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Ultra Short Duration Mutual 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, liquid 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.

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Ultra Short Duration Mutual Funds List

Filters
logo Nippon India USD Fund - Direct Growth

7.90%

Fund Size (Cr.) - 7,545

Invest
logo AXIS Ultra Short Duration Fund - Direct Growth

7.75%

Fund Size (Cr.) - 5,595

Invest
logo Aditya Birla SL Savings Fund - Direct Growth

7.88%

Fund Size (Cr.) - 14,988

Invest
logo ICICI Pru Ultra Short Term Fund - Direct Growth

7.70%

Fund Size (Cr.) - 13,589

Invest
logo Tata Ultra Short Term Fund - Direct Growth

7.75%

Fund Size (Cr.) - 5,209

Invest
logo DSP Ultra Short Fund - Direct Growth

7.83%

Fund Size (Cr.) - 2,902

Invest
logo Mirae Asset Ultra Short Duration Fund - Dir Growth

7.81%

Fund Size (Cr.) - 1,602

Invest
logo Sundaram Ultra Short Duration Fund - Direct Growth

7.65%

Fund Size (Cr.) - 2,005

Invest
logo Baroda BNP Paribas Ultra Short Duration Fund-Dir Growth

7.57%

Fund Size (Cr.) - 1,408

Invest
logo Mahindra Manulife Ultra Short Duration Fund-Dir Growth

7.70%

Fund Size (Cr.) - 205

Invest
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Who Should Invest in Ultra Short-Term Funds?

Ultra short term funds are fixed income mutual fund schemes that invest in debt and money market securities. They are less volatile and produce more stable income in comparison to longer duration investments. Ultra short duration fund is best suited for those having surplus funds to park for 1-9 months and earn dividends on them. View More

These funds are subject to both credit risk as well as interest rate risk, and hence they can be a good choice for investors who understand this kind of risk level.
Conservative investors who can remain invested for a period ranging between 3 months to 1 year should go in for these investments.

According to experts, ultra short term funds can be used by investors for both short term investments as well as for systematic transfer plans (STPs). For example, suppose a person intends to invest in equity funds instead of putting all their funds in a one-time lump sum fund. In that case, they may invest it in an ultra short term fund belonging to the same fund house and later instruct your fund manager to switch a regular amount to your equity fund every month.

It should be noted that these funds do not generate assured returns or capital safety. However, if you hold funds for more than three months, then the possibility of incurring losses is much lower.

Popular Ultra Short Duration Mutual Funds

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 7,545
  • 3Y Return
  • 7.19%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 5,595
  • 3Y Return
  • 7.03%

  • Min SIP Investment Amt
  • ₹ ₹ 1000
  • AUM (Cr.)
  • ₹ 14,988
  • 3Y Return
  • 7.00%

  • Min SIP Investment Amt
  • ₹ ₹ 1000
  • AUM (Cr.)
  • ₹ 13,589
  • 3Y Return
  • 6.99%

  • Min SIP Investment Amt
  • ₹ ₹ 150
  • AUM (Cr.)
  • ₹ 5,209
  • 3Y Return
  • 6.98%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 2,902
  • 3Y Return
  • 6.97%

  • Min SIP Investment Amt
  • ₹ ₹ 99
  • AUM (Cr.)
  • ₹ 1,602
  • 3Y Return
  • 6.96%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 2,005
  • 3Y Return
  • 6.94%

  • Min SIP Investment Amt
  • ₹ ₹ 500
  • AUM (Cr.)
  • ₹ 1,408
  • 3Y Return
  • 6.93%

  • Min SIP Investment Amt
  • ₹ ₹ 500
  • AUM (Cr.)
  • ₹ 205
  • 3Y Return
  • 6.89%

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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