Best Money Market Funds – Money Market Funds

The table below shows a list Of the Best Money Market Mutual funds based on AUM, NAV, and minimum SIP.

Name	AUM (Cr)	NAV (Rs)	Minimum SIP (Rs)
ICICI Pru Money Market Fund	29,118.99	361.35	100
HDFC Money Market Fund	28,725.37	5,483.79	100
SBI Savings Fund	28,686.06	41.85	1500
Aditya Birla SL Money Manager Fund	27,664.75	352.68	1000
Tata Money Market Fund	27,628.33	4,521.38	500
Kotak Money Market Fund	24,036.35	4,265.31	100
Nippon India Money Market Fund	17,581.83	3,954.16	100
Axis Money Market Fund	15,583.07	1,358.03	1000
UTI Money Market Fund	15,169.71	2,935.97	500
Bandhan Money Manager Fund	7,518.29	41.06	100

Introduction to Money Market Mutual Funds

ICICI Pru Money Market Fund

ICICI Prudential Money Market Direct-Growth is a Money Market mutual fund scheme from ICICI Prudential Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

ICICI Pru Money Market Fund as a Money Market Fund, manages assets valued at ₹29118.99 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 5.99%. This fund has no exit load and an expense ratio of 0.21%. According to SEBI, it falls under the Moderately-risk category. The fund’s asset allocation comprises: No Equity, Debt – 96.73%, and Other – 3.27%.

HDFC Money Market Fund

HDFC Money Market Fund Direct Plan-Growth is a Money Market mutual fund scheme from HDFC Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

HDFC Money Market Fund as a Money Market Fund, manages assets valued at ₹28725.37 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 6.1%. This fund has no exit load and an expense ratio of 0.23%. According to SEBI, it falls under the Moderately-risk category. The fund’s asset allocation comprises: No Equity, Debt – 100.17%, and Other – (-)0.17%.

SBI Savings Fund

SBI Savings Fund Direct-Growth is a Money Market mutual fund scheme from SBI Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

SBI Savings Fund as a Money Market Fund, manages assets valued at ₹28686.06 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 6.01%. This fund has no exit load and an expense ratio of 0.25%. According to SEBI, it falls under the Moderately-risk category. The fund’s asset allocation comprises: No Equity, Debt – 101.85%, and Other – (-)1.85%.

Aditya Birla SL Money Manager Fund

Aditya Birla Sun Life Money Manager Fund Direct-Growth is a Money Market mutual fund scheme from Aditya Birla Sun Life Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

Aditya Birla SL Money Manager Fund as a Money Market Fund, manages assets valued at ₹27664.75 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 6.15%. This fund has no exit load and an expense ratio of 0.22%. According to SEBI, it falls under the Moderately-risk category. The fund’s asset allocation comprises: No Equity, Debt – 94.92%, and Other – 5.08%.

Tata Money Market Fund

Tata Money Market Fund Direct-Growth is a Money Market mutual fund scheme from Tata Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013. 

Tata Money Market Fund as a Money Market Fund, manages assets valued at ₹27628.33 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 6.19%. This fund has no exit load and an expense ratio of 0.15%. According to SEBI, it falls under the Moderately-risk category. The fund’s asset allocation comprises: No Equity, Debt – 99.13%, and Other – 0.87%.

Kotak Money Market Fund

Kotak Money Market Fund Direct-Growth is a Money Market mutual fund scheme from Kotak Mahindra Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

Kotak Money Market Fund as a Money Market Fund, manages assets valued at ₹24036.35 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 5.89%. This fund has no exit load and an expense ratio of 0.23%. According to SEBI, it falls under the Moderately-risk category. The fund’s asset allocation comprises: No Equity, Debt – 97.33%, and Other – 2.67%.

Nippon India Money Market Fund

Nippon India Money Market Fund Direct-Growth is a Money Market mutual fund scheme from Nippon India Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

Nippon India Money Market Fund as a Money Market Fund, manages assets valued at ₹17581.83 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 6.03%. This fund has no exit load and an expense ratio of 0.25%. According to SEBI, it falls under the Moderately-risk category. The fund’s asset allocation comprises: No Equity, Debt – 100.78%, and Other – (-)0.78%.

Axis Money Market Fund

Axis Money Market Fund Direct-Growth is a Money Market mutual fund scheme from Axis Mutual Fund. This fund has been in existence for 5 years and 1 month, having been launched on 26/07/2019. 

Axis Money Market Fund as a Money Market Fund, manages assets valued at ₹15583.07 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 6.08%. This fund has no exit load and an expense ratio of 0.16%. According to SEBI, it falls under the Moderately-risk category. The fund’s asset allocation comprises: No Equity, Debt – 100.1%, and Other – (-)0.1%.

UTI Money Market Fund

UTI Money Market Fund Direct-Growth is a Money Market mutual fund scheme from UTI Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013. 

UTI Money Market Fund as a Money Market Fund, manages assets valued at ₹15169.71 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 5.98%. This fund has no exit load and an expense ratio of 0.19%. According to SEBI, it falls under the Moderately-risk category. The fund’s asset allocation comprises: No Equity, Debt – 95.14%, and Other – 4.86%.

Bandhan Money Manager Fund

Bandhan Money Manager Fund Direct-Growth is a Money Market mutual fund scheme from Bandhan Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

Bandhan Money Manager Fund as a Money Market Fund, manages assets valued at ₹7518.29 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 5.82%. This fund has no exit load and an expense ratio of 0.1%. According to SEBI, it falls under the Moderately-risk category. The fund’s asset allocation comprises: No Equity, Debt – 90.26%, and Other – 9.74%.

What Are Money Market Funds?

Money Market Funds (MMFs) are low-risk investment vehicles that invest in short-term, high-quality debt instruments like Treasury bills, certificates of deposit, and commercial paper. They aim to provide liquidity, safety, and a stable net asset value (NAV).

MMFs typically offer modest returns compared to other investments due to their low-risk nature. While they aren’t insured, they are considered safer than stocks and bonds, making them attractive for investors seeking preservation of capital.

There are various types of MMFs, including government, prime, and tax-exempt funds. They are easily accessible to individual and institutional investors, offering liquidity with low initial investment thresholds, making them suitable for short-term cash management.

Features of the Best Money Market Fund India

The main features of the best Money Market Fund in India include high liquidity, low risk, competitive returns, and strong credit quality.

• High Liquidity: Provides easy access to funds with minimal notice, ensuring that investors can withdraw or transfer money quickly without penalties, which is crucial for short-term financial needs.
• Low Risk: Invests in high-quality, short-term debt instruments such as government securities and commercial paper, minimizing exposure to credit and interest rate risks while preserving capital.
• Competitive Returns: Offers attractive yields compared to savings accounts or fixed deposits, leveraging short-term investment strategies to provide relatively higher returns while maintaining safety.
• Strong Credit Quality: Focuses on securities issued by financially stable entities, including government and blue-chip companies, ensuring that investments are secure and reducing the risk of default.

Best Money Market Funds To Invest In Based on Expense Ratio

The table below shows the Best-performing Money Market Mutual Fund Based on the highest to lowest expense ratio.

Name	Expense Ratio (%)	Minimum SIP (Rs)
LIC MF Money Market Fund	0.59	1000
Union Money Market Fund	0.27	500
Sundaram Money Market Fund	0.26	1000
SBI Savings Fund	0.25	1500
Nippon India Money Market Fund	0.25	100
DSP Savings Fund	0.25	100
HDFC Money Market Fund	0.23	100
Kotak Money Market Fund	0.23	100
Baroda BNP Paribas Money Market Fund	0.23	500
Aditya Birla SL Money Manager Fund	0.22	1000

List Of Money Market Funds Based on 3Y CAGR

The table below shows the Best Money Market Mutual Fund Based on the Highest 3Y CAGR.

Name	CAGR 3Y (Cr)	Minimum SIP (Rs)
Tata Money Market Fund	6.5	500
Nippon India Money Market Fund	6.43	100
Aditya Birla SL Money Manager Fund	6.42	1000
Axis Money Market Fund	6.39	1000
UTI Money Market Fund	6.38	500
HDFC Money Market Fund	6.35	100
Kotak Money Market Fund	6.35	100
ICICI Pru Money Market Fund	6.32	100
SBI Savings Fund	6.31	1500
PGIM India Money Market Fund	6.29	1000

Money Market Mutual Funds Based on Exit Load

The table below shows the Best Performing Money Market Mutual Fund In India Based on Exit Load, i.e., the fee that the AMC charges investors when they exit or redeem their fund units.

Name	AMC	Exit Load (%)
ICICI Pru Money Market Fund	ICICI Prudential Asset Management Company Limited	0
HDFC Money Market Fund	HDFC Asset Management Company Limited	0
SBI Savings Fund	SBI Funds Management Limited	0
Aditya Birla SL Money Manager Fund	Aditya Birla Sun Life AMC Limited	0
Tata Money Market Fund	Tata Asset Management Private Limited	0
Kotak Money Market Fund	Kotak Mahindra Asset Management Company Limited	0
Nippon India Money Market Fund	Nippon Life India Asset Management Limited	0
Axis Money Market Fund	Axis Asset Management Company Ltd.	0
UTI Money Market Fund	UTI Asset Management Company Private Limited	0
Bandhan Money Manager Fund	Bandhan AMC Limited	0

Money Market Mutual Funds Returns

The table below shows Money Market Mutual Fund Returns Based on 1-year returns.

Name	Absolute Returns – 1Y (%)	Minimum SIP (Rs)
Tata Money Market Fund	7.92	500
Aditya Birla SL Money Manager Fund	7.82	1000
Axis Money Market Fund	7.8	1000
Mirae Asset Money Market Fund	7.8	1000
Nippon India Money Market Fund	7.78	100
Kotak Money Market Fund	7.74	100
UTI Money Market Fund	7.73	500
ICICI Pru Money Market Fund	7.71	100
HDFC Money Market Fund	7.71	100
SBI Savings Fund	7.7	1500

Historical Performance of Money Market Funds

The table below shows the Historical Performance Of Money Market Mutual Funds based on 5-year returns.

Name	CAGR 5Y (Cr)	Minimum SIP (Rs)
Tata Money Market Fund	6.19	500
Aditya Birla SL Money Manager Fund	6.15	1000
HDFC Money Market Fund	6.1	100
Axis Money Market Fund	6.08	1000
Nippon India Money Market Fund	6.03	100
SBI Savings Fund	6.01	1500
ICICI Pru Money Market Fund	5.99	100
UTI Money Market Fund	5.98	500
Edelweiss Money Market Fund	5.92	100
Franklin India Money Market Fund	5.9	500

Factors to Consider When Investing in Money Market Mutual Funds

The main factors to consider when investing in Money Market Mutual Funds include the fund’s yield, credit quality, fees, and liquidity.

• Yield: Evaluate the fund’s current yield and historical performance to gauge potential returns. Compare yields across different funds to find one that offers competitive returns relative to its risk profile.

• Credit Quality: Check the credit ratings of the securities within the fund. Higher credit quality indicates a lower risk of default, ensuring that the fund invests in reliable and stable financial instruments.

• Fees: Review the fund’s expense ratio and any additional fees. Lower fees can enhance net returns, so choose a fund with minimal costs while still meeting your investment criteria.

• Liquidity: Ensure the fund offers easy access to your money with minimal redemption restrictions or penalties. Good liquidity allows you to withdraw funds quickly when needed without incurring extra costs.

How to Invest in Top Money Market Funds?

Start by researching top-performing money market funds (MMFs) based on yield, fees, and risk profile. Compare different types like government, prime, or tax-exempt funds to find the one that best suits your financial goals and risk tolerance.

To invest, open an account with Alice Blue that offers MMFs. Many online platforms provide access to top-rated funds with low fees and transparent performance metrics, ensuring a streamlined investment process.

Once invested, regularly monitor the fund’s performance and make adjustments as needed. Many platforms offer automatic reinvestment of dividends, allowing your investment to grow over time with minimal effort, while keeping your portfolio balanced and liquid.

Impact of Market Trends on Top Money Market Mutual Funds

Market trends like rising interest rates can increase yields on top money market mutual funds (MMFs), enhancing returns. Conversely, when rates decline, yields decrease, impacting the fund’s overall profitability and attractiveness to investors seeking higher returns.

During periods of economic uncertainty or market volatility, investors often flock to MMFs for safety, boosting fund inflows. However, prolonged instability can lead to lower returns as funds prioritize liquidity and security over higher-yielding, riskier investments.

How Money Market Funds Perform in Volatile Markets?  

Money Market Funds (MMFs) tend to perform well in volatile markets due to their focus on short-term, high-quality debt instruments. Their stable net asset value (NAV) and liquidity offer investors a safer haven compared to stocks and bonds.

Although MMFs provide lower returns during market volatility, their conservative investment strategy helps preserve capital. Investors typically accept modest yields in exchange for the reduced risk, making MMFs an attractive option during uncertain economic periods.

Advantages of Investing in Money Market Mutual Funds

The main advantages of investing in Money Market Mutual Funds include safety, liquidity, stability, and low minimum investment requirements.

• Safety: Money Market Mutual Funds invest in high-quality, short-term debt instruments, which reduces risk and helps preserve capital. This safety feature makes them a low-risk investment choice compared to stocks and bonds.

• Liquidity: These funds offer easy access to your money, allowing for quick withdrawals or transfers without significant delays or penalties. This liquidity is ideal for managing short-term financial needs or emergencies.

• Stability: With a focus on maintaining a stable net asset value (NAV), Money Market Mutual Funds provide predictable returns and minimal fluctuations. This stability makes them a reliable option for conservative investors.

• Low Minimum Investment Requirements: Many funds have low minimum investment thresholds, making them accessible for both new and small-scale investors. This affordability enables more people to invest without needing substantial capital.

Risks of Investing in Money Market Mutual Funds

The main risks of investing in Money Market Mutual Funds include interest rate risk, credit risk, inflation risk, and fund-specific risks.

• Interest Rate Risk: Rising interest rates can reduce the value of existing securities in the fund, potentially lowering returns. As new, higher-yielding investments become available, the fund’s older, lower-yielding holdings may become less attractive.

• Credit Risk: Though funds invest in high-quality instruments, there’s still a risk of default if issuers face financial trouble. This credit risk can impact the fund’s performance if it holds securities from less creditworthy entities.

• Inflation Risk: Low returns from Money Market Funds may not keep pace with inflation, eroding purchasing power over time. In a high-inflation environment, the real returns from these funds might be insufficient to offset rising costs.

• Fund-Specific Risks: Each fund may have unique risks based on its investment strategy and holdings. These can include management changes, strategy shifts, or concentration in specific sectors, which might affect performance and stability.

Contribution of Money Market Funds to Portfolio Diversification  

Money Market Funds (MMFs) contribute to portfolio diversification by adding a low-risk, highly liquid component. This helps balance riskier assets like stocks or bonds, providing stability and preserving capital during periods of market volatility or downturns.

By including MMFs, investors enhance their portfolio’s liquidity, allowing for quick access to cash when needed. This flexibility ensures that while other assets may fluctuate in value, MMFs provide a stable source of funds for short-term needs or opportunities.

Who Should Invest in Money Market Funds?

Money Market Funds (MMFs) are ideal for conservative investors seeking capital preservation and low risk. Retirees or those nearing retirement often invest in MMFs to safeguard their savings while maintaining liquidity for short-term financial needs.

Individuals with short-term financial goals, like saving for a large purchase or emergency fund, benefit from MMFs. These funds offer easy access to cash with minimal risk, making them suitable for those prioritizing liquidity over high returns.

Impact of Fund Manager Expertise on Money Market Mutual Funds Performance  

A skilled fund manager plays a crucial role in navigating interest rate fluctuations and market conditions, ensuring the Money Market Mutual Fund (MMF) remains stable. Their expertise in selecting high-quality, short-term debt instruments directly impacts the fund’s risk and returns.

Experienced managers can optimize a fund’s yield by strategically balancing liquidity, credit quality, and maturity. Their ability to make informed decisions on investments like Treasury bills or commercial paper enhances overall performance, even in low-risk environments like MMFs.

How Much Money Should I Invest In Money Market Funds?

The amount to invest in Money Market Funds (MMFs) depends on your financial goals. If you’re seeking short-term liquidity or an emergency fund, consider allocating enough to cover 3-6 months of living expenses for quick access to cash.

For conservative investors, a larger portion may be allocated to MMFs to ensure capital preservation. However, those with higher risk tolerance may invest less, using MMFs primarily as a diversification tool within a broader, more aggressive investment strategy.

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Disclaimer: The above article is written for educational purposes, and the companies’ data mentioned in the article may change over time.