1. UST funds are low duration funds with maturity of less than 1 year.
2. Investing in these instruments comes with very low risk compared to bond funds of longer duration like 2-3 years.
3. Also, since these schemes have very short tenure, changes in interest rates have a very low impact on the value of your investments.
4. You should go for an Systematic Investment Plan (SIP) in an ultra short-term fund, where you can expect returns which are mostly predictable.
5. Since most of these schemes have exit loads for redemption before 1-6 months, only those with a reasonable holding period invest in them.
6. It is ideal for parking short term surplus money,instead of letting the money remain idle in a savings bank account.
7. UST funds can also be used to create a Systematic Transfer Plan (STP), wherein a fixed amount can be transferred to an equity fund in a periodic manner.
8. An investor who leaves idle cash in a savings bank account earns only a pittance, but the same money in UST/short-term funds will earn a daily interest income, based on the market rates, providing an efficient vehicle for short-term investments.
2. Investing in these instruments comes with very low risk compared to bond funds of longer duration like 2-3 years.
3. Also, since these schemes have very short tenure, changes in interest rates have a very low impact on the value of your investments.
4. You should go for an Systematic Investment Plan (SIP) in an ultra short-term fund, where you can expect returns which are mostly predictable.
5. Since most of these schemes have exit loads for redemption before 1-6 months, only those with a reasonable holding period invest in them.
6. It is ideal for parking short term surplus money,instead of letting the money remain idle in a savings bank account.
7. UST funds can also be used to create a Systematic Transfer Plan (STP), wherein a fixed amount can be transferred to an equity fund in a periodic manner.
8. An investor who leaves idle cash in a savings bank account earns only a pittance, but the same money in UST/short-term funds will earn a daily interest income, based on the market rates, providing an efficient vehicle for short-term investments.