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Best Overnight Funds

The table below shows a list of the Best Overnight Mutual Funds Based on AUM, NAV, and minimum SIP.

NameAUM (Cr)NAV (Rs)Minimum SIP (Rs)
SBI Overnight Fund16,968.964,012.732,000
ICICI Pru Overnight fund-Direct Plan-Unclaimed IDCW Transitory Scheme11,001.211,172.87500
HDFC Overnight Fund9,577.903,659.49100
Nippon India Overnight Fund8,498.93132.46100
Axis Overnight Fund7,875.741,304.901,000
Aditya Birla SL Overnight Fund7,080.321,334.14500
Kotak Overnight Fund5,474.941,315.81100
UTI Overnight Fund3,771.293,376.36500
Tata Overnight Fund3,557.601,301.43150
HSBC Overnight Fund3,203.311,290.75500
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Introduction to Best Overnight Funds India

SBI Overnight Fund

SBI Overnight Fund Direct-Growth is an Overnight 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 Overnight Fund Direct-Growth as an overnight fund, manages assets valued at ₹16968.96 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 4.81%. This fund has no exit load and an expense ratio of 0.7%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: No Equity, Debt – 3.7%, and Other – 76.3%.

ICICI Pru Overnight fund-Direct Plan-Unclaimed IDCW Transitory Scheme

ICICI Prudential Overnight Fund Direct-Growth is an Overnight mutual fund scheme from ICICI Prudential Mutual Fund. This fund has been in existence for 5 years and 10 months, having been launched on 14/11/2018.

ICICI Prudential Overnight Fund Direct-Growth as an overnight fund, manages assets valued at ₹11001.21 crore. Over the past 1 year, it has achieved a Compound Annual Growth Rate (CAGR) of 6.78%. This fund has no exit load and no expense ratio. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: No Equity, Debt – 60.3%, and Other – 93.97%.

HDFC Overnight Fund

HDFC Overnight Fund Direct Plan-Growth is an Overnight 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 Overnight Fund Direct Plan-Growth as an overnight fund, manages assets valued at ₹9577.90 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 4.79%. This fund has no exit load and an expense ratio of 0.1%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: No Equity, Debt – 5.73%, and Other – 94.27%.

Nippon India Overnight Fund

Nippon India Overnight Fund Direct-Growth is an Overnight mutual fund scheme from Nippon India Mutual Fund. This fund has been in existence for 5 years and 9 months, having been launched on 17/12/2018.

Nippon India Overnight Fund Direct-Growth as an overnight fund, manages assets valued at ₹8498 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 4.86%. This fund has no exit load and an expense ratio of 0.08%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: No Equity, Debt – 13.72%, and Other – 86.28%.

Axis Overnight Fund

Axis Overnight Fund Direct-Growth is an Overnight mutual fund scheme from Axis Mutual Fund. This fund has been in existence for 5 years and 6 months, having been launched on 07/03/2019.

Axis Overnight Fund Direct-Growth as an overnight fund, manages assets valued at ₹7875.74 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 4.86%. This fund has no exit load and an expense ratio of 0.05%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: No Equity, Debt – 100.68%, and Other – (-)0.68%.

Aditya Birla SL Overnight Fund

Aditya Birla Sun Life Overnight Fund Direct-Growth is an Overnight mutual fund scheme from Aditya Birla Sun Life Mutual Fund. This fund has been in existence for 5 years and 10 months, having been launched on 30/10/2018.

Aditya Birla Sun Life Overnight Fund Direct-Growth as an overnight fund, manages assets valued at ₹7.80.32 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 4.84%. This fund has no exit load and an expense ratio of 0.08%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: No Equity, Debt – 6.05%, and Other – 93.95%.

Kotak Overnight Fund

Kotak Overnight Fund Direct-Growth is an Overnight mutual fund scheme from Kotak Mahindra Mutual Fund. This fund has been in existence for 5 years and 8 months, having been launched on 10/01/2019.

Kotak Overnight Fund Direct-Growth as an overnight fund, manages assets valued at ₹5474.94 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 4.83%. This fund has no exit load and an expense ratio of 0.08%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: No Equity, Debt – 4.82%, and Other – 95.18%.

UTI Overnight Fund

UTI Overnight Fund Direct-Growth is an Overnight 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 Overnight Fund Direct-Growth as an overnight fund, manages assets valued at ₹3771.29 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 4.84%. This fund has no exit load and an expense ratio of 0.06%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: No Equity, Debt – 2.69%, and Other – 97.31%.

Tata Overnight Fund

Tata Overnight Fund Direct-Growth is an Overnight mutual fund scheme from Tata Mutual Fund. This fund has been in existence for 5 years and 5 months, having been launched on 25/03/2019.

Tata Overnight Fund Direct-Growth as an overnight fund, manages assets valued at ₹3557.60 crores. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 4.84%. This fund has no exit load and an expense ratio of 0.06%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: No Equity, Debt – 4.04%, and Other – 95.96%.

HSBC Overnight Fund

HSBC Overnight Fund Direct-Growth is an Overnight mutual fund scheme from HSBC Mutual Fund. This fund has been in existence for 5 years and 3 months, having been launched on 21/05/2019.

HSBC Overnight Fund Direct – Growth as an overnight fund, manages assets valued at ₹3203.31 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 4.87%. This fund has no exit load and an expense ratio of 0.06%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises: No Equity, Debt – 5.31%, and Other – 94.69%.

What Is an Overnight Fund?

An overnight fund is a type of mutual fund that invests in very short-term instruments, typically maturing within a day. It aims to provide high liquidity and minimal risk by focusing on overnight investments in the money market.

These funds offer better returns than traditional savings accounts while maintaining high liquidity. They are ideal for investors seeking a safe place to park cash temporarily, with daily liquidity and minimal price fluctuations.

Overnight funds are commonly used by institutional investors and individuals to manage short-term cash needs. They are highly liquid, with investments held for just one day, minimizing the risk of interest rate fluctuations.

Features of Overnight Mutual Funds

The main features of overnight mutual funds include their ultra-short duration, high liquidity, minimal credit risk, and daily liquidity. These characteristics make them a secure and flexible investment option for managing short-term cash needs.

  • Ultra-Short Duration: Overnight funds invest in securities with maturities of one day, minimizing interest rate risk and ensuring stability.
  • High Liquidity: They offer easy access to cash, allowing investors to quickly redeem their investments without significant delays or penalties.
  • Minimal Credit Risk: These funds typically invest in high-quality, short-term instruments, reducing exposure to credit risk and safeguarding capital.
  • Daily Liquidity: Investors can transact daily, making these funds ideal for managing short-term cash requirements and optimizing liquidity in portfolios.

Best Overnight Mutual Funds Based on Expense Ratio

The table below shows the Best-performing Overnight Mutual Funds Based on the highest to lowest expense ratio.

NameExpense Ratio (%)Minimum SIP (Rs)
Quant Overnight Fund0.151000
PGIM India Overnight Fund0.151,000.00
Samco Overnight Fund0.13500
Edelweiss Overnight Fund0.11100
HDFC Overnight Fund0.1100
Franklin India Overnight Fund0.1500
Baroda BNP Paribas Overnight Fund0.09500
Nippon India Overnight Fund0.08100
Aditya Birla SL Overnight Fund0.08500
Kotak Overnight Fund0.08100

Best Overnight Funds Based on 3Y CAGR

The table below shows the Best Overnight Mutual Funds Based on the Highest 3Y CAGR.

NameCAGR 3Y (Cr)Minimum SIP (Rs)
Mirae Asset Overnight Fund5.741,000
Axis Overnight Fund5.741,000
Nippon India Overnight Fund5.73100
HSBC Overnight Fund5.73500
Aditya Birla SL Overnight Fund5.72500
Kotak Overnight Fund5.72100
LIC MF Overnight Fund5.721,000
DSP Overnight Fund5.72100
Baroda BNP Paribas Overnight Fund5.71500
Union Overnight Fund5.71500

Best Overnight Funds India Based on Exit Load

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

NameAMCExit Load (%)
SBI Overnight FundSBI Funds Management Limited0
ICICI Pru Overnight fund-Direct Plan-Unclaimed IDCW Transitory SchemeICICI Prudential Asset Management Company Limited0
HDFC Overnight FundHDFC Asset Management Company Limited0
Nippon India Overnight FundNippon Life India Asset Management Limited0
Axis Overnight FundAxis Asset Management Company Ltd.0
Aditya Birla SL Overnight FundAditya Birla Sun Life AMC Limited0
Kotak Overnight FundKotak Mahindra Asset Management Company Limited0
UTI Overnight FundUTI Asset Management Company Private Limited0
Tata Overnight FundTata Asset Management Private Limited0

Overnight Funds Returns

The table below shows Overnight Mutual Funds Returns Based on 1Y return

NameAbsolute Returns – 1Y (%)Minimum SIP (Rs)
Quant Overnight Fund7.221,000
Axis Overnight Fund6.831,000
Tata Overnight Fund6.83150
Mirae Asset Overnight Fund6.831,000
Nippon India Overnight Fund6.82100
Union Overnight Fund6.82500
Aditya Birla SL Overnight Fund6.81500
Kotak Overnight Fund6.81100
UTI Overnight Fund6.81500

Historical Performance of Overnight Funds

The table below shows the Historical Performance of Overnight Mutual Funds based on 5Y return

NameCAGR 5Y (Cr)Minimum SIP (Rs)
DSP Overnight Fund4.88100
PGIM India Overnight Fund4.881,000
HSBC Overnight Fund4.87500
Axis Overnight Fund4.861,000
Nippon India Overnight Fund4.86100
Baroda BNP Paribas Overnight Fund4.85500
LIC MF Overnight Fund4.851,000
Edelweiss Overnight Fund4.85100
Tata Overnight Fund4.84150
Aditya Birla SL Overnight Fund4.84500

Factors to Consider When Investing in Overnight Mutual Funds

The main factors to consider when investing in overnight mutual funds include fund performance, credit quality, expense ratio, and liquidity. Evaluating these factors helps ensure that the fund aligns with your investment goals and risk tolerance.

  • Fund Performance: Assess historical returns and consistency to gauge how well the fund has performed relative to its benchmarks and peers.
  • Credit Quality: Review the credit ratings of securities held by the fund to ensure they meet your risk tolerance and investment standards.
  • Expense Ratio: Consider the fund’s expense ratio, as lower fees can enhance net returns over time and impact overall investment efficiency.
  • Liquidity: Ensure the fund offers sufficient liquidity to meet your cash needs and allows for smooth transactions without significant delays or costs.

How to Invest in Top Overnight Funds?

To invest in top overnight funds, start by researching reputable fund houses and their offerings. Look for funds with a strong track record, low expense ratios, and consistent performance. Compare these factors to choose the best option for your needs.

Open an investment account with Alice Blue that offers access to these funds. Ensure the platform provides easy navigation and reliable customer support to facilitate a smooth investment process.

Once your account is set up, select the desired overnight fund and decide the amount you wish to invest. Complete the transaction through the brokerage platform, and monitor your investment regularly to ensure it meets your short-term cash management goals.

Market trends can significantly affect overnight funds as they rely on short-term interest rates. Rising rates typically boost returns on overnight funds, while falling rates can lead to lower yields, impacting investor returns and fund attractiveness.

Additionally, market volatility and economic conditions can influence liquidity and credit risk. During uncertain times, overnight funds might experience fluctuations in returns due to changes in market stability and interest rate expectations.

How Overnight Funds Perform in Volatile Markets?

In volatile markets, overnight funds generally offer stability due to their short-term investment horizon, focusing on high-quality, liquid assets. This approach helps minimize risk but may lead to lower returns compared to longer-duration investments.

However, during high volatility, these funds can experience increased demand for their safety and liquidity. While they provide security, their returns might be subdued, reflecting the overall market uncertainty and the low-interest-rate environment often associated with such periods.

Advantages of Investing in Overnight Mutual Funds

The main advantages of investing in overnight mutual funds include high liquidity, low risk, minimal investment horizon, and competitive returns. These features make them a suitable choice for investors seeking short-term investment options with stability and ease of access.

  • High Liquidity: Overnight funds offer quick access to your investment, allowing you to redeem units at the end of each business day without significant delays.
  • Low Risk: These funds invest in high-quality, short-term debt instruments, minimizing exposure to market volatility and credit risk, making them a stable investment option.
  • Minimal Investment Horizon: Overnight funds are ideal for investors looking for short-term investment solutions, typically holding investments for just one day, reducing the need for long-term commitment.
  • Competitive Returns: While low-risk, overnight funds can provide returns that are generally better than traditional savings accounts, making them an attractive option for short-term investments.

Risks of Investing in Overnight Mutual Funds

The main risks of investing in overnight mutual funds include interest rate risk, credit risk, liquidity risk, and lower returns compared to other investments. Despite their low-risk profile, understanding these risks is essential for effective investment decision-making.

  • Interest Rate Risk: Overnight funds are susceptible to fluctuations in interest rates. A rise in rates can lead to lower returns on the underlying securities, affecting fund performance.
  • Credit Risk: Although they invest in high-quality debt instruments, there is still a risk of credit events affecting the issuers of these securities, which can impact the fund’s stability.
  • Liquidity Risk: In rare cases, the fund might face liquidity issues if there is a sudden surge in redemption requests or if the underlying securities become difficult to sell.
  • Lower Returns: Compared to riskier investments, overnight funds generally offer lower returns, which might not meet the investment goals of those seeking higher yields.

Contribution of Overnight Funds to Portfolio Diversification

Overnight funds contribute to portfolio diversification by providing a low-risk, liquid investment option. They offer stability and a safe place to park cash, which can balance higher-risk assets and reduce overall portfolio volatility.

These funds also enhance liquidity, allowing investors to quickly access funds without significant losses. This flexibility supports better cash management and investment strategy execution, ensuring that portfolios remain agile and responsive to market conditions.

Who Should Invest In Overnight Mutual Funds?

Overnight mutual funds are ideal for investors seeking safe, short-term investment options with high liquidity. They suit those who need quick access to funds and prefer low-risk investments, typically offering returns slightly higher than traditional savings accounts.

They are also appropriate for conservative investors aiming to park cash temporarily while earning modest returns. These funds are useful for managing cash flow and minimizing idle funds, especially for individuals with short-term financial goals.

Impact of Fund Manager Expertise on Overnight Funds Performance

Fund manager expertise significantly impacts overnight funds’ performance by ensuring optimal allocation and selection of short-term instruments. Skilled managers navigate market fluctuations and maintain liquidity, enhancing returns and minimizing risk in these highly liquid investments.

Experienced fund managers employ strategies to manage interest rate risks and capitalize on market opportunities. Their expertise can lead to better risk-adjusted returns, as they effectively balance the trade-off between yield and safety in overnight funds.

Overnight Funds Taxation

Overnight funds are subject to short-term capital gains tax if held for less than three years. These gains are taxed at the individual’s applicable income tax slab rate, reflecting the fund’s brief holding period.

Long-term capital gains from overnight funds, if held for over three years, are taxed at 20% with indexation benefits. This typically results in a lower effective tax rate, making them a tax-efficient investment for longer holding periods.

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FAQs – Top Overnight Mutual Funds In India

1.What Are Overnight Funds In Mutual Funds?

Overnight funds in mutual funds are short-term investments that invest primarily in overnight securities like repos and treasury bills. They offer high liquidity and minimal risk, making them suitable for investors seeking a safe place for short-term cash.

2.What Are the Top 5 Overnight Mutual Funds?

Top Overnight Mutual Funds #1: SBI Overnight Fund
Top Overnight Mutual Funds #2: ICICI Pru Overnight fund-Direct Plan-Unclaimed IDCW Transitory Scheme
Top Overnight Mutual Funds #3: HDFC Overnight Fund
Top Overnight Mutual Funds #4: Nippon India Overnight Fund
Top Overnight Mutual Funds #5: Axis Overnight Fund
These funds are listed based on the Highest AUM

3.What Are the Best Overnight Mutual Funds?

The Best Overnight Mutual Funds based on expense ratio include Quant Overnight Fund, PGIM India Overnight Fund, Samco Overnight Fund, Edelweiss Overnight Fund, and HDFC Overnight Fund.

4.Is It Safe To Invest In Overnight Funds?

Yes, overnight funds are generally safe due to their investment in high-quality, short-term securities with minimal risk. They are designed for short-term parking of funds and typically offer stability and high liquidity, though not completely risk-free.

5.What Is The Difference Between Overnight And Liquid Funds?

The main difference between overnight and liquid funds is the investment duration. Overnight funds invest in securities maturing in one day, while liquid funds invest in instruments with a maturity of up to 91 days for slightly higher returns.

6.Which Overnight Mutual Fund Has the Best Returns?

The Best Overnight Mutual Funds based on 3Y CAGR include Mirae Asset Overnight Fund, Axis Overnight Fund, Nippon India Overnight Fund, HSBC Overnight Fund, and Aditya Birla SL Overnight Fund.

7.How to Invest in the Best Overnight Mutual Fund?

To invest in the best overnight mutual fund, research top options and compare their returns. Use Alice Blue to select and purchase the fund. Ensure the platform offers low fees and aligns with your investment goals.

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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.

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