Synopsis: Money market mutual funds invest in short-term debt instruments, Treasury Bills, Commercial Papers and Certificates of Deposit, that have relatively low volatility and are held for a short term. The article lists the 6 Money Market mutual funds based on 1-year returns for 2026.
Money market mutual funds are invested in short-term securities like Treasury Bills, Commercial Papers, and Certificates of Deposits, and these are comparatively less volatile than funds that are oriented towards equity investments. These funds aim to generate returns, and at the same time, ensure liquidity in the portfolio, and they carry relatively lower interest rate risks compared with long-term debt mutual funds. Returns from these funds are dependent on variables like interest rates and security yields.
Top 6 Money Market Mutual Funds (1-Year Returns)
1. Union Money Market Fund
- NAV: ₹1,353.65
- AUM: ₹1,135.78 Cr
- Expense Ratio: 0.19%
- Exit Load: Nil
- 1-Year returns: 6.54%
- Min SIP: ₹500
2. LIC MF Money Market Fund
- NAV: ₹1,286.73
- AUM: ₹4,897.66 Cr
- Expense Ratio: 0.16%
- Exit Load: Nil
- 1-Year returns: 6.48%
- Min SIP: ₹200
3. Bank of India Money Market Fund
- NAV: ₹11.05
- AUM: ₹417.46 Cr
- Expense Ratio: 0.18%
- Exit Load: Nil
- 1-Year returns: 6.45%
- Min SIP: ₹1,000
4. Tata Money Market Fund
- NAV: ₹5,143.60
- AUM: ₹33,029.98 Cr
- Expense Ratio: 0.18%
- Exit Load: Nil
- 1-Year returns: 6.43%
- Min SIP: ₹500
5. Bandhan Money Market Fund
- NAV: ₹46.66
- AUM: ₹14,977.42 Cr
- Expense Ratio: 0.10%
- Exit Load: Nil
- 1-Year returns: 6.42%
- Min SIP: ₹100
6. Axis Money Market Fund
- NAV: ₹1,543.39
- AUM: ₹18,185.08 Cr
- Expense Ratio: 0.18%
- Exit Load: Nil
- 1-Year returns: 6.38%
- Min SIP: ₹100
Factors to Consider
- Check the expense ratio of the fund; lower expenses will help investors keep more profits.
- Evaluate the quality of the portfolio as well as credit ratings of the securities owned by the fund to associated risk factors.
- Check the investment timeframe and select funds according to short term financial objectives and liquidity needs.
- Compare performance history, keeping in mind that past performance is not a guarantee of future performance.
- Check the size of the fund and the AUM, but avoid selecting a fund solely based on its asset size.
Key Takeaways
- Money market mutual funds invest mainly in short-term debt instruments such as Treasury Bills, Commercial Papers, and Certificates of Deposit.
- The top-performing funds in this list delivered 1-year returns between 6.38% and 6.54%.
- Union Money Market Fund recorded the highest 1-year return among the selected schemes at 6.54%.
- Tata Money Market Fund had the highest AUM among the listed funds, indicating a larger asset base
- Bandhan Money Market Fund had the lowest expense ratio among these funds at 0.10%.
- Investors should consider their financial goals, risk appetite, and investment duration before investing.
Disclaimer: The information provided in this article is for educational purposes only and should not be construed as financial advice or investment recommendation. Returns mentioned are based on historical performance and may not be sustained in the future. Mutual fund investments are subject to market risks, including potential loss of capital. Investors are advised to assess their risk appetite and financial goals and to consult a certified financial advisor before investing.
