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5 Best Short Duration (Short Term) Debt Mutual Funds 2025

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5 Best Short Duration (Short Term) Debt Funds To Invest In 2025

Updated on June 5, 2025 , 27990 views

Generally, people believe that Mutual Fund investments are for long-term investors. Well, that's not true! There is a category of funds called Short Duration Funds or Short Term Debt fund that allow investors to invest for short-term along with keeping their money accessible. Though there are various Short Duration Funds available in the Market, investors are suggested to look for best Short Duration (Short Term) Debt Funds.

The best Short Duration (Short Term) Debt Funds are funds that allow investors to invest for a short term, typically for three years, to earn good returns with less market risk. These funds are highly suitable investors with a low-risk appetite who seek quick returns and a steady flow of Income without being affected by the daily changes in the bond markets.

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Best Short Duration Funds or Short Term Debt Funds FY 25 - 26

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)2024 (%)Debt Yield (YTM)Mod. DurationEff. Maturity
ICICI Prudential Short Term Fund Growth ₹60.335
↑ 0.14
₹20,9693.65.29.58.27.87.23%2Y 7M 24D4Y 4M 20D
HDFC Short Term Debt Fund Growth ₹32.1686
↑ 0.08
₹15,0303.85.41088.37.1%2Y 9M 18D4Y 2M 5D
IDFC Bond Fund Short Term Plan Growth ₹57.4367
↑ 0.09
₹9,8163.85.59.97.97.87.07%2Y 10M 20D3Y 8M 8D
Aditya Birla Sun Life Short Term Opportunities Fund Growth ₹47.8042
↑ 0.11
₹8,3433.85.49.87.97.97.19%2Y 10M 13D3Y 8M 23D
Nippon India Short Term Fund Growth ₹53.1126
↑ 0.15
₹6,69245.710.27.887.14%2Y 9M3Y 7M 13D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 6 Jun 25
*List Funds based on Assets >= 100 Crore & Sorted on 3 Year CAGR Return.

1. ICICI Prudential Short Term Fund

To generate income through investments in a range of debt and money market instruments of various maturities with a view to maximising income while maintaining the optimum balance of yield, safety and liquidity.

ICICI Prudential Short Term Fund is a Debt - Short term Bond fund was launched on 25 Oct 01. It is a fund with Moderate risk and has given a CAGR/Annualized return of 7.9% since its launch.  Ranked 11 in Short term Bond category.  Return for 2024 was 7.8% , 2023 was 7.4% and 2022 was 4.7% .

Below is the key information for ICICI Prudential Short Term Fund

ICICI Prudential Short Term Fund
Growth
Launch Date 25 Oct 01
NAV (06 Jun 25) ₹60.335 ↑ 0.14   (0.24 %)
Net Assets (Cr) ₹20,969 on 30 Apr 25
Category Debt - Short term Bond
AMC ICICI Prudential Asset Management Company Limited
Rating
Risk Moderate
Expense Ratio 1.11
Sharpe Ratio 2.23
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 1,000
Exit Load 0-7 Days (0.25%),7 Days and above(NIL)
Yield to Maturity 7.23%
Effective Maturity 4 Years 4 Months 20 Days
Modified Duration 2 Years 7 Months 24 Days

Growth of 10,000 investment over the years.

DateValue
31 May 20₹10,000
31 May 21₹10,750
31 May 22₹11,062
31 May 23₹11,905
31 May 24₹12,764
31 May 25₹13,941

ICICI Prudential Short Term Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹200,132.
Net Profit of ₹20,132
Invest Now

Returns for ICICI Prudential Short Term Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 6 Jun 25

DurationReturns
1 Month 1.1%
3 Month 3.6%
6 Month 5.2%
1 Year 9.5%
3 Year 8.2%
5 Year 6.9%
10 Year
15 Year
Since launch 7.9%
Historical performance (Yearly) on absolute basis
YearReturns
2024 7.8%
2023 7.4%
2022 4.7%
2021 3.9%
2020 10.6%
2019 9.7%
2018 5.8%
2017 5.9%
2016 11.1%
2015 8%
Fund Manager information for ICICI Prudential Short Term Fund
NameSinceTenure
Manish Banthia19 Nov 0915.54 Yr.
Nikhil Kabra29 Dec 204.42 Yr.

Data below for ICICI Prudential Short Term Fund as on 30 Apr 25

Asset Allocation
Asset ClassValue
Cash4.07%
Debt95.68%
Other0.26%
Debt Sector Allocation
SectorValue
Corporate60.44%
Government35.24%
Cash Equivalent4.07%
Credit Quality
RatingValue
AA18.08%
AAA81.92%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
7.1% Govt Stock 2034
Sovereign Bonds | -
7%₹1,597 Cr151,555,180
↓ -57,500,000
7.81% Govt Stock 2033
Sovereign Bonds | -
6%₹1,262 Cr121,501,270
6.79% Govt Stock 2034
Sovereign Bonds | -
5%₹1,025 Cr98,905,400
↑ 42,754,550
6.99% Govt Stock 2034
Sovereign Bonds | -
3%₹708 Cr69,574,740
7.58% LIC Housing Finance Limited (23/03/2035)
Debentures | -
3%₹611 Cr60,000
National Bank For Agriculture And Rural Development
Debentures | -
3%₹555 Cr55,000
National Bank For Agriculture And Rural Development
Debentures | -
2%₹514 Cr50,500
↑ 2,500
Small Industries Development Bank Of India
Debentures | -
2%₹374 Cr37,000
Small Industries Development Bank Of India
Debentures | -
2%₹368 Cr36,500
National Bank For Agriculture And Rural Development
Debentures | -
2%₹353 Cr35,000

2. HDFC Short Term Debt Fund

(Erstwhile HDFC Short Term Opportunities Fund)

To generate regular income through investments in Debt/Money Market Instruments and Government Securities with maturities not exceeding 36 months.

HDFC Short Term Debt Fund is a Debt - Short term Bond fund was launched on 25 Jun 10. It is a fund with Moderately Low risk and has given a CAGR/Annualized return of 8.1% since its launch.  Ranked 30 in Short term Bond category.  Return for 2024 was 8.3% , 2023 was 7.1% and 2022 was 3.5% .

Below is the key information for HDFC Short Term Debt Fund

HDFC Short Term Debt Fund
Growth
Launch Date 25 Jun 10
NAV (06 Jun 25) ₹32.1686 ↑ 0.08   (0.24 %)
Net Assets (Cr) ₹15,030 on 30 Apr 25
Category Debt - Short term Bond
AMC HDFC Asset Management Company Limited
Rating
Risk Moderately Low
Expense Ratio 0.71
Sharpe Ratio 2.43
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 300
Exit Load NIL
Yield to Maturity 7.1%
Effective Maturity 4 Years 2 Months 5 Days
Modified Duration 2 Years 9 Months 18 Days

Growth of 10,000 investment over the years.

DateValue
31 May 20₹10,000
31 May 21₹10,768
31 May 22₹11,057
31 May 23₹11,805
31 May 24₹12,654
31 May 25₹13,876

HDFC Short Term Debt Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹200,132.
Net Profit of ₹20,132
Invest Now

Returns for HDFC Short Term Debt Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 6 Jun 25

DurationReturns
1 Month 1.3%
3 Month 3.8%
6 Month 5.4%
1 Year 10%
3 Year 8%
5 Year 6.8%
10 Year
15 Year
Since launch 8.1%
Historical performance (Yearly) on absolute basis
YearReturns
2024 8.3%
2023 7.1%
2022 3.5%
2021 3.9%
2020 11%
2019 9.7%
2018 7%
2017 6.5%
2016 9.3%
2015 8.7%
Fund Manager information for HDFC Short Term Debt Fund
NameSinceTenure
Anil Bamboli25 Jun 1014.94 Yr.
Dhruv Muchhal22 Jun 231.94 Yr.

Data below for HDFC Short Term Debt Fund as on 30 Apr 25

Asset Allocation
Asset ClassValue
Cash3.59%
Debt96.14%
Other0.27%
Debt Sector Allocation
SectorValue
Corporate61.13%
Government35.01%
Cash Equivalent3.59%
Credit Quality
RatingValue
AA10.88%
AAA89.12%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
7.18% Govt Stock 2033
Sovereign Bonds | -
6%₹872 Cr82,500,000
Aditya Birla Renewables Limited
Debentures | -
3%₹442 Cr43,500
7.11% Govt Stock 2028
Sovereign Bonds | -
3%₹419 Cr41,500,000
7.26% Govt Stock 2032
Sovereign Bonds | -
2%₹366 Cr34,500,000
Jamnagar Utilities And Power Private Limited
Debentures | -
2%₹333 Cr32,500
7.1% Govt Stock 2034
Sovereign Bonds | -
2%₹290 Cr27,500,000
National Bank for Agriculture and Rural Development
Domestic Bonds | -
2%₹257 Cr25,000
Bajaj Housing Finance Limited
Debentures | -
2%₹255 Cr25,000
Pipeline Infrastructure Private Limited
Debentures | -
2%₹253 Cr24,500
TVS Credit Services Limited
Debentures | -
1%₹208 Cr200

3. IDFC Bond Fund Short Term Plan

(Erstwhile IDFC Super Saver Income Fund - Short Term Plan)

The primary investment objective of the scheme is to seek to generate stable returns with a low-risk strategy by creating a portfolio that is invested in good quality fixed income & Money Market securities. However, there can be no assurance that the investment objectives of the scheme will be realized.

IDFC Bond Fund Short Term Plan is a Debt - Short term Bond fund was launched on 14 Dec 00. It is a fund with Moderately Low risk and has given a CAGR/Annualized return of 7.4% since its launch.  Ranked 47 in Short term Bond category.  Return for 2024 was 7.8% , 2023 was 6.9% and 2022 was 2.8% .

Below is the key information for IDFC Bond Fund Short Term Plan

IDFC Bond Fund Short Term Plan
Growth
Launch Date 14 Dec 00
NAV (06 Jun 25) ₹57.4367 ↑ 0.09   (0.16 %)
Net Assets (Cr) ₹9,816 on 30 Apr 25
Category Debt - Short term Bond
AMC IDFC Asset Management Company Limited
Rating
Risk Moderately Low
Expense Ratio 0.77
Sharpe Ratio 2.34
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 1,000
Exit Load NIL
Yield to Maturity 7.07%
Effective Maturity 3 Years 8 Months 8 Days
Modified Duration 2 Years 10 Months 20 Days

Growth of 10,000 investment over the years.

DateValue
31 May 20₹10,000
31 May 21₹10,614
31 May 22₹10,795
31 May 23₹11,522
31 May 24₹12,280
31 May 25₹13,472

IDFC Bond Fund Short Term Plan SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹200,132.
Net Profit of ₹20,132
Invest Now

Returns for IDFC Bond Fund Short Term Plan

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 6 Jun 25

DurationReturns
1 Month 1.3%
3 Month 3.8%
6 Month 5.5%
1 Year 9.9%
3 Year 7.9%
5 Year 6.2%
10 Year
15 Year
Since launch 7.4%
Historical performance (Yearly) on absolute basis
YearReturns
2024 7.8%
2023 6.9%
2022 2.8%
2021 3.4%
2020 9.7%
2019 9.7%
2018 6.5%
2017 5.9%
2016 8.8%
2015 8.1%
Fund Manager information for IDFC Bond Fund Short Term Plan
NameSinceTenure
Suyash Choudhary11 Mar 1114.23 Yr.
Brijesh Shah10 Jun 240.97 Yr.

Data below for IDFC Bond Fund Short Term Plan as on 30 Apr 25

Asset Allocation
Asset ClassValue
Cash13.16%
Debt86.57%
Other0.27%
Debt Sector Allocation
SectorValue
Corporate48.42%
Government47.07%
Cash Equivalent4.23%
Credit Quality
RatingValue
AAA100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
7.26% Govt Stock 2033
Sovereign Bonds | -
20%₹1,975 Cr186,400,000
↑ 70,900,000
REC Ltd. 7.44%
Debentures | -
9%₹864 Cr85,000,000
Indian Railway Finance Corporation Limited
Debentures | -
5%₹486 Cr47,500,000
↑ 47,500,000
Bajaj Housing Finance Ltd. 8.04%
Debentures | -
5%₹482 Cr47,500,000
Tata Capital Financial Services Limited
Debentures | -
4%₹445 Cr44,100,000
7.48% National Bank For Agriculture And Rural Development
Debentures | -
4%₹382 Cr37,500,000
Export-Import Bank Of India
Debentures | -
4%₹356 Cr35,000,000
Bajaj Finance Limited
Debentures | -
3%₹291 Cr29,000,000
LIC Housing Finance Limited
Debentures | -
3%₹274 Cr27,000,000
National Bank For Agriculture And Rural Development
Debentures | -
3%₹264 Cr26,000,000

4. Aditya Birla Sun Life Short Term Opportunities Fund

An Open ended Income scheme with the objective to generate regular income by investing primarily in investment grade fixed income securities / money market instruments with short to medium term maturities and across the credit spectrum within the universe of investment grade rating.

Aditya Birla Sun Life Short Term Opportunities Fund is a Debt - Short term Bond fund was launched on 9 May 03. It is a fund with Moderate risk and has given a CAGR/Annualized return of 7.3% since its launch.  Ranked 18 in Short term Bond category.  Return for 2024 was 7.9% , 2023 was 6.9% and 2022 was 4.2% .

Below is the key information for Aditya Birla Sun Life Short Term Opportunities Fund

Aditya Birla Sun Life Short Term Opportunities Fund
Growth
Launch Date 9 May 03
NAV (06 Jun 25) ₹47.8042 ↑ 0.11   (0.24 %)
Net Assets (Cr) ₹8,343 on 30 Apr 25
Category Debt - Short term Bond
AMC Birla Sun Life Asset Management Co Ltd
Rating
Risk Moderate
Expense Ratio 1.06
Sharpe Ratio 2.32
Information Ratio 0
Alpha Ratio 0
Min Investment 1,000
Min SIP Investment 1,000
Exit Load 0-90 Days (0.5%),90 Days and above(NIL)
Yield to Maturity 7.19%
Effective Maturity 3 Years 8 Months 23 Days
Modified Duration 2 Years 10 Months 13 Days

Growth of 10,000 investment over the years.

DateValue
31 May 20₹10,000
31 May 21₹10,918
31 May 22₹11,267
31 May 23₹12,026
31 May 24₹12,836
31 May 25₹14,054

Aditya Birla Sun Life Short Term Opportunities Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹203,125.
Net Profit of ₹23,125
Invest Now

Returns for Aditya Birla Sun Life Short Term Opportunities Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 6 Jun 25

DurationReturns
1 Month 1.2%
3 Month 3.8%
6 Month 5.4%
1 Year 9.8%
3 Year 7.9%
5 Year 7.1%
10 Year
15 Year
Since launch 7.3%
Historical performance (Yearly) on absolute basis
YearReturns
2024 7.9%
2023 6.9%
2022 4.2%
2021 3.8%
2020 11.1%
2019 8.5%
2018 6.5%
2017 5.6%
2016 11.3%
2015 8.4%
Fund Manager information for Aditya Birla Sun Life Short Term Opportunities Fund
NameSinceTenure
Kaustubh Gupta11 Sep 1410.73 Yr.
Mohit Sharma6 Aug 204.82 Yr.

Data below for Aditya Birla Sun Life Short Term Opportunities Fund as on 30 Apr 25

Asset Allocation
Asset ClassValue
Cash6.29%
Debt93.43%
Other0.28%
Debt Sector Allocation
SectorValue
Corporate59.87%
Government33.56%
Cash Equivalent6.29%
Credit Quality
RatingValue
AA14.29%
AAA85.71%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
National Bank For Agriculture And Rural Development
Debentures | -
5%₹432 Cr42,500
Power Grid Corporation of India Ltd. 6.94%
Domestic Bonds | -
5%₹376 Cr37,500
↑ 37,500
7.18% Govt Stock 2033
Sovereign Bonds | -
4%₹311 Cr29,500,000
↓ -20,000,000
7.48% National Bank For Agriculture And Rural Development
Debentures | -
3%₹264 Cr26,000
↑ 26,000
Small Industries Development Bank Of India
Debentures | -
3%₹239 Cr23,500
7.1% Govt Stock 2034
Sovereign Bonds | -
3%₹214 Cr20,406,400
↓ -42,000,000
Bajaj Housing Finance Limited
Debentures | -
2%₹204 Cr20,000
Small Industries Development Bank Of India
Debentures | -
2%₹186 Cr1,850
Embassy Office Parks Reit
Debentures | -
2%₹183 Cr18,000
7.17% Indian Railway Finance Corporation Limited**
Debentures | -
2%₹178 Cr17,500

5. Nippon India Short Term Fund

The primary investment objective of the scheme is to generate stable returns for investors with a short term investment horizon by investing in fixed income securitites of a short term maturity.

Nippon India Short Term Fund is a Debt - Short term Bond fund was launched on 18 Dec 02. It is a fund with Moderately Low risk and has given a CAGR/Annualized return of 7.7% since its launch.  Ranked 17 in Short term Bond category.  Return for 2024 was 8% , 2023 was 6.8% and 2022 was 3.2% .

Below is the key information for Nippon India Short Term Fund

Nippon India Short Term Fund
Growth
Launch Date 18 Dec 02
NAV (06 Jun 25) ₹53.1126 ↑ 0.15   (0.27 %)
Net Assets (Cr) ₹6,692 on 30 Apr 25
Category Debt - Short term Bond
AMC Nippon Life Asset Management Ltd.
Rating
Risk Moderately Low
Expense Ratio 0.96
Sharpe Ratio 2.38
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 100
Exit Load NIL
Yield to Maturity 7.14%
Effective Maturity 3 Years 7 Months 13 Days
Modified Duration 2 Years 9 Months

Growth of 10,000 investment over the years.

DateValue
31 May 20₹10,000
31 May 21₹10,755
31 May 22₹11,035
31 May 23₹11,737
31 May 24₹12,522
31 May 25₹13,761

Nippon India Short Term Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹200,132.
Net Profit of ₹20,132
Invest Now

Returns for Nippon India Short Term Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 6 Jun 25

DurationReturns
1 Month 1.4%
3 Month 4%
6 Month 5.7%
1 Year 10.2%
3 Year 7.8%
5 Year 6.7%
10 Year
15 Year
Since launch 7.7%
Historical performance (Yearly) on absolute basis
YearReturns
2024 8%
2023 6.8%
2022 3.2%
2021 4.4%
2020 9.5%
2019 9.4%
2018 5.5%
2017 5.7%
2016 9.8%
2015 8.1%
Fund Manager information for Nippon India Short Term Fund
NameSinceTenure
Vivek Sharma1 Feb 205.33 Yr.
Kinjal Desai25 May 187.02 Yr.
Sushil Budhia31 Mar 214.17 Yr.

Data below for Nippon India Short Term Fund as on 30 Apr 25

Asset Allocation
Asset ClassValue
Cash4.81%
Debt94.88%
Other0.31%
Debt Sector Allocation
SectorValue
Corporate58.43%
Government37.96%
Cash Equivalent3.31%
Credit Quality
RatingValue
AA10.45%
AAA89.55%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
7.32% Govt Stock 2030
Sovereign Bonds | -
8%₹535 Cr50,500,000
7.17% Govt Stock 2030
Sovereign Bonds | -
7%₹487 Cr46,500,000
7.02% Govt Stock 2031
Sovereign Bonds | -
4%₹262 Cr25,000,000
7.1% Govt Stock 2029
Sovereign Bonds | -
3%₹218 Cr21,000,000
Aditya Birla Housing Finance Ltd. 7.86%
Debentures | -
3%₹203 Cr20,000
Small Industries Development Bank Of India
Debentures | -
3%₹170 Cr16,500
National Bank For Agriculture And Rural Development
Debentures | -
3%₹170 Cr16,500
8.2% Can Fin Homes Limited**
Debentures | -
3%₹168 Cr16,500
LIC Housing Finance Limited
Debentures | -
2%₹153 Cr15,000
Rural Electrification Corporation Limited
Debentures | -
2%₹152 Cr15,000

Why Invest In Best Short Duration Debt Funds?

Given the short term nature of these investments, Short Duration (Short Term) Debt Funds do not offer very high returns like Equity Funds. However, there are certainly several reasons that ensure Investing in the best Short Duration (Short Term) Debt funds is totally worth to consider. Some of those include-

  • Short Duration (Short Term) debt funds are a highly suitable option for investors who are willing to make investments that have a slightly higher maturity than liquid & ultra short term debt funds but on the same hand are not very risky.

  • Being a short term investment, this fund is highly suitable for those who want to park their idle cash for 1-3 years to earn better returns than Fixed Income investment options like FDs.

  • As per the analysis, short term bond funds offer a better rate of return in accordance with the risk involved as compared to long term Bonds. Short Duration Funds are less sensitive to the rising Inflation than other intermediate and long term debt funds.

  • Lastly, the Short Duration (Short Term) debt funds are highly liquid, meaning that the investors can have an easy access to their cash. However, some schemes under this category do charge an exit load if the investment is redeemed in a very short duration (mostly 1 month to 6 months). So, it is always suggested to invest in best Short Duration Debt Funds wisely.

    How to Invest in Short Duration Debt Funds Online?

  1. Open Free Investment Account for Lifetime at Fincash.com.

  2. Complete your Registration and KYC Process

  3. Upload Documents (PAN, Aadhaar, etc.). And, You are Ready to Invest!

    Get Started

Conclusion

Investors can tweak their investment portfolios as per their risk profile. As the bond market offers the advantage of falling interest rates, one can earn better returns by increasing the duration o the investment. This is where Short Duration (Short Term) Debt Funds come in. These funds invest in debt market to offer long term returns over the duration of 2-3 years. So, invest in best Short Duration Funds today!

Disclaimer:
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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