Top Ultra Short Debt Funds Rated by FINCASH for 2025 - 2026

Updated on August 27, 2025 , 2317 views

Ultra Short Term Debt fund are highly suitable for a short-term Investment plan. These funds invest in debt instruments that have an average maturity of more than 91 days. Comparitive to Fixed Depoists, these funds provide better returns. FDs have a predetermined interest rate which does not change with the due course of time. However, in case of Ultra short term funds, the returns are variable depending on the performance of the scheme. Currently, as per FY 2017-18, the FD rates Range between 6%-7% p.a. whereas, in case of Ultra Short Term fund, the returns ranged approximately more than 7.4% p.a.

Investors who are looking to park their money for a year or less can ideally invest in this scheme. To earn better returns, one can invest in below-mentioned top-performing Ultra Short Term Debt Funds that have constantly performed well in the Market.

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Top Rated Ultra Short Debt Funds

Fund	NAV	Net Assets (Cr)	Rating	3 MO (%)	6 MO (%)	1 YR (%)	3 YR (%)	2024 (%)	Debt Yield (YTM)	Mod. Duration	Eff. Maturity	Exit Load
Aditya Birla Sun Life Savings Fund Growth	₹554.641 ↑ 0.03	₹20,795	☆☆☆☆☆	1.7	4	7.9	7.4	7.9	6.6%	5M 26D	7M 2D	NIL
Kotak Savings Fund Growth	₹43.3175 ↓ 0.00	₹15,954	☆☆☆	1.5	3.7	7.2	6.9	7.2	6.36%	5M 19D	6M	NIL
SBI Magnum Ultra Short Duration Fund Growth	₹6,037.61 ↑ 0.50	₹15,902	☆☆☆	1.6	3.7	7.4	7.1	7.4	6.13%	4M 20D	5M 12D	NIL
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 29 Aug 25

Research Highlights & Commentary of 3 Funds showcased

Commentary	Aditya Birla Sun Life Savings Fund	Kotak Savings Fund	SBI Magnum Ultra Short Duration Fund
Point 1	Highest AUM (₹20,795 Cr).	Lower mid AUM (₹15,954 Cr).	Bottom quartile AUM (₹15,902 Cr).
Point 2	Established history (22+ yrs).	Established history (21+ yrs).	Oldest track record among peers (26 yrs).
Point 3	Top rated.	Rating: 3★ (lower mid).	Rating: 3★ (bottom quartile).
Point 4	Risk profile: Moderately Low.	Risk profile: Moderately Low.	Risk profile: Low.
Point 5	1Y return: 7.94% (upper mid).	1Y return: 7.22% (bottom quartile).	1Y return: 7.37% (lower mid).
Point 6	1M return: 0.45% (upper mid).	1M return: 0.42% (bottom quartile).	1M return: 0.45% (lower mid).
Point 7	Sharpe: 3.76 (upper mid).	Sharpe: 2.11 (bottom quartile).	Sharpe: 2.77 (lower mid).
Point 8	Information ratio: 0.00 (upper mid).	Information ratio: 0.00 (lower mid).	Information ratio: 0.00 (bottom quartile).
Point 9	Yield to maturity (debt): 6.60% (upper mid).	Yield to maturity (debt): 6.36% (lower mid).	Yield to maturity (debt): 6.13% (bottom quartile).
Point 10	Modified duration: 0.49 yrs (bottom quartile).	Modified duration: 0.47 yrs (lower mid).	Modified duration: 0.39 yrs (upper mid).

Aditya Birla Sun Life Savings Fund

Highest AUM (₹20,795 Cr).
Established history (22+ yrs).
Top rated.
Risk profile: Moderately Low.
1Y return: 7.94% (upper mid).
1M return: 0.45% (upper mid).
Sharpe: 3.76 (upper mid).
Information ratio: 0.00 (upper mid).
Yield to maturity (debt): 6.60% (upper mid).
Modified duration: 0.49 yrs (bottom quartile).

Kotak Savings Fund

Lower mid AUM (₹15,954 Cr).
Established history (21+ yrs).
Rating: 3★ (lower mid).
Risk profile: Moderately Low.
1Y return: 7.22% (bottom quartile).
1M return: 0.42% (bottom quartile).
Sharpe: 2.11 (bottom quartile).
Information ratio: 0.00 (lower mid).
Yield to maturity (debt): 6.36% (lower mid).
Modified duration: 0.47 yrs (lower mid).

SBI Magnum Ultra Short Duration Fund

Bottom quartile AUM (₹15,902 Cr).
Oldest track record among peers (26 yrs).
Rating: 3★ (bottom quartile).
Risk profile: Low.
1Y return: 7.37% (lower mid).
1M return: 0.45% (lower mid).
Sharpe: 2.77 (lower mid).
Information ratio: 0.00 (bottom quartile).
Yield to maturity (debt): 6.13% (bottom quartile).
Modified duration: 0.39 yrs (upper mid).

Why Are These Top Performers?

Fincash has employed the following parameters for shortlisting the top performing funds:

Past Returns: Return analysis of last 3 years
Parameters & Weights: Information ratio with some modifications for our ratings and rankings
Qualitative & Quantitative Analysis: Quantitative measures like average maturity, credit quality, expense ratio, etc., including fund age and the size of the fund has been considered. Qualitative analysis like the reputation of the fund along with the fund manager is one of the important parameters that you would see in the listed funds.
Asset Size: The minimum AUM criteria for debt Mutual Funds are INR 100 Crores with some exceptions at times for new funds that are doing well in the market.
Performance with Respect to Benchmark: Peer average

Smart Tips to Invest in Ultra Short Debt Funds

Some of the important tips to consider while Investing in ultra-short funds are:

Investment Tenure: Investors planning to invest in ultra-short debt funds should stay invested for minimum 3 months and more.
Invest via a SIP: SIP or Systematic Investment Plan is the most efficient way to invest in a Mutual Fund. They not only provide a systematic way of investing, but also ensures regular investment growth. You can invest in a SIP with an amount as low as INR 500.

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.