Best Yielding Money Market Mutual Funds

Best Yielding Money Market Mutual Funds

The Best Yielding Money Market Mutual Funds is a good option if you are looking for a safe, short-term, liquid investment for your cash. These mutual funds are designed to offer low costs, high liquidity and very low risk. Do not confuse money market funds with money market accounts offered by banks and credit unions, which have interest rates based on current interest rates. Money market funds are investment securities, not bank accounts.

In common parlance, money market funds are debt funds or mutual money market funds, the only difference being the investment period. Money market funds invest in very short-term money market instruments such as certificates of deposit, treasury bills, commercial paper, etc. Because these funds are short-term debt instruments, they are particularly suitable for investors looking for low-risk investments with short maturities. The short maturity of the best liquid funds makes it easier for fund managers to meet investors’ redemption demands. Various money market fund investments are available in the market. Money market funds are extremely safe investments that allow you to earn substantial returns on short-term investments.

How do money market funds work?

A money market fund invests in money market instruments with the goal of earning good returns (interest income) and minimizing fluctuations NAV.

Also Read Best Crypto To Buy Now For Best Returns In 2023

Types of money market instruments:-

The money market is an exchange where Trading in cash and cash-like instruments takes place. The instruments that are traded in the money markets have maturities that can vary from one day to one year. Here are some important money market instruments in India.

Also Read A beginner’s guide to Bitcoin, the basics of what Bitcoin is, how it works, and how to get started using it.

1. Treasury Bills:- The Indian government issues Treasury bills to raise funds for a period of up to 365 days. Since they are issued by the government, they are considered very safe. However, lower risks also mean lower yields, which is also the case with Treasury bills. The yield on Treasury bills is lower than on other money market instruments.
2. Certificate of Deposit or CD A CD is a term deposit offered by regular commercial banks with no possibility of early repayment. The main difference between a CD and an FD is that CDs are freely tradable.
3. Repurchase Agreements or Repos A repurchase agreement is entered into between a bank and the RBI to enable short-term borrowing. It can also be concluded between two banks.
4. Commercial paper or CP Companies and financial institutions with a high credit rating can issue commercial paper, which are short-term, unsecured promissory bills. They allow these companies to diversify their short-term borrowing sources. CPs are usually issued at a discounted rate, while repayment is at par. The investor receives the difference.

Also Read A beginner’s guide to investing in the stock market.

Here are some of the best money market funds available today:-

1. Nippon India Money Market Fund:- The investment objective of the fund is to provide optimum returns with moderate risk and high liquidity. Accordingly, investments are made primarily in debt securities and money market instruments. Nippon India Money Market Fund is a debt securities money market fund launched on June 16, 05. It is a low risk fund that has achieved a CAGR/annual return of 7.3% since inception. Ranked 27th in the money market category. The 2022 return was 5%, 2021 return was 3.8%, and 2020 return was 6%. https://mf.nipponindiaim.com/FundsAndPerformance/Pages/NipponIndia-Money-Market-Fund.aspx
2. UTI Money Market Funds:- To provide the highest possible current income while preserving capital and providing liquidity by investing in a diversified portfolio of short-term money market securities. UTI Money Market Fund is a debt securities money market fund that was launched on July 13, 09. It is a low risk fund that has achieved a CAGR/Annualised Return of 7.2% since inception. Ranked 23rd in the money market category. The return for 2022 was 4.9%, 2021 was 3.7% and 2020 was 6%.
3. Kotak Money Market Scheme:- Reduce the interest rate risk associated with investments in fixed income instruments by predominantly investing in floating rate securities, money market instruments and using appropriate derivatives. Kotak Money Market Scheme is a debt securities money market fund launched on July 14, 2003. It is a low risk fund that has achieved a CAGR/annual return of 7% since inception. Ranked 19th in the money market category. The 2022 return was 4.9%, 2021 return was 3.7%, and 2020 return was 5.7%.
4. Aditya Birla Sun Life Money Manager Fund:- The Funds’ primary objective is to generate regular income by investing in a portfolio consisting primarily of floating rate debt/money market instruments. The Funds may invest a portion of their net assets in fixed rate debt securities and money market instruments. Aditya Birla Sun Life Money Manager Fund is a debt securities money market fund that was launched on 10/13/05. It is a low risk fund that has achieved a CAGR/annual return of 6.7% since inception. Ranked 7th in the money market category. Return for 2022.
5. Tata Money Market Fund:- To build a highly liquid portfolio of high quality debt securities and money market instruments to provide adequate returns and liquidity to unitholders. Tata Money Market Fund is a debt money market fund launched on May 22, 03. It is a low risk fund that has achieved a CAGR/annual return of 6.6% since inception. Ranked 30th in the money market category. The return for 2022 was 4.8%, 2021 was 3.9% and 2020 was 6.4%.
6. ICICI Prudential Money Market Fund:- The objective of the plan is to provide reasonable returns with low risk while providing a high degree of liquidity by investing primarily in money market and debt securities. ICICI Prudential Money Market Fund is a debt money market fund launched on March 9, 06. It is a low risk fund that has achieved a CAGR/annual return of 7.1% since inception. Ranked 17th in the money market category. The return for 2022 was 4.7%, 2021 was 3.7% and 2020 was 6.2%.
7. HDFC Money Market Fund:- Achieve optimal returns while ensuring safety and high liquidity. HDFC Money Market Fund is a debt money market fund launched on November 18, 99. It is a low risk fund and has achieved a CAGR/annual return of 7% since inception. Ranked 41st in the money market category. The 2022 return was 4.7%, 2021 return was 3.8%, and 2020 return was 6.5%.
8. Franklin India Savings Fund:- The objective of the fund is to generate income while taking appropriate risk from a portfolio consisting primarily of floating rate debt instruments, fixed rate debt instruments swapped into floating rate income, fixed rate instruments and money market instruments. Franklin India Savings Fund is a debt securities money market fund launched on February 11, 02. It is a moderately low risk fund that has achieved a CAGR/annual return of 7.1% since inception. Ranked 47th in the money market category. The 2022 return was 4.4%, 2021 return was 3.6%, and 2020 return was 6%.