Invest in Best Ultra Short Term Mutual Funds in India for 2025
Explore the list of top-performing ultra short term mutual funds schemes curated by our experts
Best Ultra Short Term Mutual Funds
Ultra Short Term Mutual Funds are debt-oriented investment schemes that strategically park funds in short-term money markets and debt instruments with maturity periods between 3 to 6 months. These ultra short duration funds offer investors a balanced approach to generating returns while maintaining low to moderate risk profiles.
You would have got
Total Investment
₹ 1200
Expected Returns
₹ 38
Total Value
₹ 1238
Past performance doesn’t assure future results; actual outcome may vary due to market dynamics.
Your Investment Amount
- 1
- 2
- 3
- 4
- 5
per annum
Understanding Ultra Short Term Funds
How do Ultra Short Term Funds Work?
Ultra Short Term Mutual Funds, also known as Ultra Short Duration Funds, pool money from investors to invest in a diversified portfolio of short-term debt instruments. Fund managers carefully analyse market trends, credit ratings, and economic factors to select securities with the potential for stable returns and minimal risk.
These funds typically invest in:
- Commercial papers
- Certificate of deposits
- Treasury bills
- Short-term corporate bonds
- Government securities
Ultra Short Term Funds FAQs
Ultra Short Term Funds, also known as Ultra Short Duration Funds, are debt mutual funds that invest in short-term money market and debt instruments with maturity periods between 3 to 6 months. They offer a balance between liquidity, returns, and low risk.
These funds are generally considered low-risk compared to equity funds. They invest in high-quality, short-term debt instruments, providing a relatively stable investment option for conservative investors.
Historically, Ultra Short Duration Funds have offered returns ranging from 6-7% annually. However, actual returns can vary based on market conditions, fund management, and economic factors.
The ideal investment horizon is typically 3 to 12 months. This allows you to benefit from potential returns while maintaining high liquidity.
Most Ultra Short Term Mutual Funds allow investments starting from ₹ 500 to @rs 1,000, making them accessible to a wide range of investors.
Yes, these funds offer high liquidity. However, check the specific fund's exit load and redemption terms to understand any potential charges.
Taxation depends on the investment duration:
- Short-term investments (less than 3 years) are taxed as per your income tax slab.
- Long-term investments (over 3 years) may benefit from indexation.
Ultra Short Duration Funds are ideal for:
- Individuals with surplus short-term funds
- Conservative investors
- Those seeking better returns than savings accounts
- Investors looking for high liquidity
Ultra Short Term Funds typically have a slightly longer maturity period and potentially higher returns compared to Liquid Funds, with marginally higher risk.
To invest in Ultra Short Term Mutual Funds you must:
- Complete KYC formalities
- Choose a fund based on performance and goals
- Decide between a lump sum or SIP investment
- Invest through a mutual fund platform or distributor such as Choice
Choice offers a curated selection of Ultra Short Duration Funds, backed by expert research and user-friendly investment platforms. Comprehensive analysis by our expert helps investors make informed decisions.
Explore More Mutual Funds Options
Diversify your portfolio with our collection of high-performing mutual funds across various categories. Compare, choose, and invest in India's top-rated funds to meet your financial goals.
.png)
