Best Low Duration Debt Mutual Funds

Let us first understand Low Duration Debt Mutual Funds. Individuals and Institutions raise debt when they need money, and pay interest based on the interest rate and duration of the debt. The interest rates can fluctuate based on the economic scenario.

Two most important factors in this transaction are:

I. The credibility of individual or institution who has raised debt

II. The time and duration of the debt is raised

Examples of debt: Fixed deposits by Banks, Debt raised by government, Fixed deposits by companies

These funds invest in short term (one year) bonds. If you are saving for very short-term goals like a vacation or buying an automobile, then this category is ideal for gains within one year. It is also an excellent resort to park your money until you decide where to invest or spend next. Returns are taxed as per your income tax slab if sold before three years and have negligible tax post that period.

Purpose: Invest here for your short term goals like a vacation, buying a bike, jewelry or expensive gadget.

Top 10 Low Duration Mutual Funds

Fund NameCategoryRisk1Y ReturnsRatingFund Size(in Cr)
Kotak Low Duration FundDebtModerate7.4%5star4,592
ICICI Prudential Savings PlanDebtModerately Low7.0%4star15,817
Aditya Birla Sun Life Low DurationDebtModerately Low7.5%4star7,788
Principal Low Duration FundDebtModerately Low6.3%4star735
SBI Magnum Low Duration FundDebtModerately Low7.2%3star6,615
L&T Low Duration FundDebtModerate6.2%3star1,309
UTI Treasury Advantage FundDebtModerately Low6.8%3star8,024
Sundaram Low Duration FundDebtModerately Low7.1%3star1,226
IDFC Low Duration FundDebtModerately Low6.8%3star3,186
Mirae Asset Savings FundDebtModerately Low6.6%2star382
Reliance Low Duration FundDebtModerately Low7.0%2star11,347
Tata Treasury Advantage FundDebtModerately Low7.0%2star2,872
LIC MF Savings FundDebtModerately Low7.1%2star1,613
Invesco India Treasury Advantage FundDebtModerately Low6.6%2star1,112
JM Low Duration FundDebtModerately Low6.4%2star435
View All Top 10 Low Duration Mutual Funds

Let's have a closer look

Now let us jump and check about these top 10 mutual fund schemes.

Kotak Low Duration Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Low Duration segment and provided 8.55% annualized returns in the last 3 years. In the last 1 year, it gave 7.41% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 7.41% returns in the last 1 year. Groww rated this fund as 5 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Deepak Agrawal

Launch Date31 Dec 2012
Min Investment Amt5,000
Groww Rating5star
AUM4,592Cr
1Y Returns7.4%

ICICI Prudential Savings Plan - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Low Duration segment and provided 7.85% annualized returns in the last 3 years. In the last 1 year, it gave 7.03% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 7.03% returns in the last 1 year. Groww rated this fund as 4 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Rahul Goswami, Rohan Maru

Launch Date31 Dec 2012
Min Investment Amt500
Groww Rating4star
AUM15,817Cr
1Y Returns7.0%

Aditya Birla Sun Life Low Duration - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Low Duration segment and provided 8.06% annualized returns in the last 3 years. In the last 1 year, it gave 7.51% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 7.51% returns in the last 1 year. Groww rated this fund as 4 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Kaustubh Gupta, Mohit Sharma

Launch Date31 Dec 2012
Min Investment Amt500
Groww Rating4star
AUM7,788Cr
1Y Returns7.5%

Principal Low Duration Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Low Duration segment and provided 7.84% annualized returns in the last 3 years. In the last 1 year, it gave 6.28% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 6.28% returns in the last 1 year. Groww rated this fund as 4 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Pankaj Jain

Launch Date31 Dec 2012
Min Investment Amt5,000
Groww Rating4star
AUM735Cr
1Y Returns6.3%

SBI Magnum Low Duration Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Low Duration segment and provided 7.48% annualized returns in the last 3 years. In the last 1 year, it gave 7.16% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 7.16% returns in the last 1 year. Groww rated this fund as 3 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Rajiv Radhakrishnan

Launch Date31 Dec 2012
Min Investment Amt5,000
Groww Rating3star
AUM6,615Cr
1Y Returns7.2%

L&T Low Duration Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Low Duration segment and provided 8.4% annualized returns in the last 3 years. In the last 1 year, it gave 6.18% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 6.18% returns in the last 1 year. Groww rated this fund as 3 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Shriram Ramanathan, Vikas Garg

Launch Date31 Dec 2012
Min Investment Amt10,000
Groww Rating3star
AUM1,309Cr
1Y Returns6.2%

UTI Treasury Advantage Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Low Duration segment and provided 7.79% annualized returns in the last 3 years. In the last 1 year, it gave 6.85% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 6.85% returns in the last 1 year. Groww rated this fund as 3 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Sudhir Agrawal

Launch Date31 Dec 2012
Min Investment Amt10,000
Groww Rating3star
AUM8,024Cr
1Y Returns6.8%

Sundaram Low Duration Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Low Duration segment and provided 7.73% annualized returns in the last 3 years. In the last 1 year, it gave 7.1% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 7.1% returns in the last 1 year. Groww rated this fund as 3 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Dwijendra Srivastava, Siddharth Chaudhary

Launch Date1 Jan 2013
Min Investment Amt1,000
Groww Rating3star
AUM1,226Cr
1Y Returns7.1%

IDFC Low Duration Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Low Duration segment and provided 7.73% annualized returns in the last 3 years. In the last 1 year, it gave 6.83% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 6.83% returns in the last 1 year. Groww rated this fund as 3 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Anurag Mittal

Launch Date31 Dec 2012
Min Investment Amt100
Groww Rating3star
AUM3,186Cr
1Y Returns6.8%

Mirae Asset Savings Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Low Duration segment and provided 7.07% annualized returns in the last 3 years. In the last 1 year, it gave 6.56% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 6.56% returns in the last 1 year. Groww rated this fund as 2 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Mahendra Jajoo

Launch Date31 Dec 2012
Min Investment Amt5,000
Groww Rating2star
AUM382Cr
1Y Returns6.6%

Reliance Low Duration Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Low Duration segment and provided 7.7% annualized returns in the last 3 years. In the last 1 year, it gave 6.95% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 6.95% returns in the last 1 year. Groww rated this fund as 2 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Amit Tripathi, Anju Chajjer

Launch Date31 Dec 2012
Min Investment Amt500
Groww Rating2star
AUM11,347Cr
1Y Returns7.0%

Tata Treasury Advantage Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Low Duration segment and provided 7.68% annualized returns in the last 3 years. In the last 1 year, it gave 7.02% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 7.02% returns in the last 1 year. Groww rated this fund as 2 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Dheeraj Singh

Launch Date31 Dec 2012
Min Investment Amt5,000
Groww Rating2star
AUM2,872Cr
1Y Returns7.0%

LIC MF Savings Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Low Duration segment and provided 7.95% annualized returns in the last 3 years. In the last 1 year, it gave 7.13% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 7.13% returns in the last 1 year. Groww rated this fund as 2 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Rahul Singh

Launch Date1 Jan 2013
Min Investment Amt5,000
Groww Rating2star
AUM1,613Cr
1Y Returns7.1%

Invesco India Treasury Advantage Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Low Duration segment and provided 7.56% annualized returns in the last 3 years. In the last 1 year, it gave 6.61% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 6.61% returns in the last 1 year. Groww rated this fund as 2 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Krishna Venkat Cheemalpati, Nitish Sikand

Launch Date31 Dec 2012
Min Investment Amt5,000
Groww Rating2star
AUM1,112Cr
1Y Returns6.6%

JM Low Duration Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Low Duration segment and provided 7.63% annualized returns in the last 3 years. In the last 1 year, it gave 6.4% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 6.4% returns in the last 1 year. Groww rated this fund as 2 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Vikas Agarwal

Launch Date1 Jan 2013
Min Investment Amt5,000
Groww Rating2star
AUM435Cr
1Y Returns6.4%

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What are Low Duration Debt Mutual Funds?

Debt funds are mutual funds investing in such debt instruments. They are of different kinds depending on the kind of debt instruments they invest in. Higher the credit rating of the debtor, lesser the chance of default and hence lesser the risk is – however, returns for such instruments can be lower. Lower the duration of the debt, lesser the probability of interest rate fluctuation and hence lesser the uncertainty of returns.

Who issues Low Duration Debt mutual funds?

Asset management companies (or AMCs or fund houses) create mutual funds. All AMCs will have to be approved by the government body, Securities and Exchange Board of India (SEBI). All mutual funds have to be whetted by SEBI before it is open for the public to invest.

How to invest in low duration debt mutual funds on Groww?

One of the best ways to hedge against the small-cap volatility is to adopt a phased approach, also known as Systematic Investment Plan (SIP) approach. We are sure that you must be aware of SIP and its benefits. Buying in small quantity but buying regularly provides you with faster growth. On Groww.in, all transactions to and from AMC is done via BSE. When you decide to invest in a large cap mutual fund of your choice, you choose that mutual fund on the website and click ‘invest’. Following that, you are redirected to the BSE page where you make the payment. BSE then directs your money to the AMC managing your mutual fund. To be assured at your end, you can visit the individual AMC website after the payment. You would be able to see all your purchased units against your folio number.

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Mutual fund investments are subject to market risks. Please read the scheme information and other related documents carefully before investing.
Past performance is not indicative of future returns. Please consider your specific investment requirements, risk tolerance, investment goal, time frame, risk and reward balance and the cost associated with the investment before choosing a fund, or designing a portfolio that suits your needs.
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