WHAT ARE BEST SHORT-TERM MUTUAL FUNDS?
Mutual Fund schemes offering a maturity from a minimum of 15-91 days or below are called short-term mutual funds. Here, the maturity depends on the assets and it is best suited for people who are looking for asset options but with low-risk. Regarding the same, liquid funds is an amazing bet and others who are looking for the maturity period of 2-4 months can go for ultra-short-term funds.
HOW ARE BEST SHORT-TERM MUTUAL FUNDS TAXED?
Growth option and dividend option are two categories and the tax-treatment for a growth option is similar as that to a fixed deposit. There is an option of tax-exempt for an investor who opts for a dividend option. However, there is no tax on investment.
WHAT IS THE RETURNS POTENTIAL?
As compared to bank deposits the best short-term mutual funds in India can offer higher returns. The return rate is varying from 8-9%, particularly based on the assets in the (fund) portfolio. Talking about tax-benefits, the potential of returns on these investments are higher than other forms of investment(s).
TOP SHORT TERM MUTUAL FUNDS
Following are a few:
- HDFC Medium Term Opportunities Fund – Growth Option: With an asset class of fixed interest HDFC Medium Term Opportunities comes with a minimum amount of INR. 5000 ad a top-up amount of INR. 1000. It is a good bet!
- Aditya Birla Sun Life Short Term Fund – Growth – Regular Plan: With a NAV of INR. 65.9793, this fund is a good investment in the money market asset class. It requires a minimum investment of INR. 1000 and the same amount for top-up as well.
- ICICI Prudential Banking and PSU Debt Fund – Growth: The fund is a fixed interest asset class with a minimum investment of INR. 5000 and top-up of INR.1000. The NAV defines here is of INR. 19.7976.
- ICICI Prudential Short Term – Growth Option: This short-term debt fund has a high expense ratio of 1.21% and a bit higher NAV. Presently, it stands at INR. 35.946. It requires a minimum investment of INR. 1000 and the same goes with the top-up as well.
- ICICI Prudential Banking and PSU Debt Fund Retail Growth: These come under the fixed rate of interest and has an expense ratio – 0.53%. With a NAV of INR. 18.6656 and a minimum amount of INR. 5000 and a top-up of INR. 1000.
- HDFC Banking and PSU Debt Fund- Regular Plan – Growth Option: These funds offer a minimum investment option of INR. 5000 and a top-up of INR. 1000. With a compound annual growth rate of 8.69% and an expense ratio of 0.71%, this fund has given a positive outlook for investors.
Source: cleartax.in
A Few More:
| Fund Name | 3 Years | 5 Years |
| Aditya Birla SL Savings Fund (G) | 7.96% | 8.50% |
| ICIC Pru Savings Fund (G) | 7.78% | 8.35% |
| UTI Treasury Advantage Fund -INST (G) | 7.70% | 8.25% |
| Aditya Birla SL Short Term Opp Fund (G) | 7.67% | 8.57% |
| Reliance Prime Debt Fund | 7.44% | 8.09% |
Source: cleartax.in
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*Mutual fund investments are subject to market risks. Please read the scheme information and other related documents carefully before investing.