Are you looking for a safe investment instrument to park your surplus cash while earning better returns than a regular savings account? Money market mutual funds might be the right choice for you in these conditions. These funds invest in highly liquid and short-term instruments with a maturity period of up to one year.
For conservative investors, these funds serve as a low-risk option. Interestingly, some of these funds delivered returns of over 7.5% in the last year. Thus, they are increasingly emerging as an attractive option for those who wish to grow their money without taking on significant risk.
In this article, we are going to explore five money market schemes that have outperformed others.
Who Should Invest in Money Market Funds?
If you are a conservative with your mutual fund investment, money market funds are ideal for you. These funds prioritize capital preservation and liquidity. So, in case you wish to park your surplus cash or emergency fund temporarily, money market funds are for you.
Compared to traditional savings accounts, you will earn a higher rate of interest at a relatively low risk. This makes them a popular choice for both individual and institutional investors.
Best Money Market Funds to Invest In 2024
Here’s the list of the top five money market mutual funds that delivered more than 7.5% returns in the past year. (all data as on 3rd September 2024)
Aditya Birla Sun Life Money Manager Fund
- 1-year return: 7.61%
- AUM: INR 25429 crore
- NAV: INR 351.7153
- Expense Ratio: 0.35%
The Aditya Birla Sun Life Money Manager Fund has an impressive track record. It is managed by one of the leading asset management companies in India. The fund maintains a balance between safety and returns while ensuring liquidity. It diversifies its investments across various money market instruments. Thus, investors benefit from a stable and steady income.
ICICI Prudential Money Market Fund
- 1-year return: 7.61%
- AUM: INR 27156 crore
- NAV: INR 360.3625
- Expense Ratio: 0.35%
ICICI Prudential Money Market Fund is another top performer in this category. This fund takes a disciplined approach to managing liquidity while maximizing returns. It primarily invests in a mix of CDs, GOI, treasury bills, and CP. This minimizes risk while providing consistent returns. It is ideal for investors looking to park their funds for the short term at interest rates higher than FDs and savings accounts.
Nippon India Money Market Fund
- 1-year return: 7.59%
- AUM: INR 18404 crore
- NAV: INR 3943.4082
- Expense Ratio: 0.38%
This fund has delivered impressive returns over the past year. Thus, conservative investors find it to be a great choice. It invests most of its assets in CDs and CPs while distributing the rest among GOI and treasury bills. This low-risk profile makes it a good choice for those looking for a stable investment vehicle.
Tata Money Market Fund
- 1-year return: 7.59%
- AUM: INR 27172 crore
- NAV: INR 4508.8989
- Expense Ratio: 0.4%
The Tata Money Market Fund ranks in the fourth position, delivering consistent returns while maintaining its conservative approach to investment. It is known for its investment strategies and focus on protecting investors. Primarily, it invests in high-quality debt and money market instruments. Thus, investors find a safe and liquid option while enjoying competitive returns.
UTI Money Market Fund
- 1-year return: INR 2927.8853
- AUM: INR 15167
- NAV: 7.58%
- Expense Ratio: 0.27%
The UTI Money Market Fund is a strong contender in the money market category. Its returns outperform FDs and savings accounts, as well as many of the other mutual funds of its category. It is managed by one of the oldest and most trusted mutual fund houses in India. The UTI Money Market Fund is a reliable option for conservative investors.
Conclusion
Money market funds are a compelling option for investors looking for safety and slightly better returns compared to traditional savings instruments. In this post, we have curated the list of the top five money market mutual funds. With these funds, you have a viable solution that balances safety with the potential for higher returns.
