Bandhan Overnight Fund - Direct Plan
An open-ended Debt Scheme investing in overnight securities. A scheme with relatively low interest rate risk and relatively low credit risk.
What is an Overnight Fund?
Overnight funds offer a low-risk option for parking money temporarily, typically for just one day, while still earning interest.
Overnight mutual funds invest in securities with a 1-day maturity. At the start of each business day, the fund's assets are in cash, and bonds maturing overnight are purchased. These funds provide a low-risk way for investors to park idle funds for short periods and earn potential returns.
Due to their short investment horizon, overnight funds offer lower returns but are highly liquid with no entry or exit load, making them ideal for short-term investments and emergencies.
Overnight funds invest in highly liquid debt and money market instruments, making them a low-risk option. Their short horizon reduces vulnerability to market volatility, though they are not completely risk-free.
These funds are taxed like other debt funds. Units held for over three years incur LTCG at 20% with indexation, while those held for less than three years are taxed as STCG based on the investor’s income slab.
- Min Investment 1,000
- Min SIP Amount 100
- Exit Load
Nil
Scheme is suitable for building emergency corpus or for temporary parking of surplus (minimum recommended investment horizon 1 day)
Tier 1 Benchmark : Nifty 1D Rate IndexAlternate Benchmark : CRISIL 1 Year T-Bill Index
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Performance as on 31st October 2024
| Scheme Names | CAGR Returns (%) | Current value of Investment of 10,000 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 1 year | 3 year | 5 year | 10 year | 18/01/2019 Since inception | 1 year | 3 year | 5 year | 10 year | 18/01/2019 Since inception | |
| Bandhan Overnight Fund - Regular Plan - Growth | 6.65 | 5.74 | 4.75 | N.A. | 4.88 | 10,666 | 11,825 | 12,612 | N.A. | 13,178 |
| 6.77 | 5.90 | 4.92 | 5.70 | 5.05 | 10,679 | 11,881 | 12,718 | 17,419 | 13,299 | |
| 7.54 | 5.97 | 5.52 | 6.39 | 5.84 | 10,756 | 11,902 | 13,087 | 18,593 | 13,889 | |
| ^ Tier 1 Benchmark | ^^ Alternate Benchmark | ^^^ Tier 2 Benchmark | ||||||||||
This fund is managed by Mr. Brijesh Shah (w.e.f 01/02/2019)
View fund performance of other funds managed by Mr. Brijesh Shah
Past performance may or may not be sustained in future.
Regular and Direct Plans have different expense structure. Direct Plan shall have a lower expense ratio excluding distribution expenses, commission expenses etc.
Taxation:
For taxation, please refer the link : https://bit.ly/46xQzi1
Bandhan Overnight Fund
(Scheme Risk-o-meter)
Nifty 1D Rate Index
(Tier 1 Benchmark Risk-o-meter)
This product is suitable for investors who are seeking* :
- To generate short term optimal returns in line with overnight rates and high liquidity
- To invest in money market and debt instruments, with maturity of 1 day
Who Should Invest in Overnight Mutual Funds?
Overnight mutual funds are suitable for investors seeking highly liquid, short-term investments in debt and money market instruments with a 1-day maturity. They allow investors to access their funds whenever needed.
With a short investment horizon, overnight funds are classified as low-risk and are less exposed to market volatility, making them suitable for risk-averse investors.
Overnight funds can offer higher returns than a traditional savings account, making them a suitable option for parking idle funds.
These funds are taxed like debt funds and may not suit investors looking for tax-saving options.
FAQs on Overnight Funds
What is an overnight fund?
An overnight fund is a type of debt fund investment. The meaning of an overnight fund is that it primarily invests in debt and money market securities that mature in 1 day.
Is it safe to invest in overnight funds?
Overnight liquid funds may be a relatively safe investment option due to their short time horizon and investments in debt and money market securities. However, no mutual funds are completely safe. All mutual funds are subject to market risks.
Who should invest in overnight mutual funds?
Overnight mutual funds are a low-risk and short-term investment option. They may be suitable for risk-averse investors seeking short-term investments in debt and money market instruments. They may not be suitable for investors seeking wealth creation, tax-saving or long-term investments.
Are overnight funds liquid?
Yes, overnight funds are a liquid investment option. They invest in debt and money market instruments with a maturity of one day. Consequently, investors have access to their funds whenever required.
What are the advantages of overnight debt funds?
Overnight funds are a low-risk investment option and may benefit risk-averse investors. Moreover, they are suitable for the short term. Investors seeking to park their excess or idle funds for a short period of time may benefit from investing in overnight funds as they may offer potentially higher returns than savings accounts.
What are the disadvantages of overnight mutual funds?
Overnight funds returns are relatively lower than equity and other mutual funds. Investors seeking wealth creation may not benefit from overnight mutual funds. Overnight funds are not taxed favourably and are subject to STCG and LTCG tax. This may be a disadvantage for investors seeking tax-saving investments.