Ultra Short Duration Funds

Ultra short term funds are mutual funds that invest in securities and instruments belonging to the fixed-income earning category, with maturities of up to six months. They are close to liquid funds as they offer more liquidity than any other fund category with long term investments. View More

As per SEBI guidelines for liquid funds, such funds cannot invest in securities that mature beyond 91 days. But these rules do not apply to ultra short term funds. These funds can invest in funds that mature before or after 91 days. The horizon for these funds ranges from a week to 18 months.

Best Ultra Short Duration Funds

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Ultra Short Duration Funds Mutual Funds List

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Who Should Invest in Ultra Short-Term Funds?

Features of Ultra Short Term Funds

Factors to consider while investing in Ultra Short Term Funds

Taxability of Ultra Short Term Funds

Risks Involved With Ultra Short Term Funds

Advantage of Ultra Short Term Mutual Funds

Popular Ultra Short Duration Funds

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 7,257
  • 3Y Return
  • 6.86%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 5,202
  • 3Y Return
  • 6.64%

  • Min SIP Investment Amt
  • ₹ ₹ 1000
  • AUM (Cr.)
  • ₹ 13,757
  • 3Y Return
  • 6.62%

  • Min SIP Investment Amt
  • ₹ ₹ 1000
  • AUM (Cr.)
  • ₹ 12,417
  • 3Y Return
  • 6.59%

  • Min SIP Investment Amt
  • ₹ ₹ 500
  • AUM (Cr.)
  • ₹ 1,045
  • 3Y Return
  • 6.55%

  • Min SIP Investment Amt
  • ₹ ₹ 150
  • AUM (Cr.)
  • ₹ 2,620
  • 3Y Return
  • 6.55%

  • Min SIP Investment Amt
  • ₹ ₹ 99
  • AUM (Cr.)
  • ₹ 1,262
  • 3Y Return
  • 6.53%

  • Min SIP Investment Amt
  • ₹ ₹ 2000
  • AUM (Cr.)
  • ₹ 1,668
  • 3Y Return
  • 6.50%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 2,780
  • 3Y Return
  • 6.49%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 13,329
  • 3Y Return
  • 6.46%

FAQs

Open-ended debt mutual funds, known as ultra short-term funds, invest in securities with maturities between three and six months. Conservative investors who value dependable returns should choose these ETFs.

Capital gains from investing in ultra short-duration funds could be taxed. The holding period, the time you remain invested in this fund, determines the tax rate.

The STCG increases the investor’s income from these funds, and his income bracket determines his tax rate. Taxes on long-term capital gains (LTCG) from these funds are 20% after indexation and 10% without it.

Some of the top ultra short-term duration funds are ICICI Prudential Ultra Short-term fund growth, Aditya Birla Sun Life Savings- Growth, L&T Ultra Short Term Fund-Growth, Canara Robeco Ultra Short-term fund stable growth, UTI Ultra Short-term fund stable growth, PGIM India Ultra Short Duration Direct-growth, SBI Magnum Ultra Short Duration Fund Direct-growth, Invesco India Ultra Short-term fund direct-growth, Tata Ultra Short-term fund direct-growth, and Axis Ultra Short-term fund Direct-growth.

Some factors that need to be considered before investing in ultra-short duration funds are risk, return, cost, tax on gains, financial horizon, and financial targets.

Due to the short maturity of their underlying assets, ultra short-term debt funds, unlike other debt funds, are partially immune to interest rate threats. These funds are somewhat riskier than liquid funds, nevertheless.

When the fund manager includes low-credit rating securities in his investing strategy with the hope of future improvement, he may add credit risk. Additionally, the addition of government securities may cause the fund’s volatility to rise above expectations.

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