Best Money Market Mutual Funds
Money Market Mutual Funds invest in short-term securities such as treasury bills, deposit cards, etc. instead of investing in stocks and bonds that last more than six months. Money market mutual funds only quote an average yield of seven days compared to other investments that provide an annual percentage rate (APR).
It is always essential to have a certain quantity of money in liquid cash while investing to ensure that when you see a good investment, you have money at your disposal. Investing in a best money market fund will allow the liquidity of your money but still, make more than if you put it in a savings account.
List of Top Money Market Mutual Funds
- Large Cap
- Mid Cap
- Multi Cap
|Mutual Fund Scheme||Crisil Rank||Aum (₹)||1M||3M||6M||1Y||2Y||3Y||5Y|
1. Franklin India Savings Fund (G)
Franklin India Savings Fund is a Debt - Money Market fund was launched on 11 Feb 02. It is a fund with Moderately Low risk and has given a CAGR/Annualized return of 7.5% since its launch. Ranked 1 in top Money Market fund category. Return for 2018 was 7.5%, 2017 was 7.2% and 2016 was 8.1%.
2. L&T Money Market Fund-Reg (G)
L&T Money Market Fund is a Debt - Money Market fund was launched on 10 Aug 05. It is a fund with Moderate risk and has given a CAGR/Annualized return of 7.8% since its launch. Ranked 2 in top Money Market fund category. Return for 2018 was 7.3%, 2017 was 7.5% and 2016 was 9.1%.
3. Tata Money Market Fund - Regular (G)
Tata Money Market Fund is a Debt - Money Market fund was launched on 22 May 03. It is a fund with Low risk and has given a CAGR/Annualized return of 7% since its launch. Ranked 3 in best Money Market fund category. Return for 2018 was -0.1%, 2017 was 6.7% and 2016 was 7.6%.
4. HDFC Money Market Fund - Direct (G)
HDFC Money Market Fund is a Debt - Money Market fund launched on 18 Nov 1999. It is a fund with Moderately Low risk and has given a CAGR/Annualized return of 7.52% since its launch. Ranked 4 in best Money Market fund category. Return for 2018 was 7.41%, 2017 was 6.45% and 2016 was 7.48%.
5. Aditya Birla SL Money Manager Fund (G)
Aditya Birla Sun Life Money Manager Fund is a Debt - Money Market fund was launched on 13 Oct 05. It is a fund with Low risk and has given a CAGR/Annualized return of 7.1% since its launch. Ranked 5 in best Money Market funds. Return for 2018 was 7.9%, 2017 was 6.8% and 2016 was 7.7%.
Money Market Mutual Funds FAQs
+What is Money Market Mutual Funds?
It is an open ended debt scheme investing in money market instruments having maturity upto 1 year.
Invests in a combination of certificates of deposits, treasury bills and other money market instruments. They are managed by expert fund managers who actively try to manage the portfolio based on interest rate movements, while at the same time keeping the portfolio credit worthy.
+Who should invest in Money Market Funds?
Money Market funds are ideal for investors who want regular income, but are risk-averse. These are less volatile and, hence, are less risky than equity funds. If you have been saving in traditional fixed income products like Term Deposits, and looking for steady returns with low volatility, these funds could be a better option, as they help you achieve your financial goals in a more tax efficient manner and therefore earn better returns.
+How Money Market Funds are different from other Mutual Fund schemes?
In terms of operation, these funds are not entirely different from other mutual fund schemes. However, in terms of safety, they score higher than equity mutual funds. For instance, when the market falls, the NAVs of your equity funds fall sharply, whereas in case of these funds, the fall is not as sharp. Having said that, these funds can offer only moderate returns, while equity funds, which are highly risky, offer high returns over longer time horizon.
+What is the tax implication on Money Market Mutual Funds?
Money market funds are debt oriented funds. If the investment holding period is more than 3 years, it is considered as long term investment and if investment holding period is less than 3 years , it is considered as sort term investment.
Long-term capital gains on debt fund are taxable at the rate of 20% after indexation. Indexation is a method which involves factoring the rise in inflation from the time of purchase to sale of the units.
Long-term capital gains on debt fund are taxable as per the income tax individual slab rates.