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An overnight mutual fund is a type of debt mutual fund which invests a majority of its portfolio in securities maturing within a day. The fund, thus, has a short-term investment horizon.
Invest systematically in regular amounts and build a corpus with a disciplined investing habit.
START SIPLump sum
Invest once with the facility of lump sum investing and save at your will. Time the market correctly and earn good returns.
INVEST LUMPSUMTotal Amount Invested
₹ 0
after 30 years you will get a return of
₹ 0
Disclaimer: Projections/estimations is backtested using historical data.
Total Amount Invested
₹ 0
after 30 years you will get a return of
₹ 0
Disclaimer: Projections/estimations is backtested using historical data.
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Overnight Mutual Funds are a type of debt fund investing in securities with a one-day maturity. They are open-ended debt funds actively managed and suitable for investors looking to park their surplus funds for a short period.
Negligible credit risk since the instruments mature within a day
No interest rate risk as a change in interest rates wouldn't affect securities maturing in a day
Can offer better returns than savings accounts
You can deposit and withdraw your investment at your convenience
Invest through SIP or lump sum
Check the expense ratio and choose a fund which has the lowest expense ratio for better returns
Since the returns are low, compare and select the fund delivering better returns than its competitors
Overnight funds are suitable if you want ready access to funds. If you can stay invested for several weeks or months, choose another fund for better returns.
Risk of default on the debt instrument
Risk of rising interest rates, which reduces the value of debt instruments
Risk of not getting good returns on reinvestment.
Risk of inflation reducing the returns from the debt fund
Risk of not being able to trade in debt instruments
Returns earned are taxed at your income tax slab rates
Dividends earned, if any, are taxed at your income tax slab rate.
Earn dividends on your investment at regular intervals
Accumulate the returns over the investment tenure and get a lump sum amount on redemption
Overnight funds are mutual funds
that invest primarily in short-term debt securities with one-day maturity. They are among the safest debt funds
available and might provide higher returns than savings bank accounts.
However, please go through all the factors involved in both options and then make a decision best suited to your personal needs.
The minimum investment amount for overnight funds varies as per the fund house.
Firstly, scrutinise the fund for its returns and performance consistency. Secondly, check the expense ratios of your shortlisted funds. Most importantly, make sure that you are investing in an overnight fund not because of a recent credit mishap or financial issue but towards a sound financial goal.
Since overnight funds do not carry an exit load, redemption is easy. You can directly use the same mobile app you used before to make your investment and place a redemption order within minutes.
No, overnight funds do not need to be monitored and managed for too long, making their expense ratio lower than other funds.