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Short Term Mutual Funds Schemes: Performance, NAV & Returns 2026

Short-term mutual funds in India collectively manage over ₹1 lakh cr in assets, with average maturities ranging from one to three years. They invest in debt instruments such as treasury bills, corporate bonds, and government securities, and have historically delivered returns in the 6–8% range annually, compared to 3–4% on most savings accounts.

Best Short Term Mutual Funds in India 2026

Short Term Mutual Fund Screener

Here's the list of the top short-term mutual funds in India (2025).

Created by

@82600328260032

Showing 1 - 20 of 53 results

last updated at 8:00 AM IST 
NameMFs (53)↓↓Sub CategorySub Category↓↓PlanPlan↓↓AUMAUM↓↓Absolute Returns - 3MAbsolute Ret. - 3M↓↓Absolute Returns - 1YAbsolute Ret. - 1Y↓↓CAGR 3YCAGR 3Y↓↓Expense RatioExpense Ratio↓↓VolatilityVolatility↓↓NAVNAV↓↓Absolute Returns - 6MAbsolute Ret. - 6M↓
1.Tata Ultra Short Term Fund
Tata Ultra Short Term Fund
Ultra Short Duration Fund
Ultra Short Duration Fund
Growth
Growth
6,494.54
6,494.54
2.07
2.07
7.13
7.13
7.57
7.57
0.33
0.33
0.43
0.43
16.17
16.17
3.93
3.93
2.LIC MF Ultra Short Term Fund
LIC MF Ultra Short Term Fund
Ultra Short Duration Fund
Ultra Short Duration Fund
Growth
Growth
677.57
677.57
2.00
2.00
6.81
6.81
7.26
7.26
0.25
0.25
0.40
0.40
1,460.45
1,460.45
3.84
3.84
3.Nippon India Ultra Short Term Fund
Nippon India Ultra Short Term Fund
Ultra Short Duration Fund
Ultra Short Duration Fund
Growth
Growth
12,447.28
12,447.28
1.98
1.98
7.11
7.11
7.63
7.63
0.34
0.34
0.42
0.42
4,820.88
4,820.88
3.82
3.82
4.Invesco India Ultra Short Term Fund
Invesco India Ultra Short Term Fund
Ultra Short Duration Fund
Ultra Short Duration Fund
Growth
Growth
1,496.63
1,496.63
2.03
2.03
6.88
6.88
7.39
7.39
0.27
0.27
0.42
0.42
3,115.64
3,115.64
3.82
3.82
5.Mirae Asset Ultra Short-Term Fund
Mirae Asset Ultra Short-Term Fund
Ultra Short Duration Fund
Ultra Short Duration Fund
Growth
Growth
2,065.66
2,065.66
1.97
1.97
6.85
6.85
7.48
7.48
0.23
0.23
0.47
0.47
1,431.18
1,431.18
3.79
3.79
6.DSP Ultra Short Term Fund
DSP Ultra Short Term Fund
Ultra Short Duration Fund
Ultra Short Duration Fund
Growth
Growth
4,599.23
4,599.23
1.98
1.98
6.86
6.86
7.48
7.48
0.30
0.30
0.46
0.46
4,006.88
4,006.88
3.78
3.78
7.Mahindra Manulife Ultra Short Term Fund
Mahindra Manulife Ultra Short Term Fund
Ultra Short Duration Fund
Ultra Short Duration Fund
Growth
Growth
204.86
204.86
1.94
1.94
6.79
6.79
7.35
7.35
0.31
0.31
0.40
0.40
1,523.81
1,523.81
3.76
3.76
8.Baroda BNP Paribas Ultra Short Term Fund
Baroda BNP Paribas Ultra Short Term Fund
Ultra Short Duration Fund
Ultra Short Duration Fund
Growth
Growth
665.53
665.53
1.96
1.96
6.71
6.71
7.28
7.28
0.29
0.29
0.41
0.41
1,688.30
1,688.30
3.76
3.76
9.Bandhan Short Term Fund
Bandhan Short Term Fund
Short Duration Fund
Short Duration Fund
Growth
Growth
9,287.26
9,287.26
1.97
1.97
6.59
6.59
7.83
7.83
0.36
0.36
1.13
1.13
65.92
65.92
3.76
3.76
10.Axis Ultra Short Term Fund
Axis Ultra Short Term Fund
Ultra Short Duration Fund
Ultra Short Duration Fund
Growth
Growth
5,907.80
5,907.80
2.01
2.01
6.90
6.90
7.49
7.49
0.36
0.36
0.43
0.43
16.92
16.92
3.75
3.75
11.Canara Rob Ultra Short Term Fund
Canara Rob Ultra Short Term Fund
Ultra Short Duration Fund
Ultra Short Duration Fund
Growth
Growth
581.71
581.71
1.95
1.95
6.68
6.68
7.11
7.11
0.36
0.36
0.42
0.42
4,363.06
4,363.06
3.70
3.70
12.WOC Ultra Short Term Fund
WOC Ultra Short Term Fund
Ultra Short Duration Fund
Ultra Short Duration Fund
Growth
Growth
584.11
584.11
1.94
1.94
6.51
6.51
7.07
7.07
0.27
0.27
0.41
0.41
1,519.57
1,519.57
3.69
3.69
13.Bank of India Ultra Short Term Fund
Bank of India Ultra Short Term Fund
Ultra Short Duration Fund
Ultra Short Duration Fund
Growth
Growth
184.28
184.28
1.92
1.92
6.65
6.65
6.96
6.96
0.45
0.45
0.45
0.45
3,530.40
3,530.40
3.69
3.69
14.HSBC Ultra Short Term Fund
HSBC Ultra Short Term Fund
Ultra Short Duration Fund
Ultra Short Duration Fund
Growth
Growth
3,628.23
3,628.23
1.95
1.95
6.69
6.69
7.28
7.28
0.18
0.18
0.42
0.42
1,482.88
1,482.88
3.68
3.68
15.Sundaram Ultra Short Term Fund
Sundaram Ultra Short Term Fund
Ultra Short Duration Fund
Ultra Short Duration Fund
Growth
Growth
2,284.29
2,284.29
1.98
1.98
6.67
6.67
7.33
7.33
0.23
0.23
0.40
0.40
3,164.38
3,164.38
3.67
3.67
16.ICICI Pru Ultra Short Term Fund
ICICI Pru Ultra Short Term Fund
Ultra Short Duration Fund
Ultra Short Duration Fund
Growth
Growth
15,973.92
15,973.92
1.95
1.95
6.85
6.85
7.47
7.47
0.41
0.41
0.46
0.46
32.43
32.43
3.66
3.66
17.UTI Ultra Short Term Fund
UTI Ultra Short Term Fund
Ultra Short Duration Fund
Ultra Short Duration Fund
Growth
Growth
3,347.94
3,347.94
1.98
1.98
6.78
6.78
7.37
7.37
0.40
0.40
0.40
0.40
4,917.53
4,917.53
3.65
3.65
18.Bandhan Ultra Short Term Fund
Bandhan Ultra Short Term Fund
Ultra Short Duration Fund
Ultra Short Duration Fund
Growth
Growth
4,179.89
4,179.89
1.92
1.92
6.63
6.63
7.21
7.21
0.30
0.30
0.42
0.42
16.63
16.63
3.65
3.65
19.Aditya Birla SL Ultra Short Term Fund
Aditya Birla SL Ultra Short Term Fund
Ultra Short Duration Fund
Ultra Short Duration Fund
Growth
Growth
18,819.30
18,819.30
1.97
1.97
6.80
6.80
7.54
7.54
0.32
0.32
0.47
0.47
604.25
604.25
3.62
3.62
20.PGIM India Ultra Short Term Fund
PGIM India Ultra Short Term Fund
Ultra Short Duration Fund
Ultra Short Duration Fund
Growth
Growth
211.36
211.36
1.88
1.88
6.40
6.40
7.11
7.11
0.35
0.35
0.39
0.39
38.37
38.37
3.55
3.55
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Analyse Short Term Mutual Funds Further

Visit 'Short Term Mutual Funds' ScreenerScreener

Disclaimer: Please note that the above table is for informational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing. The data is derived from Tickertape Mutual Fund Screener and is subject to real-time updates.

Selection criteria: Absolute Ret. - 6M (%): Highest to Lowest, Plan: Growth, Category: Debt, Sub-category: Ultra Short Duration Fund & Short Duration Fund

What are Short Term Mutual Funds?

Short-term mutual funds are a type of debt mutual fund that invests money for a short period, usually between 1 and 3 years. They focus on low-risk, high-quality securities like government bonds, corporate bonds, and treasury bills. These funds mainly choose companies or institutions that have a good record of repaying loans on time and maintain steady cash flows.



How Do Short Duration Funds Work?

Short duration funds pool money from investors and invest it in short-term debt instruments like government securities, corporate bonds, and money market instruments. The fund manager selects and manages these short term investments to align with the fund’s objective and control risk.
These funds usually hold securities with a maturity of one to three years, making them less volatile than long-term or equity funds. Investors can buy or sell units at the fund’s Net Asset Value (NAV), which changes daily based on market movements.

Overview of the Top Short Term Mutual Funds

Tata Ultra Short Term Fund

Tata Ultra Short Term Fund invests mainly in short-term debt and money market instruments. The fund keeps its Macaulay duration between 3 and 6 months, which helps limit interest-rate sensitivity while maintaining liquidity.

LIC MF Ultra Short Term Fund

LIC MF Ultra Short Term Fund invests in debt and money market instruments with a Macaulay duration of 3 to 6 months. Its short maturity profile helps reduce the impact of interest-rate movements compared with longer-duration debt funds.

Nippon India Ultra Short Duration Fund

Nippon India Ultra Short Duration Fund invests in debt and money market instruments while maintaining a Macaulay duration of 3 to 6 months. The fund focuses on short-term income, liquidity and relatively lower duration risk.

Invesco India Ultra Short Term Fund

Invesco India Ultra Short Term Fund invests mainly in short-term debt and money market instruments. It maintains a Macaulay duration of 3 to 6 months, which keeps the portfolio focused on short maturities and limits interest-rate sensitivity.

DSP Ultra Short Term Fund

DSP Ultra Short Term Fund invests mainly in money market instruments, bonds and other short-term debt securities. The fund focuses on liquidity, credit quality and lower duration risk than longer-term debt funds.

How to Invest in Short Term Mutual Funds?

Here’s how you can identify and invest in top short term mutual funds with Tickertape Mutual Fund Screener -

  1. Launch Tickertape Mutual Fund Screener.
  2. Under the Category, select Debt and then Short Duration Funds
  3. Sort out the short and ultra-short-term mutual funds based on over 50 fundamental and technical filters.
  4. After identifying the short term mutual fund that aligns with your investment thesis, click on “Place Order” to invest in the mutual fund.

With Tickertape Mutual Fund Screener, you can invest via ‘lumpsum’ or start a ‘Short Term SIP’ in mutual funds. Moreover, by connecting your portfolio,you can do a deep analysis of your portfolio and assess its performance.

Taxation of Short Term Mutual Funds

Short-term mutual funds fall under the category of debt mutual funds, and their gains are taxed based on how long you hold the investment. The taxation rules apply differently for short-term and long-term capital gains, as shown below.

Capital Gains Tax Description
Short-Term Capital Gains (STCG) If you sell your debt fund units within three years (36 months), the tax will be as per your income tax slab.
Long-Term Capital Gains (LTCG) For debt funds held for over three years (36 months), the tax rate is now a flat 12.5% without indexation benefits.

Types of Short-Term Debt Mutual Funds

Liquid Funds

Liquid funds invest in short-term debt and money market instruments that mature within 1 to 91 days. They are designed for short-term parking of surplus funds and offer high liquidity with relatively low risk.

Ultra Short Duration Funds

These funds invest in debt instruments with a maturity of 3 to 6 months. They aim to provide slightly higher returns than liquid funds while keeping price fluctuations limited.

Low Duration Funds

Low duration funds invest in securities that mature between 6 months and 1 year. They carry moderate interest rate risk and generally provide steady income.

Money Market Funds

Money market funds invest in instruments such as treasury bills, commercial papers, and certificates of deposit, with maturities up to one year. They focus on capital preservation and liquidity.

Short Duration Funds

Short duration funds or short-term investment plans with high returns in India invest in government bonds, corporate bonds, and debentures with maturities of 1 to 3 years. They balance moderate risk with stable income potential.

Who Should Explore the Best Short-Term Funds in India?

Investors with Short-term Financial Goals

Short-term mutual funds are structured for time horizons of one to three years. They are commonly used to manage funds earmarked for upcoming expenses such as tuition payments, travel costs, or property-related payments.

Individuals with Surplus Cash

These funds are used to deploy idle money that would otherwise remain in low-yield accounts. Their structure allows for efficient short-term utilisation of surplus funds while maintaining accessibility and liquidity.

Conservative Investors

Short-term mutual funds cater to investors who prefer limited exposure to market volatility. By investing in high-quality debt instruments, these funds maintain stability while generating returns linked to short-term market movements.

Portfolio Diversifiers

Those who are already investing in equity instruments may consider exploring short-term funds to diversify their portfolios. These funds act as a debt component, helping mitigate overall risk and maintain liquidity.

Advantages of Investing in Short Term Mutual Funds

Lower Risk

Short term mutual funds invest in government securities, corporate bonds, and other high-quality debt instruments. These are generally safer than equity investments as they face less market volatility. However, they can still be affected by changes in interest rates or credit ratings.

High Liquidity

Investors can redeem their investments easily without a fixed lock-in period, and the money is usually credited within one working day. However, some of the best short term mutual funds for 1 year may charge a small exit load if withdrawn within a short time.

Professional Management:

Qualified fund managers track market trends, manage interest rate risks, and choose securities carefully. However, fund performance can still vary based on market factors and fund management strategies.

Risks of Investing in Short-Term Mutual Funds in India

Interest Rate Risk

The value of debt securities falls when interest rates rise. Since these funds invest in short-term bonds, they are less affected than long-duration funds but still face some impact from rate changes.

Credit Risk

These funds, including short duration debt funds, may invest in corporate bonds or securities issued by companies. If a company fails to repay its debt or delays payments, the fund’s value can decline.

Reinvestment Risk

When securities mature, the fund reinvests the proceeds. If prevailing interest rates are lower, new investments may generate lower yields and affect future returns.

Market and Economic Risk

Inflation, RBI policy changes, liquidity conditions and economic growth can influence bond yields and borrowing costs, which may affect the performance of short-term mutual funds.

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Factors to Consider Before Investing in Short-Term Mutual Funds

Investment Horizon

Short-term mutual funds are structured to hold securities with maturities of one to three years. Their performance can vary depending on how long the underlying instruments are held.

Interest Rate Movements

The value of bonds in a fund’s portfolio changes when interest rates move. Rising rates may reduce bond prices, while falling rates can increase them. This movement affects the fund’s net asset value (NAV).

Credit Quality of Portfolio

The fund’s portfolio includes securities with different credit ratings. Higher-rated securities indicate stronger repayment capacity, while lower-rated instruments may carry higher default risk.

Expense Ratio

The expense ratio represents the annual fee charged by the fund for management and operations. It directly impacts the overall returns generated by the fund.

Taxation

Gains from short term debt funds held for less than three years are taxed according to the investor’s income slab. Investments held for over three years are taxed at 12.5% without indexation.

Conclusion

Short-term mutual funds invest mainly in debt and money market instruments with relatively short maturities. While they may offer lower interest rate sensitivity than longer-duration debt funds, their performance can still be affected by interest rate movements, credit quality and broader economic conditions. Investors can use the Tickertape Mutual Fund Screener, which comes with more than 50 filters, to compare short-term mutual funds across returns, risk, portfolio composition, expense ratio and other key metrics before conducting further research.

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Frequently Asked Questions About Short Term Mutual Funds

  1. What are short-term mutual funds?

    Short-term mutual funds are debt funds that invest in fixed-income securities such as government bonds, corporate debt, and money market instruments with maturities between one and three years.

  2. What are the best short-term mutual funds in India?

    As of 28th August 2026, here are the top short term mutual funds based on their 5Y CAGR:

    1. Bank of India Short Term Fund
    2. UTI Short Term Fund
    3. ICICI Pru Short Term Fund
    4. UTI Ultra Short Term Fund
    5. Nippon India Ultra Short Term Fund

    Disclaimer: Please note that this is not a recommendation. Please do your own research or consult your financial advisor before investing.

  3. How can you invest in short-term mutual funds?

    Here’s how you can start investing in short term mutual funds:

    1. Launch the Tickertape Mutual Fund Screener.
    2. Select the short term mutual fund that matches your investment goals and risk appetite.
    3. Click on “Place Order” and choose the “SIP” or “Lumpsum” option. Enter your preferred amount and confirm “OK”.

    Your order will be placed

  4. Who should invest in short-term mutual funds?

    Investors who want to invest their money for a short period may explore short-term mutual funds. However, investors must understand the associated risks, such as interest rate or credit risk, do thorough research, and consult a financial advisor before making any investment decisions.

  5. What are the potential risks of investing in short-term mutual funds?

    Short-term mutual funds face risks such as interest rate changes, credit defaults, and reinvestment challenges. These factors can affect fund performance and returns over time.

  6. Can I invest in short-term mutual funds through short term SIPs?

    Investors can start a Systematic Investment Plan (SIP) in short-term mutual funds where the option is available. Short tern SIPs allow regular, smaller investments over time instead of a one-time lump sum.

  7. Where do short term funds invest?

    Short-term mutual funds primarily invest in fixed-income securities like treasury bills, commercial papers, certificates of deposit, and short-duration corporate bonds. These instruments typically have maturities ranging from a few months to 3 years, aiming to offer stable returns with lower interest rate risk.

  8. How to find short term SIP options for 6 months?

    Investors looking for a short term SIP for 6 months can compare mutual funds based on investment horizon, volatility, expense ratio, portfolio quality and past performance. The Tickertape Mutual Fund Screener, with more than 50 filters, can help shortlist funds and compare them across these metrics before further research.

Disclaimer: This article is for informational purposes only. The content of the article including securities/investment products mentioned if any, should not in any manner be construed as an investment advice, recommendation, offer, solicitation to buy/hold/sell any securities/investment products. The securities quoted if any, are for illustration only and are not recommendatory. Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Please consult a SEBI-registered financial advisor before investing.