Unlock Financial Tools, Investment Insights, And Expert Guidance – All In One Convenient App !
Visit Our ABCD PageHealth Insurance
Housing Finance
Life Insurance
Mutual Funds
Personal Insurance
SME Finance
Stock & Securities
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
Expected Wealth Gain
₹ 0
Total Amount Invested
₹ 0
Expected Wealth Gain
₹ 0
Invest in mutual funds online with the ABCD app and build your portfolio one click at a time.
Scan the QR code to download our Mobile App
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.
No, overnight funds invest in debt securities with overnight maturity.
Overnight funds are best suited for preserving surplus funds with modest returns and high liquidity.
Low risk, high liquidity, moderate returns, and investment flexibility are some key benefits of overnight funds.
Yes, overnight fund returns can change as per changes in interest rates
a. Investors with a very short investment horizon: Investors with a very short investment horizon, such as those seeking to park funds overnight or for a few days, can benefit from the high liquidity and minimal interest rate risk of overnight funds.
b. Medium to route investments in equity funds: Medium-term investors looking to allocate funds from equity investments can utilise overnight funds as a temporary parking option during market uncertainties or while awaiting better investment opportunities.
There are no specific requirements. You're free to redeem as many units or amounts as you desire.
Yes, overnight mutual fund schemes are ideal for ultra-conservative investors seeking minimal risk exposure and stable returns over a short investment horizon, making them a suitable choice for capital preservation.
Overnight funds offer higher liquidity and potential returns compared to FDs , making them suitable for short-term investments. However, FDs provide higher stability and fixed returns over a longer tenure, appealing to those seeking security and steady growth.
Withdrawal from Overnight Mutual Funds typically occurs on the next business day after the redemption request is placed, ensuring quick access to funds without any lock-in period.
Overnight funds invest in securities with a maturity of one day, offering higher liquidity but potentially lower returns than liquid funds, which invest in debt instruments with maturities up to 91 days, providing slightly higher returns with still high liquidity.