Best Low Risk Mutual Funds

Low Risk 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, low risk mutual funds come with trade off. Low risk generally translates to low returns. Low Risk Mutual Funds do not have a Fixed Investment Horizon.

Low Risk 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.

Top 10 Low Risk Mutual Funds

Fund NameCategoryRisk1Y ReturnsRatingFund Size(in Cr)
ICICI Prudential Liquid FundDebtLow7.3%5star51,345
Indiabulls Liquid FundDebtLow7.3%5star1,589
Tata Liquid FundDebtLow-98.9%4star20,893
Indiabulls Short Term FundDebtLow7.2%4star181
Essel Liquid FundDebtLow7.4%4star845
HSBC Cash FundDebtLow7.4%4star5,132
Tata Liquid FundDebtLow7.3%4star20,893
JM Liquid FundDebtLow7.4%4star1,979
Aditya Birla Sun Life Money Manager FundDebtLow7.7%4star8,270
Axis Liquid FundDebtLow7.4%4star23,435
View All Top 10 Low Risk Mutual Funds

Let's have a closer look

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

ICICI Prudential Liquid Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Liquid segment and provided 7.29% annualized returns in the last 3 years. In the last 1 year, it gave 7.31% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 7.31% 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: Rahul Goswami, Rohan Maru

Launch Date31 Dec 2012
Min Investment Amt100
Groww Rating5star
AUM51,345Cr
1Y Returns7.3%

Indiabulls Liquid Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Liquid segment and provided 7.42% annualized returns in the last 3 years. In the last 1 year, it gave 7.29% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 7.29% 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 Date31 Dec 2012
Min Investment Amt500
Groww Rating5star
AUM1,589Cr
1Y Returns7.3%

Tata Liquid Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Liquid segment and provided -76.88% annualized returns in the last 3 years. In the last 1 year, it gave -98.93% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided -98.93% 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: Amit Somani

Launch Date31 Dec 2012
Min Investment Amt5,000
Groww Rating4star
AUM20,893Cr
1Y Returns-98.9%

Indiabulls Short Term Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Short Duration segment and provided 8.24% 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 4 Star. This is one of the best Debt mutual fund in India.

Fund Manager: Malay Shah

Launch Date12 Sep 2013
Min Investment Amt500
Groww Rating4star
AUM181Cr
1Y Returns7.2%

Essel Liquid Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Liquid segment and provided 7.44% annualized returns in the last 3 years. In the last 1 year, it gave 7.38% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 7.38% 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: Killol Pandya, Archit Shah

Launch Date31 Dec 2012
Min Investment Amt1,000
Groww Rating4star
AUM845Cr
1Y Returns7.4%

HSBC Cash Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Liquid segment and provided 7.29% annualized returns in the last 3 years. In the last 1 year, it gave 7.37% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 7.37% 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: Kapil Punjabi

Launch Date31 Dec 2012
Min Investment Amt10,000
Groww Rating4star
AUM5,132Cr
1Y Returns7.4%

Tata Liquid Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Liquid segment and provided 7.31% annualized returns in the last 3 years. In the last 1 year, it gave 7.35% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 7.35% 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: Amit Somani

Launch Date31 Dec 2012
Min Investment Amt5,000
Groww Rating4star
AUM20,893Cr
1Y Returns7.3%

JM Liquid Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Liquid segment and provided 7.38% annualized returns in the last 3 years. In the last 1 year, it gave 7.36% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 7.36% 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: Shalini Tibrewala

Launch Date31 Dec 2012
Min Investment Amt5,000
Groww Rating4star
AUM1,979Cr
1Y Returns7.4%

Aditya Birla Sun Life Money Manager Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Money Market segment and provided -100% annualized returns in the last 3 years. In the last 1 year, it gave 7.72% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 7.72% 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 Date30 Dec 2012
Min Investment Amt1,000
Groww Rating4star
AUM8,270Cr
1Y Returns7.7%

Axis Liquid Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in Liquid segment and provided -100% annualized returns in the last 3 years. In the last 1 year, it gave 7.37% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 7.37% 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: Devang Shah, Aditya Pagaria

Launch Date31 Dec 2012
Min Investment Amt500
Groww Rating4star
AUM23,435Cr
1Y Returns7.4%

Why invest with Groww?

— Registered with SEBI, AMFI & BSE

— Paperless sign up on web & app

— Expert recommendations

— ZERO fees !

Sign Up

When should I invest in very low risk 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 low risk 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.

What does investing in very low risk mutual funds actually mean?

Suppose a mutual fund invests in ten stocks and total current market value of these stocks is 1.1 Crore. Out of this, the AMC deducts say, 0.1 Crore for operating the fund (this is known as the expense ratio). So the net value is 1 crore. Now the AMC will divide this 1 Crore into say, 10,000 parts. These parts are known as units. The cost of one unit is 1Cr/10,000 = Rs. 1000. This is known as the Net Asset Value (NAV) of the mutual fund. Suppose the AMC has set a minimum investment requirement of Rs. 500. Then if you pay Rs. 500, you will get 0.5 units of the fund. Remember that the cost of one unit is the cost when you made the purchase. Suppose after one year, the NAV has fallen to Rs. 700 per unit and you wish to exit the fund (also known as redemption), then you sell your 0.5 units back to the AMC and get 0.5 x Rs. 700 = Rs. 350 back. Yes, you invested Rs. 500 and got back Rs. 350 – a loss of 150 over a year. The point is, that you buy units at current NAV and sell units (fully or partially) at current NAV. This is what investing in mutual fund actually means.

How to invest in very low risk 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.

How long does it take to start investing in very low risk mutual funds if I do not have a KYC?

It is not possible for any investor to start investing in mutual funds without having completed the KYC process. Under the Prevention of Money Laundering Act (PMLA), Know Your Customer (KYC) norms have been mandated to track the legality of funds used in an investment. KYC is a one-time process which every first-time mutual fund investor needs to follow, to be able to invest in a mutual fund. KYC process on Groww can be completed in 2-3 days. KYC can be completed online with the help of E-KYC or electronic KYC. E-KYC Aadhar (based on OTP) : Investor can use online KYC facility using just the aadhar card number and PAN number, by visiting the website and following the easy process. After entering relevant details like aadhar and PAN number, investor will receive an OTP and KYC will be completed instantly. However, one can invest only up to ₹50,000 per fund house per year under this method.

Investing Articles

Explore all Mutual Funds on Groww

Explore Mutual Funds
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.
MOST POPULAR ON GROWW
MUTUAL FUNDS COMPANIES: ICICI PRUDENTIAL  | HDFC  | RELIANCE  | ADITYA BIRLA SUN LIFE  | SBI  | UTI  | FRANKLIN TEMPLETON  | KOTAK MAHINDRA  | IDFC  | DSP BLACKROCK  | AXIS  | TATA  | L&T  | SUNDARAM  | DHFL PRAMERICA  | INVESCO  | LIC  | JM FINANCIAL  | BARODA PIONEER  | CANARA ROBECO  | HSBC  | IDBI  | INDIABULLS  | MOTILAL OSWAL  | BNP PARIBAS  | MIRAE ASSET  | PRINCIPAL  | BOI AXA  | UNION KBC  | TAURUS  | EDELWEISS  | ESSEL  | MAHINDRA  | QUANTUM  | PPFAS  | IIFL  | ESCORTS  |