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Overnight Mutual Funds
3 Year Average Returns
5.98%
Funds on Dhan
42
Overnight Funds are a type of debt funds that invests in overnight securities with a maturity of one day. These Funds offer high liquidity and low-interest rate risk. While these are the best Overnight Mutual Funds to invest in, you must know these 3 things before you start investing.
- Goal: Overnight Funds invest in securities that mature in one day, offering the utmost in liquidity and low risk.
- Investment Horizon: Ideal for extremely short-term investments, perfect for parking surplus cash with almost immediate access to Funds.
- Risk: These Funds are among the safest investment options.
Best Overnight Funds to Invest in 2026
Note: 3Y & 5Y returns are annualised. Rest everything is absolute.
Scheme | AUM (in Cr.) | Fund Age | 1W | 1M | 3M | 6M | 1Y | 3Y  | 5Y |
|---|---|---|---|---|---|---|---|---|---|
Compare | ₹ 67 | 6 Yrs | 0.11% | 0.48% | 1.32% | 2.82% | 5.49% | 6.14% | 5.91% |
Compare | ₹ 15,219 | 7 Yrs | 0.11% | 0.48% | 1.32% | 2.64% | 5.30% | 6.04% | 5.82% |
Compare | ₹ 7,732 | 7 Yrs | 0.11% | 0.48% | 1.32% | 2.65% | 5.30% | 6.04% | 5.80% |
Compare | ₹ 1,034 | 3 Yrs | 0.11% | 0.48% | 1.34% | 2.67% | 5.35% | 6.03% | 0.00% |
Compare | ₹ 7,372 | 7 Yrs | 0.11% | 0.47% | 1.31% | 2.64% | 5.28% | 6.02% | 5.81% |
Compare | ₹ 9,599 | 7 Yrs | 0.11% | 0.48% | 1.31% | 2.63% | 5.28% | 6.02% | 5.79% |
Compare | ₹ 1,165 | 7 Yrs | 0.11% | 0.47% | 1.31% | 2.63% | 5.27% | 6.02% | 5.80% |
Compare | ₹ 912 | 7 Yrs | 0.11% | 0.48% | 1.32% | 2.65% | 5.29% | 6.01% | 5.79% |
Compare | ₹ 56 | 3 Yrs | 0.10% | 0.45% | 1.25% | 2.53% | 5.04% | 6.01% | 0.00% |
Compare | ₹ 2,970 | 7 Yrs | 0.11% | 0.47% | 1.31% | 2.63% | 5.28% | 6.01% | 5.79% |
Compare | ₹ 1,008 | 7 Yrs | 0.11% | 0.47% | 1.31% | 2.63% | 5.27% | 6.01% | 5.79% |
Compare | ₹ 1,619 | 7 Yrs | 0.11% | 0.48% | 1.32% | 2.63% | 5.27% | 6.01% | 5.79% |
Compare | ₹ 5,781 | 7 Yrs | 0.11% | 0.47% | 1.31% | 2.62% | 5.27% | 6.01% | 5.80% |
Compare | ₹ 642 | 6 Yrs | 0.11% | 0.48% | 1.32% | 2.65% | 5.28% | 6.01% | 5.78% |
Compare | ₹ 6,029 | 13 Yrs | 0.11% | 0.47% | 1.31% | 2.63% | 5.27% | 6.01% | 5.78% |
Compare | ₹ 984 | 7 Yrs | 0.11% | 0.48% | 1.32% | 2.65% | 5.33% | 6.01% | 5.76% |
Compare | ₹ 732 | 7 Yrs | 0.11% | 0.47% | 1.31% | 2.63% | 5.27% | 6.00% | 5.78% |
Compare | ₹ 11,187 | 8 Yrs | 0.11% | 0.48% | 1.31% | 2.63% | 5.26% | 6.00% | 5.79% |
Compare | ₹ 95 | 7 Yrs | 0.11% | 0.48% | 1.31% | 2.62% | 5.25% | 6.00% | 5.79% |
Compare | ₹ 13,293 | 7 Yrs | 0.11% | 0.47% | 1.31% | 2.63% | 5.27% | 5.99% | 5.77% |
Compare | ₹ 1,109 | 7 Yrs | 0.11% | 0.47% | 1.31% | 2.63% | 5.24% | 5.99% | 5.77% |
Compare | ₹ 35,912 | 13 Yrs | 0.11% | 0.47% | 1.31% | 2.62% | 5.23% | 5.97% | 5.75% |
Compare | ₹ 292 | 7 Yrs | 0.11% | 0.47% | 1.31% | 2.64% | 5.26% | 5.96% | 5.73% |
Compare | ₹ 12,205 | 13 Yrs | 0.11% | 0.47% | 1.30% | 2.61% | 5.23% | 5.96% | 5.74% |
Compare | ₹ 76 | 7 Yrs | 0.10% | 0.47% | 1.28% | 2.57% | 5.14% | 5.95% | 5.75% |
Compare | ₹ 376 | 7 Yrs | 0.10% | 0.52% | 1.35% | 2.68% | 5.27% | 5.95% | 5.73% |
Compare | ₹ 425 | 4 Yrs | 0.10% | 0.47% | 1.31% | 2.62% | 5.21% | 5.94% | 0.00% |
Compare | ₹ 29 | 4 Yrs | 0.10% | 0.47% | 1.29% | 2.58% | 5.14% | 5.94% | 0.00% |
Compare | ₹ 67 | 4 Yrs | 0.10% | 0.47% | 1.30% | 2.62% | 5.26% | 5.94% | 0.00% |
Compare | ₹ 67 | 4 Yrs | 0.10% | 0.47% | 1.30% | 2.62% | 5.26% | 5.94% | 0.00% |
Compare | ₹ 33 | 7 Yrs | 0.10% | 0.47% | 1.28% | 2.58% | 5.16% | 5.93% | 5.65% |
Compare | ₹ 203 | 6 Yrs | 0.10% | 0.46% | 1.28% | 2.54% | 5.09% | 5.89% | 5.71% |
Compare | ₹ 298 | 3 Yrs | 0.10% | 0.46% | 1.28% | 2.57% | 5.11% | 5.89% | 0.00% |
Compare | ₹ 14 | 7 Yrs | 0.10% | 0.48% | 1.26% | 2.51% | 5.01% | 5.78% | 5.59% |
Compare | ₹ 31 | 4 Yrs | 0.10% | 0.45% | 1.23% | 2.49% | 4.97% | 5.76% | 0.00% |
Compare | ₹ 95 | 0 Yrs | 0.11% | 0.49% | 1.32% | 0.00% | 0.00% | 0.00% | 0.00% |
Compare | ₹ 6 | 3 Yrs | 0.09% | 0.45% | 1.39% | 2.85% | 6.16% | 0.00% | 0.00% |
Compare | ₹ 348 | 1 Yrs | 0.10% | 0.48% | 1.32% | 2.63% | 5.31% | 0.00% | 0.00% |
Compare | ₹ 722 | 1 Yrs | 0.11% | 0.47% | 1.32% | 2.64% | 5.28% | 0.00% | 0.00% |
Compare | ₹ 28 | 0 Yrs | 0.10% | 0.45% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
Compare | ₹ 100 | 0 Yrs | 0.10% | 0.46% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
Compare | ₹ 123 | 1 Yrs | 0.10% | 0.46% | 1.28% | 2.58% | 5.14% | 0.00% | 0.00% |
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Disclaimer: Mutual fund investments carry market risks; read all scheme-related documents carefully. Past performance does not guarantee future returns.
About Overnight Funds
Overnight funds are a category of Debt Funds that invest in securities with a maturity of one day. They are designed for investors looking for the utmost safety and liquidity in their investments. These funds invest in overnight securities, meaning the investment is essentially for a single day, with the fund buying securities one day and selling them the next. Here's what you should consider:
- Very Low Risk: The primary feature of overnight funds is their extremely low risk, as they invest in securities with a very short maturity period.
- High Liquidity: These funds offer high liquidity, making them suitable if you need quick access to your money.
- Stability: Overnight funds provide stability with minimal fluctuations in returns, as the investment duration is only one day.
Investing in overnight funds comes with several benefits, particularly if you're seeking a very safe and liquid investment option:
- Minimal Risk: These funds carry the least amount of risk among all Mutual Funds categories due to their investment in securities with a one-day maturity.
- High Liquidity: They offer high liquidity, allowing you to access your funds almost immediately.
- Stable Returns: While the returns are modest, they are usually stable and predictable, with minimal fluctuations.
- No Lock-in Period: Overnight funds do not have any lock-in period, making them a flexible investment option.
- Suitable for Emergency Funds: If you're looking to create or maintain an emergency fund, these funds can be a good choice due to their liquidity and low risk.
Determining if overnight funds are a good investment choice for you hinges on your specific financial needs, risk tolerance, and investment duration. Overnight funds invest in securities that have a one-day maturity, making them one of the lowest-risk investment options available. They can be an appealing choice under certain circumstances:
- Risk Tolerance:: These funds are ideal if you have an extremely low risk tolerance, as they invest in very short-term instruments and hence have minimal market risk.
- Investment Horizon: If you're looking for a place to park your funds for a very short duration, perhaps even a day, overnight funds can be suitable.
- Liquidity Needs: These funds offer high liquidity, making them a good choice if you require quick access to your funds.
Overnight funds are particularly well-suited for certain types of investors:
- Risk-Averse Investors: If you prefer to avoid market risk and volatility, these funds are an appropriate choice.
- Short-Term Financial Requirements: Ideal for individuals or businesses looking to park surplus funds for very short periods, possibly even overnight.
- Emergency Fund Parking: These funds can be used for keeping your emergency funds, where the primary goal is quick accessibility and capital preservation.
- Corporate Treasuries: Suitable for corporate treasuries or institutional investors who manage large cash flows and need a safe, liquid place to park funds short-term.
- First-time Mutual Fund Investors: If you are new to mutual funds and want to start with a low-risk option, overnight funds can be a starting point.
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FAQs
Overnight Funds invest in securities that mature in one day, essentially overnight. This means your investment is almost as liquid as cash, allowing the fund to reinvest in new securities daily. They offer a relatively safe avenue to earn returns overnight, making them an ideal choice for those looking for minimal risk and high liquidity.
Overnight Funds are typically invested in overnight securities, including treasury bills and other government securities that mature the next day. These investments are very low risk, as they are short-term and often backed by the government, ensuring the principal amount is safe while generating returns.
Overnight Funds can give a profit, albeit modest, through the interest earned on the overnight securities they invest in. While the returns are lower compared to longer-term investment options, they offer a very safe way to park your funds, especially for short periods, with minimal risk.
No, Overnight Funds are not tax-free. The interest income you earn from these funds is added to your overall income and taxed according to your income tax slab. This means the tax implication depends on your total income, making it important to consider this aspect when evaluating your returns.
Profits under Overnight Funds are treated as income from other sources and are taxed according to your applicable income tax slab rates. If you fall into a higher tax bracket, your earnings from these funds will be taxed at a higher rate. If the investment is held for more than three years, an LTCG of 20% is applicable.
To choose the best Overnight Fund, consider factors such as the fund's historical performance, the reputation of the fund house, and the expense ratio. Given that returns on these funds are typically very close across the board, a lower expense ratio can lead to slightly better net returns. Additionally, consider the ease of transactions and customer service of the platform or fund house.
No, you don't need a demat account to invest in Overnight Funds. You can invest through mutual fund investment platforms, AMC websites, or financial advisors directly. These funds offer simplicity and convenience, making them accessible even without a demat account, which is more commonly used for holding shares and securities.
Considering the nature of Overnight Funds, the concept of SIP (Systematic Investment Plan) doesn't apply as it does in equity or long-duration debt funds. Investments in Overnight Funds are essentially lump sum by default, as each day's investment is treated independently, catering to those looking for a safe place to park funds for very short periods, often as an alternative to keeping money in a bank account.
To start an Overnight Fund SIP online, follow these 4 steps:
- Open Demat Account
- Choose the Overnight Fund you wish to invest in.
- Choose the SIP option, specifying the amount and SIP date
- Set up an auto-pay via bank account to automate the SIP payments
Yes, you can redeem your investment in Overnight Funds at any time. These funds are designed for very short-term investments, providing high liquidity. Redemption requests are usually processed quickly, with the settlement often occurring the next working day, making these funds an excellent option for managing short-term liquidity needs.
No, there is no lock-in period for Overnight Funds, reflecting their purpose as a highly liquid, short-term investment vehicle. You can invest in these funds today and redeem your investment the very next day, making them a flexible option for parking surplus cash.
Overnight Funds carry the lowest risk among mutual fund categories due to their investment in securities with a one-day maturity. However, they are not entirely risk-free. They are subject to interest rate risk, although minimal, and operational risk related to the settlement of securities. The returns are also subject to changes in the repo rate or other short-term rates, but the overall risk is very low.
While Overnight Funds are considered among the safest investment options available, no investment can be deemed 100% safe. The risk in Overnight Funds is minimal, primarily due to their investment in very short-term, high-quality debt instruments. However, like any market-linked investment, they carry a small degree of inherent risk, albeit significantly lower compared to other fund types.
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