Money Market Fund — Mutual Fund Term Explained

A debt fund investing in money market instruments with maturity up to 1 year. Slightly higher yield than liquid funds.

Money market funds invest in instruments with maturity up to 1 year — a step up from liquid funds (91 days). They offer marginally higher yields for slightly more interest rate exposure. Suitable for 3-6 month horizons.

Related terms

• Liquid Fund — A debt fund investing in money market instruments with maturity up to 91 days. Very low risk, T+1 redemption, returns better than savings accounts.
• Overnight Fund — The safest debt fund — invests only in overnight (1-day maturity) instruments. Virtually no risk. Returns slightly lower than liquid funds.
• Debt Fund — A mutual fund investing in fixed income securities — bonds, G-Secs, commercial paper. Lower risk than equity but also lower returns.

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