Best Low Risk Mutual Funds

Mutual Funds are a type of investment that creates a pool of money from multiple investors and invest in stocks like government bonds, debentures, equity, money market instruments, etc. Depending on the portfolio of each fund, and its aggregating performance, it can be classified as high risk or low-risk mutual fund.

The best low risk Mutual Funds come with higher chances of assured return, as they invest in government bonds of infrastructure, energy, real estate, etc. They can either match or stay ahead of inflation thanks to their risk-free investment portfolio.

The returns earned from the best low risk funds are often moderate, but steady. However, in the long run, low risk Mutual Funds are more likely to offer superior returns than any other type of investment option. Currently, it offers the highest return at around 15% and has maintained an average of just over 16% returns throughout the last 7 years.

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Top 10 Low Risk Mutual Funds

Fund NameCategoryRisk1Y ReturnsRatingFund Size(in Cr)
IDBI Liquid FundDebtLow5.2%5star1,820
DSP Overnight FundDebtLow4.0%5star2,082
Franklin India Liquid FundDebtLow5.1%5star2,118
Quant Liquid FundDebtLow5.8%5star166
ICICI Prudential Liquid FundDebtLow5.0%4star54,052
PGIM India Insta Cash FundDebtLow5.0%4star815
Nippon India Liquid FundDebtLow5.0%4star26,900
LIC MF Liquid FundDebtLow5.0%4star10,140
SBI Magnum Ultra Short Duration FundDebtLow6.8%4star12,635
Aditya Birla Sun Life Money Manager FundDebtLow7.3%4star9,969
View All Top 10 Low Risk Mutual Funds

Features of Low Risk Mutual Fund

Low risk Mutual Funds are an ideal financial vessel to preserve capital and increase income through timely liquid investments. It can be used as an alternative source of income. Prospective investors can also invest in these types of funds to gain confidence while investing.

These mutual funds invest in different securities, based on the previous performance and credit ratings. Usually, the funds are invested in high credit quality instruments to generate assured returns. It also ensures that the investment stays in less volatile sector compared to equity funds.

The investment horizon usually extends between 3 months and 3 years for short-term schemes, and 3 to 5 years for medium-term options. Longer the tenor, higher is the chances of assured returns.

Taxability

Mutual Funds are considered as a financial tool to generate a capital gain, which is the primary reason why it falls under the Income Tax Act of India. The tax levied on the investments primarily depends on the holding period, or the duration for which you invest in that particular portfolio.

Usually, the best low risk Mutual Funds 2019 can be both short, and long-term capital investment, attracting taxes depending on the investment’s holding period. If the investment is for up to 36 months, the tax is calculated based on the income tax slab rate of that particular investor. If the investment period is longer than 36 months, a flat 20% tax after indexation will be applicable.

Indexation is a method which factors in the rise in inflation from the time of acquiring the investment to the sale of that particular unit. It inflates the purchase price of the debt fund to lower its loss in capital gain. However, they might fall under short-term capital gains tax (SCGT) according to the particular income tax act applicable to the investor.

Who Are These Funds Suited For?

The best low risk Mutual Funds 2019 optimise the return of an investor by diversifying the funds across different types of securities. It ensures decent and predictable range, making them a safer option for a conservative investor.

Low risk Mutual Funds are also suitable for individuals who prefer short and medium-term investment options.

  • Medium-term funds – Low risk Mutual Funds with medium length tenor are better and more suitable to ride volatile interest rates of a fluctuating market. These investments usually range from 3 years to 5 years, offering higher returns than other secure investments like bank FDs for example although ensuring close enough security.
  • Short-term funds – Individuals looking for short-term investments are likely to prefer this type of low-risk Mutual Funds over others. These offer higher returns, usually ranging from 7% to 9%, along with a provision to liquidate the investment for catering to emergency financial requirement.

Major Advantages

The primary advantage of the best low risk Mutual Funds is that it offers a secure and alternative mode of income for an individual. It also poses a significantly lower market risk, as the funds are invested in safer Government bonds.

  • It offers provision to liquidate the funds to meet any emergency financial requirement.
  • Moderate, but stable return over the tenor.

Let's have a closer look

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

IDBI Liquid Fund Direct Growth

Fund Performance: This fund has given 6.56% annualized returns in the last three years. In the last year, its returns were 5.17%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 5.17% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹5,000
AUM1,820Cr
1Y Returns5.2%

DSP Overnight Fund Direct Growth

Fund Performance: In the last year, its returns were 4.05%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 4.05% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹500
AUM2,082Cr
1Y Returns4.0%

Franklin India Liquid Fund Direct Growth

Fund Performance: This fund has given 6.58% annualized returns in the last three years. In the last year, its returns were 5.13%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 5.13% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹10,000. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹10,000
AUM2,118Cr
1Y Returns5.1%

Quant Liquid Direct Plan Growth

Fund Performance: This fund has given 6.84% annualized returns in the last three years. In the last year, its returns were 5.75%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 5.75% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt₹5,000
AUM166Cr
1Y Returns5.8%

ICICI Prudential Liquid Fund Direct Plan Growth

Fund Performance: This fund has given 6.45% annualized returns in the last three years. In the last year, its returns were 4.98%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 4.98% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹100. Minimum SIP investment amount required for this scheme is ₹100.

Min Investment Amt₹100
AUM54,052Cr
1Y Returns5.0%

PGIM India Insta Cash Fund Direct Plan Growth

Fund Performance: This fund has given 6.5% annualized returns in the last three years. In the last year, its returns were 5%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 5% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹100. Minimum SIP investment amount required for this scheme is ₹100.

Min Investment Amt₹100
AUM815Cr
1Y Returns5.0%

Nippon India Liquid Fund Direct Growth

Fund Performance: This fund has given 6.51% annualized returns in the last three years. In the last year, its returns were 4.98%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 4.98% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹100. Minimum SIP investment amount required for this scheme is ₹100.

Min Investment Amt₹100
AUM26,900Cr
1Y Returns5.0%

LIC MF Liquid Fund Direct Growth

Fund Performance: This fund has given 6.46% annualized returns in the last three years. In the last year, its returns were 5.02%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 5.02% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt₹5,000
AUM10,140Cr
1Y Returns5.0%

SBI Magnum Ultra Short Duration Fund Direct Growth

Fund Performance: This fund has given 7.58% annualized returns in the last three years. In the last year, its returns were 6.81%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 6.81% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹5,000
AUM12,635Cr
1Y Returns6.8%

Aditya Birla Sun Life Money Manager Fund Direct Growth

Fund Performance: This fund has given 7.86% annualized returns in the last three years. In the last year, its returns were 7.3%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 7.3% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹1,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt₹1,000
AUM9,969Cr
1Y Returns7.3%

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