List Of Best Mutual Funds For Short Term For 3 Months

The below table shows a list Of the Best Mutual Funds For the Short Term For 3 Months based on AUM, NAV, and minimum SIP.

Short Term Mutual Funds Meaning

Short-term mutual funds are investment vehicles that focus on securities with short maturity periods, typically less than three years. They aim to provide investors with higher liquidity and lower risk, making them suitable for meeting near-term financial goals or as a temporary place to park cash.

These funds typically invest in government bonds, treasury bills, and commercial paper. By focusing on short-duration securities, they offer stability and quick access to funds, minimizing the impact of market volatility on the investment.

Short-term mutual funds are particularly appealing to conservative investors or those needing funds for imminent expenses. They offer a balance between earning returns and maintaining easy access to invested capital, all while keeping risk at a manageable level.

Best Mutual Fund For Short Term For 3 Months In India

The table below shows the best Mutual funds for the Short Term For 3 Months In India based on the lowest to highest expense ratio.

Mutual Fund For Short Term For 3 Months

The table below shows Mutual Fund For Short Term For 3 Months based on the Highest 3Y CAGR. 

Best Mutual Fund For Short Term For 3 Months

The table below shows Best Mutual Fund For Short Term For 3 Months based on exit load, i.e., the fee that the AMC charges investors when they exit or redeem their fund units.

Mutual Funds For Short Term For 3 Months

The table below shows Mutual Funds For Short Term For 3 Months based on Absolute 1-Year Return and AMC.

Who Should Invest In  Best Mutual Funds For 3 Months in the Short Term?

Individuals seeking a very short-term investment option for surplus cash should consider the best mutual funds for a 3-month period. These funds are ideal for investors looking to earn returns slightly better than traditional savings accounts while maintaining high liquidity and low risk.

Investors who have an upcoming financial obligation, such as a down payment or a large purchase, can benefit from these funds. They provide a safe place to grow funds on a very short timeline without the volatility associated with longer-term investments.

Additionally, these funds are suitable for conservative investors who prefer not to expose their capital to significant market fluctuations. They serve as a temporary parking area for funds, offering better accessibility and flexibility compared to fixed deposits or other more rigid short-term investment vehicles.

How To Invest in the  Mutual Funds For Short Term For 3 Months?

To invest in mutual funds for a short term of three months, start by identifying funds with a focus on short-duration securities. Evaluate their performance, risk level, and management fees. Utilize an online brokerage platform or a financial institution to make the investment easily and securely.

Next, complete any necessary KYC (Know Your Customer) procedures required by the brokerage or financial platform. Ensure you understand the terms, especially regarding redemption policies and any associated fees, as these can impact your returns over such a short period.

Finally, monitor the performance of your investment closely during the three-month period. Short-term investments can be sensitive to sudden market changes, so staying informed will allow you to react swiftly if the economic landscape shifts or if your financial goals change.

Performance Metrics Of Mutual Funds For Short Term For 3 Months

Performance metrics for mutual funds targeting a short term of three months include yield, return rate, and expense ratio. Additionally, liquidity and the fund’s ability to manage volatility are crucial for assessing its suitability for such a brief investment period.

Yield is a key indicator, showing the immediate income potential of the fund. High yields are attractive for short-term investments, but it’s important to balance yield with risk. Investors should compare the yield against similar funds to evaluate competitiveness and potential financial gains.

The expense ratio also plays a significant role; lower ratios are preferable since high fees can significantly diminish returns over a short duration. Additionally, liquidity is vital, ensuring that investors can access their funds without substantial penalties or delays, which is crucial for short-term needs.

Benefits of Investing in Best Mutual Funds For Short Term For 3 Months

The main benefits of investing in the best mutual funds for a short term of three months include high liquidity, lower risk, and potential for modest returns. These funds provide a safe option for temporarily parking surplus cash with better yields than traditional savings accounts.

• Rapid Returns Ready: Short-term mutual funds are designed to provide returns over a brief period, making them perfect for investors looking for quick financial gains. These funds can outperform traditional savings accounts, offering a more profitable option for cash that isn’t needed immediately.
• Liquidity Lux: These funds offer high liquidity, which means you can access your invested money quickly and easily. This feature is crucial for those who may need to pull out funds at short notice without facing hefty penalties or lengthy processes.
• Safety Shield: Investing in short-term mutual funds carries lower risk compared to stocks or long-term bond investments. This makes them an attractive option for conservative investors or those new to the market who are looking for stable, secure investment avenues.
• Fee Favorability: Typically, short-term mutual funds have lower expense ratios than more specialized or longer-term funds. Lower fees mean more of your investment goes towards earning returns, rather than covering administrative costs.
• Flexibility Feature: These funds often allow investors to start with minimal investment amounts and offer options to add or withdraw funds periodically. This flexibility is beneficial for managing cash flow effectively while still participating in the investment market.

Challenges Of Investing In Mutual Funds For Short Term For 3 Months

The main challenges of investing in mutual funds for a short term of three months include relatively lower returns due to conservative investment strategies and the impact of fees, which can significantly eat into profits, especially given the short investment horizon.

• Quick Turnaround Quirks: Investing for only three months means any entry or exit fees, along with regular management fees, disproportionately impact overall returns. Even a small percentage fee can take a significant chunk out of the earnings from such a brief investment period.
• Earnings Efficiency Issue: Due to their conservative nature, short-term mutual funds generally yield lower returns compared to more aggressive, longer-term investments. This limitation can be frustrating for investors looking to maximize their earnings in a short window.
• Interest Rate Sensitivity: Short-term funds are particularly sensitive to interest rate fluctuations. A sudden increase can depreciate bond values within the funds, affecting the net asset value and potentially leading to losses.
• Market Timing Mistakes: The short duration increases the risk associated with market timing. Incorrect timing when entering or exiting these investments can lead to suboptimal performance, which is more impactful over shorter investment periods.
• Limited Growth Opportunities: With only a three-month window, there’s a narrow scope for capital appreciation. Investors might miss out on the higher growth potentials typically associated with longer-term investment horizons.

Introduction to List Of Best Mutual Funds For Short Term For 3 Months

ICICI Pru Short Term Fund

ICICI Prudential Short Term Fund Direct Plan-Growth is a Short Duration mutual fund scheme from Icici Prudential Mutual Fund. This fund has been in existence for 11 yrs 10 m, having been launched on 01/01/2013. 

The ICICI Pru Short Term Fund, a Short Duration Fund category, has Assets Under Management (AUM) of Rs. 19,746.04 Cr. It boasts a 5-year Compound Annual Growth Rate (CAGR) of 7.61%. The fund has no exit load and an expense ratio of 0.45. It is classified under the Moderate-risk category by SEBI. 

The actual asset composition includes : No Equity, 96.62% Debt, 3.38% in Others.

Kotak Bond Short Term Fund

Kotak Bond Short Term Fund Direct-Growth is a Short Duration mutual fund scheme from Kotak Mahindra Mutual Fund. This fund has been in existence for 11 yrs 10 m, having been launched on 01/01/2013. 

The Kotak Bond Short Term Fund falls under the Short Duration Fund category, with an Assets Under Management (AUM) of Rs.16,806.44 cr. It features a 5-year Compound Annual Growth Rate (CAGR) of 6.9%. The fund has no exit load and an expense ratio of 0.37. According to SEBI, it is classified in the Moderate-risk category. 

The actual asset composition includes : No Equity, 96.44% Debt, 3.56% in Others.

HDFC Short Term Debt Fund

HDFC Short Term Debt Fund Direct Plan-Growth is a Short Duration mutual fund scheme from Hdfc Mutual Fund. This fund has been in existence for 11 yrs 10 m, having been launched on 01/01/2013. 

The HDFC Short Term Debt Fund, categorized Short Duration Fund, manages Assets Under Management (AUM) of Rs. 14,622.22 cr. It has achieved a 5-year Compound Annual Growth Rate (CAGR) of 7.14%. The fund imposes no exit load and maintains an expense ratio of 0.4. It is rated as Moderate risk by SEBI. 

The actual asset composition includes : No Equity, 96.55% Debt, 3.45% in Others.

SBI Short Term Debt Fund

SBI Short Term Debt Fund Direct-Growth is a Short Duration mutual fund scheme from Sbi Mutual Fund. This fund has been in existence for 11 yrs 10 m, having been launched on 01/01/2013. 

The SBI Short Term Debt Fund, part of the Short Duration Fund category, holds an Assets Under Management (AUM) of Rs. 13,299.65 cr. It reports a 5-year Compound Annual Growth Rate (CAGR) of 6.56%. The fund has no exit load and an expense ratio of 0.35. SEBI classifies it as a Moderate-risk fund. 

The actual asset composition includes : No Equity, 94.68% Debt, 5.32% in Others.

Bandhan Bond Fund – Short Term Plan

Bandhan Bond Fund Short Term Plan Direct-Growth is a Short Duration mutual fund scheme from Bandhan Mutual Fund. This fund has been in existence for 11 yrs 10 m, having been launched on 01/01/2013. 

The Bandhan Bond Fund – Short Term Plan, which is in the Short Duration Fund category, has an Assets Under Management (AUM) of Rs.9,328.91 cr. It has a 5-year Compound Annual Growth Rate (CAGR) of 6.54%. The fund’s exit load is nil and it has an expense ratio of 0.33. It is classified in the Moderate-risk category by SEBI. 

The actual asset composition includes : No Equity, 97.2% Debt, 2.8% in Others.

Axis Short Duration Fund

Axis Short Duration Fund Direct Fund-Growth is a Short Duration mutual fund scheme from Axis Mutual Fund. This fund has been in existence for 11 yrs 10 m, having been launched on 01/01/2013.

The Axis Short Duration Fund, which is in the Short Duration Fund category, has an Assets Under Management (AUM) of Rs.9,120.74 cr. It has a 5-year Compound Annual Growth Rate (CAGR) of 7.03%. The fund’s exit load is nil and it has an expense ratio of 0.36. It is classified in the Moderate-risk category by SEBI. 

The actual asset composition includes : No Equity, 98.83% Debt, 1.17% in Others.

Aditya Birla SL Short Term Fund

Aditya Birla Sun Life Short Term Direct Fund Direct-Growth is a Short Duration mutual fund scheme from Aditya Birla Sun Life Mutual Fund. This fund has been in existence for 11 yrs 10 m, having been launched on 01/01/2013.

The Aditya Birla SL Short Term Fund, which is in the Short Duration Fund category, has an Assets Under Management (AUM) of Rs.8,759.95 cr. It has a 5-year Compound Annual Growth Rate (CAGR) of 7.34%. The fund’s exit load is nil and it has an expense ratio of 0.38. It is classified in the Moderate-risk category by SEBI. 

The actual asset composition includes : No Equity, 95.97% Debt, 4.03% in Others.

Nippon India Short Term Fund

Nippon India Short Term Fund Direct-Growth is a Short Duration mutual fund scheme from Nippon India Mutual Fund. This fund has been in existence for 11 yrs 10 m, having been launched on 01/01/2013. 

The Nippon India Short Term Fund, which is in the Short Duration Fund category, has an Assets Under Management (AUM) of Rs.6,974.03 cr. It has a 5-year Compound Annual Growth Rate (CAGR) of 7.08%. The fund’s exit load is nil and it has an expense ratio of 0.38. It is classified in the Moderate-risk category by SEBI. 

The actual asset composition includes : No Equity, 95.99% Debt, 4.01% in Others.

DSP Short Term Fund

DSP Short Term Direct Plan-Growth is a Short Duration mutual fund scheme from Dsp Mutual Fund. This fund has been in existence for 11 yrs 10 m, having been launched on 01/01/2013. 

The DSP Short Term Fund, which is in the Short Duration Fund category, has an Assets Under Management (AUM) of Rs.2,824.43 cr. It has a 5-year Compound Annual Growth Rate (CAGR) of 6.47%. The fund’s exit load is nil and it has an expense ratio of 0.34. It is classified in the Moderate-risk category by SEBI. 

The actual asset composition includes : No Equity, 97.11% Debt, 2.89% in Others.

UTI Short Duration Fund

UTI Short Duration Direct-Growth is a Short Duration mutual fund scheme from Uti Mutual Fund. This fund has been in existence for 11 yrs 10 m, having been launched on 01/01/2013. 

The UTI Short Duration Fund, which is in the Short Duration Fund category, has an Assets Under Management (AUM) of Rs.2,567.03 cr. It has a 5-year Compound Annual Growth Rate (CAGR) of 8.02%. The fund’s exit load is nil and it has an expense ratio of 0.41. It is classified in the Moderate-risk category by SEBI. 

The actual asset composition includes : No Equity, 96.31% Debt, 3.69% in Others.

Best Mutual Funds For Short Term For 3 Months – FAQ

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Disclaimer: The above article is written for educational purposes, and the companies’ data mentioned in the article may change with respect to time The securities quoted are exemplary and are not recommendatory.