How much returns do safer debt fund categories deliver?

Introducing short-term debt fund categories

Debt funds that invest in securities maturing within a year are safer than other debt funds.

There are 5 short-term debt funds

The relatively risk-free short debt funds are: 1) Overnight funds, 2) Liquid funds, 3) Ultra short-duration funds, 4) Low-duration debt funds and 5) Money market debt funds.

Let’s look at their performance

Their yield to maturity (YTM) is in a narrow range at the moment. That’s because interest rates haven’t undergone any change in a while.

5. Overnight fund

Yield to maturity: 6.7%

4. Liquid fund

Yield to maturity: 7.4%

3. Ultra short-duration debt fund

Yield to maturity: 7.8%

2. Low-duration debt fund

Yield to maturity: 7.9%

1. Money market debt fund

Yield to maturity: 7.7%

Important note

YTM as of February 29, 2024. Debt fund categories as per Value Research classification.

Thanks for Reading!