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Floater Mutual Funds

Floater Mutual Funds invest primarily in floating-rate debt instruments like corporate bonds, government securities, and PSU paper, whose interest rates adjust with changing benchmarks (e.g., RBI repo rate or MIBOR). Because the interest payout fluctuates with prevailing rates, these funds offer better protection against rate hikes compared to fixed-rate debt schemes.

They are a good choice for investors seeking liquidity and resilience during uncertain economic cycles. Frequent repricing of securities helps maintain yield even in tightening environments. For a convenient way to get exposure to floating-rate bonds and manage interest-rate risks without picking individual papers yourself, floater funds are an excellent option to look at.

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List of Floater Mutual Funds

Filters
logo Franklin India Floating Rate Fund - Direct Growth

8.63%

Fund Size (Cr.) - 304

Invest
logo DSP Floater Fund - Direct Growth

7.95%

Fund Size (Cr.) - 805

Invest
logo ICICI Pru Floating Interest Fund-Direct Growth

8.56%

Fund Size (Cr.) - 8,966

Invest
logo Kotak Floating Rate Fund - Direct Growth

8.72%

Fund Size (Cr.) - 4,087

Invest
logo AXIS Floater Fund - Direct Growth

7.56%

Fund Size (Cr.) - 259

Invest
logo HDFC Floating Rate Debt Fund - Direct Growth

8.28%

Fund Size (Cr.) - 15,210

Invest
logo Nippon India Floater Fund - Direct Growth

8.51%

Fund Size (Cr.) - 7,708

Invest
logo Bandhan Floater Fund - Direct Growth

8.40%

Fund Size (Cr.) - 320

Invest
logo Aditya Birla SL Floating Rate Fund-Direct Growth

8.14%

Fund Size (Cr.) - 12,672

Invest
logo Tata Floating Rate Fund-Direct Growth

8.27%

Fund Size (Cr.) - 197

Invest
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How Do Floater Funds Work?

Floater Mutual Funds are a category of debt funds that allocate a significant portion—typically around 65%—of their assets to floating-rate debt instruments. These instruments, which often include corporate bonds and other non-government securities, have interest rates that adjust periodically in line with market benchmarks such as the RBI's repo rate or the MIBOR (Mumbai Interbank Offered Rate).

The functioning of these funds is closely tied to movements in interest rates. When the Reserve Bank of India hikes the repo rate, the yields on floating-rate instruments rise correspondingly, boosting the fund’s income potential. On the other hand, a decline in the repo rate leads to lower interest payouts, though the impact is usually less severe compared to fixed-rate bond funds. This direct correlation makes floater funds especially attractive during periods when interest rates are expected to rise. Fund managers actively curate a portfolio with varying maturities and credit profiles to optimise returns while keeping risk in check. 
 

Popular Floater Mutual Funds

  • Min SIP Investment Amt
  • ₹ ₹ 500
  • AUM (Cr.)
  • ₹ 304
  • 3Y Return
  • 8.59%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 805
  • 3Y Return
  • 8.53%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 8,966
  • 3Y Return
  • 8.53%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 4,087
  • 3Y Return
  • 8.30%

  • Min SIP Investment Amt
  • ₹ ₹ 1000
  • AUM (Cr.)
  • ₹ 259
  • 3Y Return
  • 8.22%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 15,210
  • 3Y Return
  • 8.21%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 7,708
  • 3Y Return
  • 8.17%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 320
  • 3Y Return
  • 8.05%

  • Min SIP Investment Amt
  • ₹ ₹ 1000
  • AUM (Cr.)
  • ₹ 12,672
  • 3Y Return
  • 7.99%

  • Min SIP Investment Amt
  • ₹ ₹ 150
  • AUM (Cr.)
  • ₹ 197
  • 3Y Return
  • 7.90%

Other Calculators

FAQs

Most floater funds charge a small exit load—typically 0–1%—if redeemed within 30–90 days; always confirm via the scheme’s Key Information Memorandum.

Expense ratios typically range from 0.2% to 0.7%, depending on fund house and portfolio strategies.

Annual returns usually fall between 6% to 9%, depending on interest rate environments and credit yields in the portfolio.

No, they have relatively low risk. But since they rely on rate-sensitive bonds, returns can dip if benchmark rates decline sharply.

Yes, if you’re seeking stable income, inflation protection, and minimal interest rate risk without locking in funds.

As a general rule, allocate 10–25% of your debt exposure to floater funds, based on your investor profile and portfolio goals.

Liquid funds invest in very short-term debt (up to 91 days), offering stability. Floater funds hold longer-term floating bonds, offering slightly higher returns with some rate sensitivity.

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