Overnight funds offer a quick and safe way to grow your extra cash while ensuring liquidity and better returns. Image credit: BAJAJFINSERV
Imagine you’ve got some extra cash, perhaps from a recent payment or just a temporary surplus, and you’re thinking about how to make it grow without taking much risk. The typical option would be a savings account, but there’s a smarter, more rewarding way: Overnight funds.
An overnight fund is a type of mutual fund that invests in securities maturing in just one day. At the end of each day, the fund reinvests the money into new one-day securities, giving you a safe, liquid place to park your money while earning better returns than your usual savings account.
A Surprising Boost: Short-Term, Big Gains
Most savings accounts offer an interest rate between 2–5%, which seems fine for short-term savings. But what if you could earn 6.5 – 7% (may vary from time to time) on that money without locking it away for long periods or taking much risk? That’s where overnight funds come in.
Here are some top-performing overnight funds that can give you that extra edge:
Axis Overnight Fund Direct Growth
DSP Overnight Fund
Quant Overnight Fund Direct Growth
PGIM India Overnight Fund Direct Growth
ICICI Prudential Overnight Fund Direct Growth
Bank of India Overnight Fund Direct Growth
Nippon India Overnight Fund
Navi Overnight Fund Direct Growth
SBI Overnight Fund Direct Growth
Bajaj Finserv Overnight Fund Direct Growth
Mirae Asset Overnight Fund Direct Growth
These funds offer returns comparable to higher-risk investments but with the safety and liquidity of a savings account. It’s like discovering that your short overnight stay could give you the benefits of a luxury vacation!
Learn From Your Story
Think of yourself as someone running a small business, regularly receiving customer payments. You don’t need the cash right away, but you also want quick access just in case. Instead of leaving that money idle in a bank account, you choose to invest it in an overnight fund.
Each night, the fund puts your money to work, earning better returns than a savings account, while ensuring it’s available in the morning if you need it. Over time, these small nightly earnings compound into something more substantial—without locking away your funds for months or years.
Why Choose an Overnight Fund?
1. Safety: These funds invest in secure, high-quality securities that mature daily, keeping risk low.
2. Liquidity: Your money is available almost instantly, giving you flexibility for when you need it.
3. LowRisk: With the investment horizon being just one day, the impact of market changes or interest rate fluctuations is minimal.
4. Better Returns: Earning 6.5–7%, as seen with funds like Axis Overnight Fund Direct Growth and Navi Overnight Fund Direct-Growth, can significantly outperform a regular savings account.
Overnight Funds: The Choice Is Yours!
Overnight funds might just be one of the best-kept secrets in short-term investing. They allow you to grow your idle cash safely while keeping it accessible. Whether you’re parking money for a few days or weeks, these funds offer a surprise boost in returns, turning your short-term investments into something much more rewarding. It’s like letting your money rest for a night and grow a little while you sleep!
