Ask Value Research

Short-Term Cash

Opt for short-term debt plans for better realisation and tax efficiency

I have a small trading business, wherein I face the challenge of retaining large cash for short durations of a week to a month. Can you suggest any mutual funds wherein I can park this with low risk?
- Harpreet Singh

There are funds that serve your purpose. Short- and Ultra-short term debt plans are for you. The principal objective of a cash fund is to preserve principal while at the same time provide high liquidity. Returns are a secondary objective. They are suitable investment avenues for parking short-term money for less than a month or two. However, these funds are not risk-free.

This article was originally published on December 21, 2010.

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