Understanding Short Duration Funds
Short-duration funds invest in money market instruments with a maturity of 1-3 years. These funds are ideal for investors aiming for moderate returns with relatively lower risk. These are long-term securities that mature in 8-10 years
A great alternative to traditional instruments like a savings account or FD.
Low risk of interest rate fluctuations with shorter maturity.
Ideal for investors who want money in 1-3 years.
Top schemes of Short Term Mutual Funds
| Fund Name | Returns | Actions | ||
|---|---|---|---|---|
| 1 Year | 3 Year | 5 Year | ||
Returns calculator
Total Invested : ₹ 6,00,000
Profit : ₹ 56,200,000
Current value : ₹ 1,16,20,000
Frequently Asked Questions
Which is the best short-duration fund?
Consider these factors before choosing a short-duration fund.
Average maturity
Yeild to maturity
Track record
Expense ratio
What is the difference between liquid funds and short-duration funds?
The two funds differ in maturity. Liquid funds invest in securities with up to 91 days' maturity, while short-duration funds invest in securities with up to 1-3 years of maturity.
What are the risks of short-duration funds?
While the short-duration funds have a shorter maturity, they come with the following risks:
Credit risk
Inflation risk
High taxation
Why invest in a short-duration fund?
These funds are suitable for short-term investment (1-3 years).
Low interest rate risk with short maturity.
Potential for stable returns.
What is the tenure of a short-duration fund?
Short-duration funds invest in securities that mature in 1-3 years.
What are the benefits of investing in short-duration funds?
Investment in short-duration funds offers:
Potential for higher returns than traditional instruments
Lower interest rate risk
Diversification
Who should invest in a short-duration fund?
Someone who is:
Investor with a 1-3 year horizon.
A conservative investor seeking stability.
Seeking diversification.
Should you invest in a short-duration fund?
You can invest in a short-duration fund if you want to invest for a short term (1-3 years) and don't want a higher risk.