Best Ultra Short Term Mutual Funds

As per SEBI guidelines Ultra short term mutual funds are debt funds that primarily invest in liquid fixed income generating instruments for periods up to a maximum of 6 months. These funds invest in instruments such as treasury bills, corporate bonds, government bonds, etc., offering better returns than a regular savings bank account and a high degree of liquidity. The risks are often mitigated primarily due to the shorter time period of the funds, thereby keeping risk to a minimum compared to liquid funds.

To conclude, Ultra short term funds provide reasonable returns with sufficient liquidity. The low maturities make the fund less sensitive to interest rate movements in the market. The fund has the potential to offer higher growth than other long maturity debt funds during a rising interest rate regime.