What is Overnight Fund?
Overnight Funds refer to a category of mutual funds focused on investing in short-term debt instruments and money market securities with very short maturity periods typically no longer, than one day. The main objective of an Overnight Fund is to provide investors with a place to park surplus funds while earning higher returns compared to traditional savings accounts. These funds aim to help investors generate returns, on their cash reserves thereby optimising their overall investment portfolio.
The primary objective of Overnight Funds is to offer investors a way to temporarily park surplus funds overnight or, for very short durations. These funds aim to generate returns that surpass those offered by savings accounts.
These funds have a characteristic that sets them apart. They prioritize safeguarding capital minimising the impact of interest rate changes and allowing access, to money without any fees for withdrawal. Overnight Funds are especially appealing to investors with cash reserves and individuals looking for a low-risk investment choice that offers flexibility, for short-term financial objectives. Overnight Funds are considered a low-risk investment option. Have gained popularity among conservative investors who seek stability in their portfolios.
Table of Content
- Features of Overnight Funds
- Purpose of Overnight Fund
- Who Should Consider Investing in Overnight Fund?
- Factors to Consider Before Investing in Overnight Funds
- Advantages of Overnight Funds
- Disadvantages of Overnight Funds
- Conclusion