fincash logo SOLUTIONS
EXPLORE FUNDS
CALCULATORS
fincash number+91-22-48913909
5 Best Short Duration (Short Term) Debt Mutual Funds 2025

Fincash » MutualFunds » Best Short Duration Funds

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

Updated on July 17, 2025 , 28077 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.

Ready to Invest?
Talk to our investment specialist
Disclaimer:
By submitting this form I authorize Fincash.com to call/SMS/email me about its products and I accept the terms of Privacy Policy and Terms & Conditions.

best-short-duration-funds

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 ₹60.6474
↑ 0.03
₹21,2842.15.1987.87.08%2Y 4M 17D4Y 18D
HDFC Short Term Debt Fund Growth ₹32.2822
↑ 0.01
₹17,0192.15.19.27.98.36.87%2Y 9M4Y 1M 2D
Axis Short Term Fund Growth ₹31.1775
↑ 0.01
₹9,4942.25.39.47.786.83%2Y 7M 6D3Y 2M 23D
Nippon India Short Term Fund Growth ₹53.2575
↑ 0.03
₹7,0582.15.39.47.686.87%2Y 8M 16D3Y 5M 26D
IDFC Bond Fund Short Term Plan Growth ₹57.6699
↑ 0.04
₹10,6972.15.39.27.67.86.57%2Y 10M 10D3Y 7M 10D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 18 Jul 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 (18 Jul 25) ₹60.6474 ↑ 0.03   (0.05 %)
Net Assets (Cr) ₹21,284 on 31 May 25
Category Debt - Short term Bond
AMC ICICI Prudential Asset Management Company Limited
Rating
Risk Moderate
Expense Ratio 1.11
Sharpe Ratio 2.39
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 7.08%
Effective Maturity 4 Years 18 Days
Modified Duration 2 Years 4 Months 17 Days

Growth of 10,000 investment over the years.

DateValue
30 Jun 20₹10,000
30 Jun 21₹10,613
30 Jun 22₹10,919
30 Jun 23₹11,771
30 Jun 24₹12,637
30 Jun 25₹13,778

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 18 Jul 25

DurationReturns
1 Month 0.6%
3 Month 2.1%
6 Month 5.1%
1 Year 9%
3 Year 8%
5 Year 6.5%
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 31 May 25

Asset Allocation
Asset ClassValue
Cash4.68%
Debt95.07%
Other0.26%
Debt Sector Allocation
SectorValue
Corporate63.47%
Government32.04%
Cash Equivalent4.23%
Credit Quality
RatingValue
AA17.9%
AAA82.1%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
7.1% Govt Stock 2034
Sovereign Bonds | -
6%₹1,374 Cr130,385,280
↓ -21,169,900
7.81% Govt Stock 2033
Sovereign Bonds | -
6%₹1,256 Cr120,951,240
↓ -550,030
6.99% Govt Stock 2034
Sovereign Bonds | -
3%₹710 Cr69,574,740
LIC Housing Finance Ltd
Debentures | -
3%₹615 Cr60,000
National Bank For Agriculture And Rural Development
Debentures | -
3%₹556 Cr55,000
National Bank For Agriculture And Rural Development
Debentures | -
2%₹516 Cr50,500
6.79% Govt Stock 2034
Sovereign Bonds | -
2%₹433 Cr41,814,710
↓ -57,090,690
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 (18 Jul 25) ₹32.2822 ↑ 0.01   (0.04 %)
Net Assets (Cr) ₹17,019 on 15 Jun 25
Category Debt - Short term Bond
AMC HDFC Asset Management Company Limited
Rating
Risk Moderately Low
Expense Ratio 0.71
Sharpe Ratio 2.57
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 300
Exit Load NIL
Yield to Maturity 6.87%
Effective Maturity 4 Years 1 Month 2 Days
Modified Duration 2 Years 9 Months

Growth of 10,000 investment over the years.

DateValue
30 Jun 20₹10,000
30 Jun 21₹10,625
30 Jun 22₹10,909
30 Jun 23₹11,666
30 Jun 24₹12,527
30 Jun 25₹13,692

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 18 Jul 25

DurationReturns
1 Month 0.5%
3 Month 2.1%
6 Month 5.1%
1 Year 9.2%
3 Year 7.9%
5 Year 6.3%
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 1014.95 Yr.
Dhruv Muchhal22 Jun 231.95 Yr.

Data below for HDFC Short Term Debt Fund as on 15 Jun 25

Asset Allocation
Asset ClassValue
Cash8.33%
Debt91.43%
Other0.24%
Debt Sector Allocation
SectorValue
Corporate60.57%
Government31.99%
Cash Equivalent7.2%
Credit Quality
RatingValue
AA10.96%
AAA89.04%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
7.18% Govt Stock 2033
Sovereign Bonds | -
5%₹866 Cr82,500,000
Aditya Birla Renewables Limited
Debentures | -
3%₹445 Cr43,500
7.11% Govt Stock 2028
Sovereign Bonds | -
2%₹420 Cr41,500,000
Jubilant Beverages Limited
Debentures | -
2%₹389 Cr38,500
↑ 38,500
7.26% Govt Stock 2032
Sovereign Bonds | -
2%₹363 Cr34,500,000
Jamnagar Utilities & Power Private Limited
Debentures | -
2%₹333 Cr32,500
7.1% Govt Stock 2034
Sovereign Bonds | -
2%₹288 Cr27,500,000
National Bank For Agriculture And Rural Development
Debentures | -
2%₹257 Cr25,000
↑ 25,000
Bajaj Housing Finance Limited
Debentures | -
1%₹255 Cr25,000
Pipeline Infrastructure Limited
Debentures | -
1%₹254 Cr24,500

3. Axis Short Term Fund

To generate stable returns with a low risk strategy while maintaining liquidity through a portfolio comprising of debt and money market instruments. However, there can be no assurance that the investment objective of the scheme will be achieved.

Axis Short Term Fund is a Debt - Short term Bond fund was launched on 22 Jan 10. It is a fund with Moderately Low risk and has given a CAGR/Annualized return of 7.6% since its launch.  Ranked 26 in Short term Bond category.  Return for 2024 was 8% , 2023 was 6.8% and 2022 was 3.7% .

Below is the key information for Axis Short Term Fund

Axis Short Term Fund
Growth
Launch Date 22 Jan 10
NAV (18 Jul 25) ₹31.1775 ↑ 0.01   (0.04 %)
Net Assets (Cr) ₹9,494 on 31 May 25
Category Debt - Short term Bond
AMC Axis Asset Management Company Limited
Rating
Risk Moderately Low
Expense Ratio 0.92
Sharpe Ratio 2.54
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 1,000
Exit Load NIL
Yield to Maturity 6.83%
Effective Maturity 3 Years 2 Months 23 Days
Modified Duration 2 Years 7 Months 6 Days

Growth of 10,000 investment over the years.

DateValue
30 Jun 20₹10,000
30 Jun 21₹10,525
30 Jun 22₹10,821
30 Jun 23₹11,543
30 Jun 24₹12,337
30 Jun 25₹13,504

Axis 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 Axis 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 18 Jul 25

DurationReturns
1 Month 0.6%
3 Month 2.2%
6 Month 5.3%
1 Year 9.4%
3 Year 7.7%
5 Year 6.1%
10 Year
15 Year
Since launch 7.6%
Historical performance (Yearly) on absolute basis
YearReturns
2024 8%
2023 6.8%
2022 3.7%
2021 3.5%
2020 10.1%
2019 9.8%
2018 6.3%
2017 5.9%
2016 9.6%
2015 8.1%
Fund Manager information for Axis Short Term Fund
NameSinceTenure
Devang Shah5 Nov 1212.58 Yr.
Aditya Pagaria3 Jul 231.91 Yr.

Data below for Axis Short Term Fund as on 31 May 25

Asset Allocation
Asset ClassValue
Cash14.37%
Debt85.41%
Other0.22%
Debt Sector Allocation
SectorValue
Corporate62.34%
Government29.31%
Cash Equivalent8.13%
Credit Quality
RatingValue
AA15.31%
AAA84.69%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
7.18% Govt Stock 2033
Sovereign Bonds | -
7%₹824 Cr78,500,000
↓ -19,500,000
National Bank For Agriculture And Rural Development
Debentures | -
4%₹470 Cr46,000
↑ 10,500
National Bank For Agriculture And Rural Development
Debentures | -
3%₹316 Cr31,000
↑ 13,500
Power Finance Corporation Limited
Debentures | -
3%₹299 Cr30,000
↑ 20,000
6.79% Govt Stock 2031
Sovereign Bonds | -
2%₹257 Cr25,000,000
↑ 15,500,000
Rec Limited
Debentures | -
2%₹241 Cr23,604
↑ 13,500
National Bank For Agriculture And Rural Development
Debentures | -
2%₹204 Cr20,000
Rec Limited
Debentures | -
2%₹204 Cr20,000
↑ 20,000
Indigrid Infrastructure Trust
Debentures | -
2%₹193 Cr19,000
Small Industries Development Bank Of India
Debentures | -
1%₹153 Cr15,000

4. 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 (18 Jul 25) ₹53.2575 ↑ 0.03   (0.05 %)
Net Assets (Cr) ₹7,058 on 31 May 25
Category Debt - Short term Bond
AMC Nippon Life Asset Management Ltd.
Rating
Risk Moderately Low
Expense Ratio 0.96
Sharpe Ratio 2.59
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 100
Exit Load NIL
Yield to Maturity 6.87%
Effective Maturity 3 Years 5 Months 26 Days
Modified Duration 2 Years 8 Months 16 Days

Growth of 10,000 investment over the years.

DateValue
30 Jun 20₹10,000
30 Jun 21₹10,604
30 Jun 22₹10,879
30 Jun 23₹11,594
30 Jun 24₹12,396
30 Jun 25₹13,570

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 18 Jul 25

DurationReturns
1 Month 0.5%
3 Month 2.1%
6 Month 5.3%
1 Year 9.4%
3 Year 7.6%
5 Year 6.2%
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 31 May 25

Asset Allocation
Asset ClassValue
Cash5.61%
Debt94.14%
Other0.25%
Debt Sector Allocation
SectorValue
Corporate61.49%
Government34.73%
Cash Equivalent3.54%
Credit Quality
RatingValue
AA9.89%
AAA90.11%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
7.32% Govt Stock 2030
Sovereign Bonds | -
6%₹506 Cr48,000,000
↓ -2,500,000
7.17% Govt Stock 2030
Sovereign Bonds | -
6%₹486 Cr46,500,000
7.02% Govt Stock 2031
Sovereign Bonds | -
3%₹260 Cr25,000,000
National Bank For Agriculture And Rural Development
Debentures | -
3%₹225 Cr22,000
↑ 8,500
Aditya Birla Housing Finance Limited
Debentures | -
2%₹203 Cr20,000
Bajaj Housing Finance Limited
Debentures | -
2%₹175 Cr17,500
↑ 17,500
Small Industries Development Bank Of India
Debentures | -
2%₹170 Cr16,500
National Bank For Agriculture And Rural Development
Debentures | -
2%₹170 Cr16,500
Can Fin Homes Limited
Debentures | -
2%₹167 Cr16,500
7.1% Govt Stock 2029
Sovereign Bonds | -
2%₹166 Cr16,000,000

5. 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 (18 Jul 25) ₹57.6699 ↑ 0.04   (0.07 %)
Net Assets (Cr) ₹10,697 on 31 May 25
Category Debt - Short term Bond
AMC IDFC Asset Management Company Limited
Rating
Risk Moderately Low
Expense Ratio 0.77
Sharpe Ratio 2.45
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 1,000
Exit Load NIL
Yield to Maturity 6.57%
Effective Maturity 3 Years 7 Months 10 Days
Modified Duration 2 Years 10 Months 10 Days

Growth of 10,000 investment over the years.

DateValue
30 Jun 20₹10,000
30 Jun 21₹10,458
30 Jun 22₹10,665
30 Jun 23₹11,365
30 Jun 24₹12,159
30 Jun 25₹13,288

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 ₹197,169.
Net Profit of ₹17,169
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 18 Jul 25

DurationReturns
1 Month 0.6%
3 Month 2.1%
6 Month 5.3%
1 Year 9.2%
3 Year 7.6%
5 Year 5.8%
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 1114.24 Yr.
Brijesh Shah10 Jun 240.98 Yr.

Data below for IDFC Bond Fund Short Term Plan as on 31 May 25

Asset Allocation
Asset ClassValue
Cash29.41%
Debt70.34%
Other0.25%
Debt Sector Allocation
SectorValue
Government47.82%
Corporate41.2%
Cash Equivalent10.73%
Credit Quality
RatingValue
AAA100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
7.18% Govt Stock 2033
Sovereign Bonds | -
20%₹2,116 Cr201,600,000
↑ 199,900,000
7.26% Govt Stock 2033
Sovereign Bonds | -
15%₹1,646 Cr156,200,000
↓ -30,200,000
Bajaj Housing Finance Limited
Debentures | -
5%₹482 Cr47,500,000
Tata Capital Limited
Debentures | -
4%₹445 Cr44,100,000
7.26% Govt Stock 2032
Sovereign Bonds | -
3%₹363 Cr34,500,000
↑ 34,500,000
Bajaj Finance Limited
Debentures | -
3%₹291 Cr29,000,000
LIC Housing Finance Ltd
Debentures | -
3%₹274 Cr27,000,000
Tata Capital Housing Finance Limited
Debentures | -
2%₹253 Cr25,000,000
LIC Housing Finance Ltd
Debentures | -
2%₹249 Cr24,500,000
Bajaj Housing Finance Limited
Debentures | -
2%₹177 Cr17,500,000

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.
How helpful was this page ?
Rated 4.9, based on 7 reviews.
POST A COMMENT