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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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logo JM Overnight Fund-Unclaimed IDCW-Dir Growth

6.78%

Fund Size (Cr.) - 238

Invest
logo Bank of India Overnight Fund - Direct Growth

6.68%

Fund Size (Cr.) - 41

Invest
logo AXIS Overnight Fund - Direct Growth

6.63%

Fund Size (Cr.) - 6,348

Invest
logo Mirae Asset Overnight Fund - Direct Growth

6.60%

Fund Size (Cr.) - 391

Invest
logo Nippon India Overnight Fund - Direct Growth

6.62%

Fund Size (Cr.) - 4,738

Invest
logo Tata Overnight Fund - Direct Growth

6.62%

Fund Size (Cr.) - 1,774

Invest
logo HSBC Overnight Fund - Direct Growth

6.59%

Fund Size (Cr.) - 2,086

Invest
logo DSP Overnight Fund - Direct Growth

6.59%

Fund Size (Cr.) - 1,367

Invest
logo Kotak Overnight Fund - Direct Growth

6.60%

Fund Size (Cr.) - 3,499

Invest
logo Baroda BNP Paribas Overnight Fund - Direct Growth

6.60%

Fund Size (Cr.) - 582

Invest
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Who Should Invest in Overnight Mutual Funds?

Overnight funds are the best investment instrument for high net worth investors and big financial institutions. These funds provide them with higher returns than conventional bank current deposits. Here is a lay down on the types of investors who prefer to invest in overnight mutual funds: View More

Investors with a super-low investment horizon can invest in overnight funds. These funds can be sold on the next day or any day you want.
If you are looking for a better investment option than a current account, overnight funds will suit you well. Corporate establishments and large financial institutions invest their idle or surplus cash in these funds for a few days until they need it for working capital requirements.
Investors looking to reap the benefits of STP or Systematic Transfer Plan can invest in overnight funds. Investors can transfer their money from an overnight fund to equity or pure debt funds using the STP facility.
Although retail investors can also invest in some of the best overnight funds, they prefer liquid funds. Liquid funds are like overnight funds, but they usually provide higher returns than overnight funds. Also, the credit and interest rate risks of liquid and overnight funds are similar.
Any investor willing to understand the fundamentals of the debt market before investing more money.
Any investor willing to get better post-tax returns than bank fixed deposits.
Any investor looking for a 100% liquid investment option with no exit load or fee for withdrawing prematurely.

Popular Overnight Mutual Funds

  • Min SIP Investment Amt
  • ₹ ₹ 500
  • AUM (Cr.)
  • ₹ 238
  • 3Y Return
  • 6.53%

  • Min SIP Investment Amt
  • ₹ -
  • AUM (Cr.)
  • ₹ 41
  • 3Y Return
  • 6.44%

  • Min SIP Investment Amt
  • ₹ ₹ 1000
  • AUM (Cr.)
  • ₹ 6,348
  • 3Y Return
  • 6.39%

  • Min SIP Investment Amt
  • ₹ ₹ 99
  • AUM (Cr.)
  • ₹ 391
  • 3Y Return
  • 6.38%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 4,738
  • 3Y Return
  • 6.38%

  • Min SIP Investment Amt
  • ₹ ₹ 1000
  • AUM (Cr.)
  • ₹ 1,774
  • 3Y Return
  • 6.37%

  • Min SIP Investment Amt
  • ₹ ₹ 500
  • AUM (Cr.)
  • ₹ 2,086
  • 3Y Return
  • 6.37%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 1,367
  • 3Y Return
  • 6.37%

  • Min SIP Investment Amt
  • ₹ -
  • AUM (Cr.)
  • ₹ 3,499
  • 3Y Return
  • 6.37%

  • Min SIP Investment Amt
  • ₹ ₹ 500
  • AUM (Cr.)
  • ₹ 582
  • 3Y Return
  • 6.36%

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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