depend on the period for which you hold the funds. If you hold the funds for less than three years, you must pay a Short-Term Capital Gains Tax on the returns. The Short-Term Capital Gains Tax rate will be decided based on the income slab of the investor.

However, if you hold the fund for more than three years, you will have to pay a Long-Term Capital Gains Tax at a flat rate of 20%.

There are several benefits of investing in overnight funds. The overnight funds are held for a shorter period. Hence, they are secure, and you do not lose a lot of capital in case of interest fluctuations. Also, if you have a lot of idle funds and want to earn some returns on them, you can invest them in an overnight fund.

Overnight funds are debt funds that get their returns from debt securities. These funds have an overnight maturity. These open-ended funds have a residual maturity of day. The fund is quite flexible and is a liquid form of different debts. If you are interested in investing in overnight funds, you need to place a request for the purchase and the redemption of the funds during regular business hours.

These funds are ideal for risk-averse investors looking for short-term investments and short-term gains. If you want a weekly investment option, you can invest in short-term funds like overnight funds. You can even hold these securities for a day. These funds are ideal for investors who want flexibility with their investments.

Any interest changes will impact the overnight funds directly. For instance, if you make the investment at 1 AM today and the RBI reduces the interest rate at 4 PM on the same day, the returns on the overnight fund will decrease substantially. However, your returns will increase considerably if the RBI increases the interest rate within the same day.

Several overnight mutual funds are performing well. Some of the best-performing overnight mutual funds of the year are UTI Overnight Fund, SBI Overnight Fund, and HDFC Overnight Fund.

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