Best Overnight Funds

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

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.

Best Overnight Funds Based on 3Y CAGR

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

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.

Overnight Funds Returns

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

Historical Performance of Overnight Funds

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

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.

Impact of Market Trends on Overnight Funds

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.

FAQs – Top Overnight Mutual Funds In India

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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.