Overnight Funds are the debt funds that invest in the exchange board of India and in overnight securities. Investors who are interested in this type of investments can purchase the bonds for overnight and can get the maturity during the business days. In this type of debt fund investment scheme, the Asset Under Management or AUM is in the form of Cash amount during the beginning of the scheme. comparatively overnight investment schemes are feasible, and they offer the facility of investing money in a profitable manner to gain more profits. Overnight funds are best option for those who wants to invest their money for short-term periods. Also, these type of investments does not get affected with the change in interest rates it is the safest option for investing money. As the investment horizon is small the individual can invest their extra cash to gain maximum return profits. Also, these funds have comfortable features like liquidity, lower risk factor. profit of higher returns, safer options make kt more feasible for the investor to choose such investment scheme.

What are the Features of Overnight Funds?

Investment Horizon:

These schemes get matured just within one day, it offers the shortest investment horizon. So, the interested investor can use their extra money that is available by the end of the day in such open-ended investment schemes to earn profits.

Risk Factor:

Overnight funds have lower risk future also the maturity horizon is small, so one can look on to the risks and plan accordingly to invest in safer zone so could not face any risk.


Unlike the other funds, these funds offer high liquidity. Within 'NO' time an investor can get access to their money.


Both Long term capital gain tax and short-term capital gain tax are applicable on these open-ended debt mutual funds. If the holding horizon is less than 3 years, then the short-term tax and more than 3 years then the long-term capital gain tax is applicable. approximately 20% of tax is applied on the indexation and 10% rate implied when it is without indexation. (Terms Apply). Also, the tax on dividends earned is also applied.

List of India's Top Overnight Funds:

  • L&T Cash Fund
  • SBI Overnight Fund
  • HDFC Overnight Fund
  • UTI Overnight Fund
  • Mahindra Manlife Overnight Fund

What are the advantages of Overnight Funds?

  • Low risk
  • short investment period
  • No risk of market volatility
  • High liquidity

Bottom Line:

Individual who wants to invest their extra cash that has earned on the end of the day to gain more profits with less risks, as these funds are independent of the interest rate change with a short investment horizon. So those who look for such features the overnight funds are the best debt funds investment options.