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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. These debt funds invest in instruments such as corporate bonds, government securities, and money market instruments, while maintaining a Macaulay duration of one to three years. As of September 2026, the category’s average 3-year return was around 7%. In this article, we cover the short-term mutual funds available in India, along with an overview of some of the top funds in the category.

Best Short Term Mutual Funds in India 2026

Short Term Mutual Funds in India

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

Created by

@82600328260032

Showing 1 - 20 of 28 results

last updated at 8:00 AM IST 
NameMFs (28)↓↓Sub CategorySub Category↓↓PlanPlan↓↓AUMAUM↓↓CAGR 3YCAGR 3Y↓↓Base Exp. RatioBase Exp. Ratio↓↓NAVNAV↓↓Exit LoadExit Load↓↓CAGR 5YCAGR 5Y↓↓AlphaAlpha↓↓VolatilityVolatility↓↓Tracking ErrorTracking Error↓↓Absolute Returns - 6MAbsolute Ret. - 6M↓↓Absolute Returns - 3MAbsolute Ret. - 3M↓
1.Bandhan Short Term Fund
Bandhan Short Term Fund
Short Term
Short Term
Growth
Growth
8,680.22
8,680.22
7.65
7.65
0.31
0.31
65.87
65.87
-
-
6.45
6.45
0.83
0.83
1.12
1.12
2.87
2.87
2.86
2.86
0.77
0.77
2.Groww Short Term Fund
Groww Short Term Fund
Short Term
Short Term
Growth
Growth
93.33
93.33
7.40
7.40
0.25
0.25
2,563.61
2,563.61
-
-
6.14
6.14
0.28
0.28
1.04
1.04
1.03
1.03
2.80
2.80
0.84
0.84
3.Baroda BNP Paribas Short Term Fund
Baroda BNP Paribas Short Term Fund
Short Term
Short Term
Growth
Growth
430.51
430.51
7.28
7.28
0.37
0.37
33.93
33.93
-
-
6.45
6.45
0.15
0.15
1.09
1.09
1.08
1.08
2.47
2.47
0.69
0.69
4.TRUSTMF Short Term Fund
TRUSTMF Short Term Fund
Short Term
Short Term
Growth
Growth
65.66
65.66
6.99
6.99
0.20
0.20
1,362.85
1,362.85
-
-
6.15
6.15
0.40
0.40
1.06
1.06
3.03
3.03
2.43
2.43
0.84
0.84
5.LIC MF Short Term Fund
LIC MF Short Term Fund
Short Term
Short Term
Growth
Growth
121.62
121.62
7.31
7.31
0.30
0.30
16.63
16.63
-
-
6.21
6.21
0.55
0.55
1.32
1.32
2.81
2.81
2.40
2.40
0.36
0.36
6.Axis Short Term Fund
Axis Short Term Fund
Short Term
Short Term
Growth
Growth
7,424.52
7,424.52
7.59
7.59
0.32
0.32
36.22
36.22
-
-
6.68
6.68
0.47
0.47
1.18
1.18
2.69
2.69
2.38
2.38
0.45
0.45
7.Sundaram Short Term Fund
Sundaram Short Term Fund
Short Term
Short Term
Growth
Growth
176.09
176.09
7.28
7.28
0.24
0.24
51.23
51.23
-
-
6.51
6.51
0.48
0.48
0.99
0.99
2.93
2.93
2.30
2.30
0.54
0.54
8.JioBlackRock Short Term Fund
JioBlackRock Short Term Fund
Short Term
Short Term
Growth
Growth
112.31
112.31
-
-
0.27
0.27
1,037.59
1,037.59
-
-
-
-
0.45
0.45
1.03
1.03
1.88
1.88
2.27
2.27
0.55
0.55
9.Mahindra Manulife Short Term Fund
Mahindra Manulife Short Term Fund
Short Term
Short Term
Growth
Growth
78.65
78.65
7.48
7.48
0.27
0.27
14.23
14.23
-
-
6.49
6.49
0.23
0.23
1.20
1.20
1.19
1.19
2.22
2.22
0.09
0.09
10.Aditya Birla SL Short Term Fund
Aditya Birla SL Short Term Fund
Short Term
Short Term
Growth
Growth
5,966.14
5,966.14
7.42
7.42
0.30
0.30
55.08
55.08
-
-
6.72
6.72
0.48
0.48
1.22
1.22
2.95
2.95
2.21
2.21
0.20
0.20
11.Nippon India Short Term Fund
Nippon India Short Term Fund
Short Term
Short Term
Growth
Growth
6,363.76
6,363.76
7.43
7.43
0.33
0.33
61.35
61.35
-
-
6.55
6.55
0.46
0.46
1.26
1.26
2.87
2.87
2.19
2.19
0.22
0.22
12.HSBC Short Term Fund
HSBC Short Term Fund
Short Term
Short Term
Growth
Growth
3,880.69
3,880.69
7.08
7.08
0.27
0.27
29.89
29.89
-
-
6.05
6.05
0.38
0.38
1.18
1.18
2.85
2.85
2.17
2.17
0.26
0.26
13.Bank of India Short Term Fund
Bank of India Short Term Fund
Short Term
Short Term
Growth
Growth
259.23
259.23
7.46
7.46
0.45
0.45
30.97
30.97
-
-
10.71
10.71
0.45
0.45
1.14
1.14
2.70
2.70
2.16
2.16
0.30
0.30
14.JM Short Term Fund
JM Short Term Fund
Short Term
Short Term
Growth
Growth
81.56
81.56
6.96
6.96
0.33
0.33
13.12
13.12
-
-
-
-
0.05
0.05
1.10
1.10
1.11
1.11
2.15
2.15
0.50
0.50
15.Canara Rob Short Term Fund
Canara Rob Short Term Fund
Short Term
Short Term
Growth
Growth
276.14
276.14
6.83
6.83
0.31
0.31
29.53
29.53
-
-
5.96
5.96
0.33
0.33
0.86
0.86
3.03
3.03
2.14
2.14
0.48
0.48
16.ICICI Pru Short Term Fund
ICICI Pru Short Term Fund
Short Term
Short Term
Growth
Growth
18,889.78
18,889.78
7.48
7.48
0.38
0.38
70.45
70.45
-
-
6.96
6.96
0.69
0.69
1.23
1.23
2.79
2.79
2.14
2.14
0.21
0.21
17.DSP Short Term Fund
DSP Short Term Fund
Short Term
Short Term
Growth
Growth
3,415.77
3,415.77
7.00
7.00
0.30
0.30
53.80
53.80
-
-
6.14
6.14
0.43
0.43
1.33
1.33
2.64
2.64
2.11
2.11
0.12
0.12
18.Kotak Short Term Fund
Kotak Short Term Fund
Short Term
Short Term
Growth
Growth
14,241.27
14,241.27
7.24
7.24
0.33
0.33
61.18
61.18
-
-
6.32
6.32
0.38
0.38
1.15
1.15
2.94
2.94
2.10
2.10
0.30
0.30
19.Union Short Term Fund
Union Short Term Fund
Short Term
Short Term
Growth
Growth
112.31
112.31
-
-
0.28
0.28
11.04
11.04
-
-
-
-
0.26
0.26
1.24
1.24
2.81
2.81
2.08
2.08
0.25
0.25
20.UTI Short Term Fund
UTI Short Term Fund
Short Term
Short Term
Growth
Growth
1,769.64
1,769.64
7.08
7.08
0.34
0.34
35.93
35.93
-
-
6.40
6.40
0.36
0.36
1.15
1.15
2.84
2.84
2.07
2.07
0.17
0.17
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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?

Bandhan Short Term Fund

Bandhan Short Term Fund invests in debt and money market instruments while maintaining a Macaulay duration of 1 to 3 years. The portfolio is designed to generate income while managing interest-rate and credit risks associated with short-duration debt securities.

LIC MF Short Term Fund

LIC MF Short Term Fund invests across corporate debt, government securities and money market instruments while maintaining a Macaulay duration of 1 to 3 years. Its portfolio combines different fixed-income securities to generate income over a shorter investment horizon.

Groww Short Term Fund

Groww Short Term Fund invests primarily in debt and money market instruments with a Macaulay duration of 1 to 3 years. The fund focuses on generating short-term income while maintaining liquidity through a diversified fixed-income portfolio.

Axis Short Term Fund

Axis Short Term Fund invests in debt and money market instruments while keeping its Macaulay duration between 1 and 3 years. The fund aims to generate stable returns while maintaining liquidity through a diversified short-duration debt portfolio.

ICICI Pru Short Term Fund

ICICI Prudential Short Term Fund invests mainly in debt and money market securities with a Macaulay duration of 1 to 3 years. Its strategy includes corporate debt and government securities while actively managing portfolio duration and credit quality.

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 term mutual funds 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 30th September 2026, here are the top short term mutual funds based on their 3M returns are:

    1. TRUSTMF Short Term Fund
    2. Groww Short Term Fund
    3. Baroda BNP Paribas Short Term Fund
    4. Canara Rob Short Term Fund
    5. Sundaram Short Term Fund

    Disclaimer: Please note that the above list of short term mutual funds with high returns 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.