Do not keep money in bank account! These 3 low -risk funds will get better and safe returns than FD

Do you too have a lot of money lying in your bank’s savings account? If yes, then you are inadvertently reducing the price of your hard earned money every day. A slight interest of 2-3% available in a savings account, does not last anywhere in front of a inflation rate of 6-7%, which means that your money is decreasing rather than increasing.

Then what is the solution? Fixed Deposit (FD)? This is a safe option, but often its return is also able to beat inflation hardly. In such a situation, intelligent investors seek those options that Also be safe, provide facilities to withdraw money easily if needed, and better returns than FD Also earn.

This is the most spectacular solution to this dilemma Short-Term, Low-Risk Mutual FundsThese are the date funds whose sole purpose is to earn a stable and respectable return on it while keeping your money safe. Let us know in detail about such top 3 types of funds for investment in 2025.

First of all, understand: What are these low -risk funds?

These equity do not invest money in the stock market like mutual funds, so there is no risk of market fluctuations. These funds ‘lend’ your money for a short term to the government, big banks and top-rated corporate companies and earns interest on it. You get a part of this earning as a return. Because this loan is given to very safe institutions, the risk in them is almost negligible.

Top 3 low risk funds for short-term investment

According to your investment goal and time period, you can choose the most suitable funds for yourself:

1. Liquid Funds

• The best for whom: For those who Emergency fund Want to keep or from a few days 3 months To park your money for. This is the best and smarter option of savings account.
• Where does money feel?: These funds invest money in government securities and commercial papers with maturity less than 91 days, which are considered extremely safe.
• Estimation of Return: Their return can usually be equal to FD or slightly more (from 6% to 7.5%).
• Liquidity (facility to withdraw money): You can withdraw your money in T+1 day (today request request, in the account of money tomorrow). Some funds also offer the facility of ‘instant redemption’, so that you can withdraw money immediately to a extent.
• Note: If you withdraw money before 7 days, then a minor ‘exit load’ may seem.

2. Ultra Short Duration Funds

• The best for whom: For those investors whose goal 3 to 6 months Is of Suppose, after 4 months you have to go to a vacation or make a down payment of the car, then you can keep your money here.
• Where does money feel?: These funds invest in date instruments with a duration of 3 to 6 months.
• Estimation of Return: These take a little higher risk than liquid funds, so the hope of returns in them is also slightly higher (usually between 7% to 8%).
• Liquidity: There is no exit load on withdrawing money, but the fluctuations of interest rates may have a slight impact than liquid funds.

3. Short Duration Funds

• The best for whom: When your investment goal 1 year to 3 years If there is a great option, then this fund is a great option.
• Where does money feel?: These funds invest money in security with maturity of 1 to 3 years, which makes them a little more sensitive to the change of interest rates.
• Estimation of Return: The ability to give the most returns among these three is in this category, which can beat FD with a good margin.
• Advice: Invest in these only when you are ready to give up your money for at least 1 year, so that you have no effect of small fluctuations of interest rates.

Keep these things in mind before investing

1. Expense ratio: Always choose funds with low expans ratio. This would be the annual fees to manage the fund.
2. Credit Quality: See which companies the funds have invested. Always prioritize funds that Aaa Or Sovereign Like high-quality security.
3. Taxation: Remember, the benefits from date funds (whether short-term or long-term) are added to your total income and your Income tax slab According to it is taxed.

Do not let it decrease by keeping money in the bank. Choose the right fund according to your need and goal and really put your hard -earned money on ‘work’ for yourself!

(Disclaimer: Investment in mutual funds is subject to market risks. This article should not only be considered any type of investment advice for informative purpose. Please consult your financial advisor before investing.)