Top 10 Short Duration Mutual Funds

Fund NameCategoryRisk1Y ReturnsRatingFund Size(in Cr)
Reliance Gilt Securities FundDebtModerate10.5%5star914
Edelweiss Government Securities FundDebtModerate7.8%5star125
Indiabulls Short Term FundDebtLow9.0%5star175
Baroda Pioneed Credit Risk FundDebtModerate6.9%5star946
DSP BlackRock Savings Fund DebtModerately Low7.8%5star361
SBI Magnum Constant Maturity FundDebtModerately Low10.4%5star356
Essel Liquid FundDebtLow7.6%5star303
HDFC Regular Savings FundDebtModerate6.3%5star5,433
Reliance Prime Debt FundDebtModerate7.9%5star2,650
BNP Paribas Government Securities FundDebtModerately Low4.7%5star12
View All Top 10 Short Duration Mutual Funds

Best Short Duration Mutual Funds

Short Duration Mutual Funds are funds that invest at least 65% of the total corpus in debt securities such as Government bonds, gold funds, fund of funds, and international funds, etc. However, Short Duration mutual funds come with trade off. Short Duration generally translates to low returns. Short Duration Mutual Funds do not have a Fixed Investment Horizon.

Short Duration Mutual Funds invest in money market instruments like bonds, treasury bills, etc. Unlike equity mutual funds, they are associated with a lot less risk. Their returns are also much more stable when compared to equity funds. When investing for a short period of time, like less than 2 years, debt funds make very good investments.

One can use Short Duration Mutual Funds as an emergency fund. These are meant for parking your money and keep it handy so that you can redeem it as and when required. Returns are taxed as per your income tax slab if sold before three years.

Purpose: Invest in these funds if you want to park your money as an emergency fund, and redeem as per need.

Let's have a closer look

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

Reliance Gilt Securities Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Gilt segment and provided 10.92% annualized returns in the last 3 years. In the last 1 year, it gave 10.51% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 10.51% 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: Prashant R.Pimple

Launch Date22 Jul 2013
Min Investment Amt5,000
Groww Rating5star
AUM914Cr
1Y Returns10.5%

Edelweiss Government Securities Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Gilt segment and provided 7.92% annualized returns in the last 3 years. In the last 1 year, it gave 7.83% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 7.83% 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: Dhawal Dalal, Gautam Kaul

Launch Date12 Feb 2014
Min Investment Amt5,000
Groww Rating5star
AUM125Cr
1Y Returns7.8%

Indiabulls Short Term Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Short Duration segment and provided 8.46% annualized returns in the last 3 years. In the last 1 year, it gave 8.99% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 8.99% 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: Malay Shah

Launch Date12 Sep 2013
Min Investment Amt500
Groww Rating5star
AUM175Cr
1Y Returns9.0%

Baroda Pioneed Credit Risk Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Credit Risk segment and provided 9.44% annualized returns in the last 3 years. In the last 1 year, it gave 6.87% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 6.87% 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: Alok Kumar Sahoo, Karn Kumar

Launch Date22 Jan 2015
Min Investment Amt5,000
Groww Rating5star
AUM946Cr
1Y Returns6.9%

DSP Savings Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Money Market segment and provided 6.93% annualized returns in the last 3 years. In the last 1 year, it gave 7.82% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 7.82% 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: Kedar Karnik, Rahul Vekaria

Launch Date31 Dec 2012
Min Investment Amt1,000
Groww Rating5star
AUM361Cr
1Y Returns7.8%

SBI Magnum Constant Maturity Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Gilt segment and provided 9.58% annualized returns in the last 3 years. In the last 1 year, it gave 10.39% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 10.39% 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: Dinesh Ahuja

Launch Date1 Jan 2013
Min Investment Amt5,000
Groww Rating5star
AUM356Cr
1Y Returns10.4%

Essel Liquid Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Liquid segment and provided 7.39% annualized returns in the last 3 years. In the last 1 year, it gave 7.63% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 7.63% 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: Killol Pandya, Archit Shah

Launch Date31 Dec 2012
Min Investment Amt1,000
Groww Rating5star
AUM303Cr
1Y Returns7.6%

HDFC Short Term Plan - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Short Duration segment and provided 8.88% annualized returns in the last 3 years. In the last 1 year, it gave 6.34% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 6.34% 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: Anil Bamboli

Launch Date31 Dec 2012
Min Investment Amt5,000
Groww Rating5star
AUM5,433Cr
1Y Returns6.3%

Reliance Prime Debt Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Corporate Bond segment and provided 8.14% annualized returns in the last 3 years. In the last 1 year, it gave 7.87% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 7.87% 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: Amit Tripathi, Anju Chajjer

Launch Date31 Dec 2012
Min Investment Amt1,000
Groww Rating5star
AUM2,650Cr
1Y Returns7.9%

BNP Paribas Government Securities Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Gilt segment and provided 8.59% annualized returns in the last 3 years. In the last 1 year, it gave 4.73% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 4.73% 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: Mayank Prakash, Vikram Pamnani

Launch Date1 May 2013
Min Investment Amt2,00,000
Groww Rating5star
AUM12Cr
1Y Returns4.7%

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When should I invest in short duration mutual funds?

This is contextual. If you do not wish to invest directly in stocks (because you have better things to do or just don’t feel like it), you can choose equity mutual funds (defined below). If you would like to lower your tax outgo compared to a fixed or recurring deposit and if possible with better returns, you can choose debt mutual funds (defined below). The clearer you are about your need, the faster and confident you will be in taking decisions regarding mutual funds – well, this applies to anything in life!

Who issues very short duration 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.

When is the right time to start investing in Mutual Funds?

The answer to this question depends on the rating and performance of mutual fund you are investing into and the amount of risk you are willing to take. Depending on the above factors let's go ahead: 1) the performance of mutual fund you are investing into makes a lot of difference since a lot of research needs to be done before investing. i) how that particular fund is diversifying its assets since many of funds are sector funds and some others put a lot of money into one sector like banking/finance. ii) But if that particular sector doesn't perform well in the long term you would end up losing your money iii) Some sectors like FMCG (HUL, Dabur) or automobile like Maruti Suzuki(because of innovations it brings in) almost make profits throughout the year and hence it's very advantageous to invest in them for long-term in these sectors. Investment time: more than 3 years. 2) The amount of risk you are willing to take i) It is important since if you want to invest in low-risk funds, debt funds will be the best option(moderate returns, low risk) investment time period: less than 1 or 1.5 years ii) But if you want high returns, more diversification equity mutual funds will be the best since the higher the risk, more will be the returns. Investment time: depending on the performance of fund (on an average 4 or greater than 4 years) iii) For a balanced portfolio, you may invest into balanced mutual funds where there is a combination of both equity and debt mutual funds which will again help you to invest for a good duration like less than 2-3 years.

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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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