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Top 5 mutual funds to invest for ultra short term to build your emergency fund

The ever-growing and developing mutual funds market has a lot in store to offer its investors and customers. Among the various SIP and lump sum investment plans that are available in mutual funds, there is a facility of ultra short term funds as well. The ultra short term funds are investments made in debt instruments like treasury bills and corporate bonds etc.

The duration of these funds varies from 3 to 6 months. These funds and are an ideal investment option for those who are looking for making a very short term investment in order to utilize their liquid cash to earn returns on it. Click to find out the best mutual funds to invest that are available for making ultra short term investment. These investments face very less market volatility and therefore one can expect assured returns from the investments in a short period of time.

People who seek to invest temporarily available liquid cash rather than keeping it in their coffers can definitely try ultra short term mutual funds investments.

We always look for the best in everything, and when it comes to ultra short term investments then the 5 best mutual funds to invest in this category are as follows:

ICICI Prudential Ultra Short Term Fund

One of the best mutual funds to invest, this mutual fund scheme was launched on 3rd May, 2011. Since then, the objective of this fund is to generate returns by making investments in debts and other money market instruments. This fund surpassed all the other similar funds by providing returns of 7.45% in the last three financial years. The minimum investment amount of this fund is INR 5,000 and the AUM(Assets Under Management) values INR 8,612 crores. The risks involved in this investment are moderate and the expense ratio is 1.09%. This fund has been a consistent performer in the past years which is the reason why it is named under the best mutual funds list of this category.

SBI Magnum Ultra Short Duration Fund

Like any other ultra-short term mutual funds, this fund makes investments in debt instruments. This fund was launched on 21st May 1999. The AUM of this fund amounts to INR 14,116 and the minimum amount of investment is INR 5,000. The risks involved in this investment are low which makes it one of the best mutual funds to invest for new investors. The expense ratio is only 0.28% and the fund managed to provide returns of 7.5% in the previous financial year. This fund has also been giving a consistent performance in the mutual funds market over the last few years.

Aditya Birla Sun Life Savings Fund

The current statistics reveal that this fund has the highest AUM value in the market which amounts to INR 16,489, allowing it to appear on the list of best mutual funds in India. This fund was launched on 16th April 2003 with the same objective as that of the other ultra-short term mutual funds. The fund has managed to stand out in the market and is among the best mutual funds to invest because it allows a minimum investment of INR 1,000 only. The expense ratio of this fund is 0.35% and the risks involved are moderately low. In the last year, the returns were 7.92%, which is remarkably good and its last 3-years returns also amounted to a good rate of 7.78%. One can definitely make an ultra short term investment in this mutual fund without any doubt.

Kotak Savings Fund

This fund was launched on 13th August 2004 with the general objective of generating returns through investments in debt instruments and other market mechanisms. The AUM of this fund is INR 12,951 and the minimum amount of investment of INR 5,000. The fund delivered a decent performance in the last three years and managed to generate returns of around 7.6%. The expense ratio is 0.68% and it possesses a moderate risk factor, which makes it one of the best mutual funds to invest. This fund also allows SIP investments with a minimum amount of INR 1,000 and the effective maturity of this fund is 5 months 23 days. All these features make it a worthy inclusion in the list of ultra short term mutual funds.

PGIM India Ultra Short Term Fund

This fund makes it to the list of best mutual funds to invest in this category because it provided the maximum returns on investments in the last year which amounted to 13.4%. Its returns in the past three years are also averaged at 9.55%, which is considerably good. The fund has managed to beat its own benchmark and has given a consistent performance in the mutual funds market. Its minimum investment amount is INR 5,000 and the AUM is INR 143 crores.

Ultra-short term mutual funds allow an individual to multiply the value of his liquid cash in a short period of time. It involves moderately low risks and therefore, can be given a try without much hesitation.

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