1. Is an overnight fund safe for investment?

Yes, overnight funds are considered one of the safest mutual fund categories. Since they invest in one-day securities, both interest rate risk and credit risk are very low.

2. How long should I invest in an overnight fund?

Overnight funds are best suited for a few days to a few weeks. They are ideal when you want to keep money safe temporarily before using or investing it elsewhere.

3. Can I withdraw money anytime from an overnight fund?

Yes, most overnight funds do not have a lock-in period. You can redeem your investment anytime, and the amount is usually credited on the next working day (T+1 basis).

4. Do overnight funds give guaranteed returns?

No, returns are not guaranteed. They are usually stable and consistent with the short-term money market rates and fluctuate minimally.

5. What is the difference between an overnight fund and a savings account?

Overnight funds can be slightly higher in returns than savings accounts. The change in the level of the NAV of the fund is minimal compared to savings accounts, yet the risk is very low.