savings vs overnight fund

#1
Hi,

I hear a lot about overnight mutual funds. Suppose we park a amount of 10 lakhs in savings bank account for 3 months, that offers a interest of 3.25%. Can someone please advise if we could get more returns from overnight mutual fund.

Thanks in advance.
AH.
 
#4
Hi,

I hear a lot about overnight mutual funds. Suppose we park a amount of 10 lakhs in savings bank account for 3 months, that offers a interest of 3.25%. Can someone please advise if we could get more returns from overnight mutual fund.

Thanks in advance.
AH.
Savings bank account gives 3.25 pa ie for the entire year so on 3 months holding they will earn 0.8125 %.Overnight funds give around 5% per year so on 3 months holding they will earn 1.25 % and the risk is very low .
 

TracerBullet

Well-Known Member
#5
Rates depend on market too. So recently yields had crashed and i was getting something around 3% in overnight since covid.
Ex - HDFC overnight has yield listed at 3.21 in Value research which is similar to its 1 month return. Even liquid do not have 5% now i think.

Overnight funds can have safe collateral so risk is much lower and holding period is only 1 day. I prefer to have a few debt funds vs all in bank to avoid risk of getting bank account hacked.
Maybe that risk is also very low but just better for mind for me.
 

Similar threads

Zerodha – Open Paperless Account

Open online account with Zerodha. Free delivery trading and Max Rs 20 for Intraday, F&O, Currency and Commodity Trading. Intraday High leverage with MIS, CO and BO.

Name:Phone:
Email:City:
State:
Are you a day trader?