Investors increasingly opt for overnight funds to meet short-term needs

While risk is low, expectation of returns must remain moderate

Do you have investible surplus and are looking to park it in an instrument that provides safety and liquidity, while earning reasonable returns over the short term? In the past, the popular option among debt funds for this purpose was the liquid category. But nowadays investors increasingly opt for overnight funds to meet their short-term needs.

Downgrades and defaults at IL&FS, several non-bank finance companies (NBFCs) and other reputed corporates have made investors hyper cautious. During this ongoing crisis, investors took hits even in supposedly safe debt fund categories, such as liquid funds and banking and PSU funds. While bank fixed