Debt Mutual Fund Types
A fast visual guide to India’s debt fund categories — what they invest in and typical maturity/duration or minimum allocation rules.
At a Glance
Ranges and minimums below are summarized from your brief.
1) Overnight Fund
Live examples
Maturity: 1 day (overnight securities)
Open‑ended scheme investing only in overnight securities.
Overnight2) Liquid Fund
Live examples
Maturity: up to 91 days
Open‑ended liquid scheme investing in debt & money market instruments up to 91 days.
Liquid3) Ultra‑Short Duration Fund
Live examples
Avg maturity: 3–6 months
Invests in debt & money market instruments targeting ultra‑short tenors.
Ultra‑Short4) Low Duration Fund
Live examples
Avg maturity: 6–12 months
Low‑duration exposure in debt & money market instruments.
Low Duration5) Money Market Fund
Live examples
Maturity: up to 1 year
Invests in money market instruments with maturities up to 1 year.
Money Market6) Short Duration Fund
Live examples
Avg maturity: 1–3 years
Short‑term debt & money market exposure.
Short Duration7) Medium Duration Fund
Live examples
Avg maturity: typically 3–4 years (flex: ~1–4 years in adverse conditions)
Medium‑tenor exposure; mandate allows shorter stance under adverse scenarios.
Medium Duration8) Medium to Long Duration Fund
Live examples
Avg maturity: 4–7 years (flex: ~1–7 years in adverse conditions)
Medium‑to‑long exposure with flexibility across the curve.
Medium‑to‑Long9) Long Duration Fund
Live examples
Avg maturity: > 7 years
Long‑duration portfolio targeting higher interest‑rate sensitivity.
Long Duration10) Dynamic Bond
Live examples
Across durations
Actively manages duration across the curve based on rate outlook.
Dynamic11) Corporate Bond Fund
Live examples
- HDFC Corporate Bond Fund
- ICICI Prudential Corporate Bond Fund
- Aditya Birla Sun Life Corporate Bond Fund
Min 80% in AA+ & above rated corporate bonds
Predominantly invests in high‑quality corporate debt (AA+ and above).
Corporate Bond ≥ 80%12) Credit Risk Fund
Live examples
Min 65% in AA & below (excludes AA+)
Targets lower‑rated corporate bonds for higher yield with higher credit risk.
Credit Risk ≥ 65%13) Banking & PSU Fund
Live examples
Min 80% in debt of Banks, PSUs, PFIs, Municipal Bonds
Focuses on high‑quality quasi‑sovereign/financial issuers.
Banking & PSU ≥ 80%14) Gilt Fund
Live examples
Min 80% in Government Securities (any maturity)
Invests primarily in G‑secs across maturities; high quality but rate sensitive.
Gilt ≥ 80%15) Gilt Fund with 10‑Year Constant Duration
Live examples
Min 80% in G‑secs • Avg maturity: ~10 years
Maintains a constant portfolio duration around 10 years.
Gilt 10Y16) Floater Fund
Live examples
Min 65% in floating‑rate instruments
Predominantly invests in FRNs and instruments with floating coupons.
Floater ≥ 65%Bottom Line
Match fund duration to your time horizon and rate view: shorter for liquidity, intermediate for balance, longer for rate bets; use corporate/credit/PSU/gilt buckets per quality preference; dynamic/floater for flexibility.