Short Term Mutual Funds

What are the features of short duration mutual funds?

• Offers stable returns on investment

• Low volatility risk since the fund primarily invests in debt and money market securities

• There’s no capping on the maximum investment amount

• Returns from these funds range in the 5% to 8% limit

• You can get better returns compared to fixed deposits while minimising investment risks

Things to keep in mind when investing in short duration funds

What should be the investment horizon for short duration funds?

• Short duration funds invest in both short and long-term securities. However, exposure to long-term securities is low

• They are suitable for investors with a low to medium investment horizon

• If you want to invest for more than a year but up to 2-3 years, these funds would be a good choice

What is the tax implication of short duration funds?

• Returns earned are taxed at your income tax slab rates

• Dividends earned, if any, are taxed at your income tax slab rates

What are the payout options?

• Dividend option

  Earn dividends on your investment at regular intervals

• Growth option

  Accumulate the returns over the investment tenure and get a lump sum amount on redemption