Best Money Market Mutual Funds in India (2025)
Money market funds in India have become a staple investment avenue in the financial market. These funds invest in short-term debt instruments such as commercial paper, treasury bills, and certificates of deposit, providing a steady stream of money market fund returns while maintaining a high level of liquidity. With their reputation for stability and minimal risk, money market funds have become a popular choice for investors seeking to optimise their short-term investments.
In this blog, we will explore the best money market funds in India and learn more about their features, benefits, risks, the meaning of Indian money market funds and how to invest in money market in India.
Top Money Market Funds In India Based on AUM
| Fund Name | Fund Size (in cr) | 3Y CAGR (In %) | 5Y CAGR (in %) |
|---|---|---|---|
| Tata Money Market Fund | ₹21,693.41 | 6.44 | 6.18 |
| Aditya Birla SL Money Manager Fund | ₹26,499.23 | 6.35 | 6.15 |
| HDFC Money Market Fund | ₹23,661.02 | 6.29 | 6.10 |
| HSBC Money Market Fund | ₹1,749.88 | 6.05 | 6.09 |
| Axis Money Market Fund | ₹10,632.98 | 6.33 | 6.09 |
| Nippon India Money Market Fund | ₹17,694.49 | 6.37 | 6.03 |
| SBI Savings Fund | ₹29,357.76 | 6.25 | 6.01 |
| ICICI Pru Money Market Fund | ₹26,267.60 | 6.25 | 5.99 |
| UTI Money Market Fund | ₹14,308.33 | 6.31 | 5.98 |
| Franklin India Money Market Fund | ₹1,467.42 | 6.14 | 5.90 |
Disclaimer: Please note that the above table is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing. The data is derived from Tickertape Stock Screener and is subject to real-time updates.
Note: The data in this list of money market funds, including the money funds share price is from 20th October 2025. This data is derived from the Tickertape Mutual Fund Screener.
🚀 Pro Tip: You can use Tickertape’s Mutual Fund Screener to research and evaluate funds with over 50+ pre-loaded filters and parameters.
Overview of Money Market Funds in India
Tata Money Market Fund
Tata Money Market Fund invests in high-quality short-term money market instruments. It focuses on providing liquidity, capital preservation, and stable money market fund returns through prudent portfolio management and low-interest rate risk.
SBI Savings Fund
SBI Savings Fund aims to deliver stable income and high liquidity by investing in money market and short-term debt instruments. It maintains low volatility while offering consistent short-term returns.
HDFC Money Market Fund
HDFC Money Market Fund invests in short-term money market instruments to provide steady income and liquidity. It focuses on credit quality and interest rate risk management for capital safety.
ICICI Pru Money Market Fund
ICICI Pru Money Market Fund offers low-risk, short-term money market fund investment options. It aims for stable income, liquidity, and preservation of capital for investors.
Kotak Money Market Fund
Kotak Money Market Fund invests in high-quality money market instruments to ensure safety, liquidity, and reasonable returns. It focuses on short-term money market fund investment with low credit and duration risk.
Aditya Birla SL Money Manager Fund
Aditya Birla SL Money Manager Fund focuses on generating steady returns by investing in short-term money market instruments. It maintains high liquidity and aims for capital preservation.
Nippon India Money Market Fund
Nippon India Money Market Fund invests in quality money market instruments with short maturities. It focuses on providing liquidity, safety of capital, and consistent income for investors.
Axis Money Market Fund
Axis Money Market Fund invests in short-term debt and money market instruments. It aims to deliver stability, high liquidity, and reasonable returns while minimising interest rate risk.
UTI Money Market Fund
UTI Money Market Fund provides high liquidity and stable returns by investing in short-term, high-quality instruments. It focuses on capital preservation and consistent performance.
Bandhan Money Market Fund
Bandhan Money Market Fund invests in short-term money market securities. It seeks to provide investors with regular income, liquidity, and low-risk returns through disciplined portfolio management.
Taxation on Money Market Funds
Money Market Funds fall under the debt mutual fund category for tax purposes. The taxation depends on the holding period of your money market fund investment.
| Type of Tax | Condition | Tax Rate | Additional Details |
| Short-Term Capital Gains (STCG) | Units held for less than 36 months | Taxed as per investor’s income slab | Added to total income for the financial year |
| Long-Term Capital Gains (LTCG) | Units held for 36 months or more | Taxed as per investor’s income slab | Indexation benefit removed from April 1, 2023 |
| Dividend Income | When dividend option is chosen | Taxed as per investor’s income slab | TDS applies if total dividend exceeds ₹5,000 in a financial year |
How to Invest in Money Market Funds?
You can easily start to invest in money market funds by following these steps:
- To invest in the best money market mutual funds, you can visit a mutual fund investment platform such as smallcase.
- The next step is to research and identify the money market mutual funds that match your financial goals. Tools like the Tickertape Mutual Fund Screener can help you filter and compare funds based on parameters such as returns, expense ratio, and fund size.
- Once you shortlist the funds, visit smallcase, log in, and search for the fund by name. You can then choose the investment mode, either a one-time lump sum or a money market mutual fund SIP, and complete the process.
However, if you’re confused about which stocks to pick, you can explore smallcases:
- smallcases are readymade model portfolios of stocks/ETFs, that are based on a theme idea or strategy
- They’re created and managed by SEBI-registered investment experts (also known as smallcase managers)
- smallcase offers over 500+ stock portfolios, created by 200+ managers
Here are a few popular smallcases among new investors:
Disclosures for aforementioned smallcases
What are Money Market Funds?
Money market funds are often called “money funds” or “money market mutual funds”. Money market funds are a type of mutual debt fund that is invested in short-term, high-quality debt instruments. They aim to provide investors with a safe place to invest their cash while earning a return that is typically higher than a regular savings account. Money market funds are designed to provide investors with a high level of liquidity and a very low level of risk. These funds are also commonly referred to as money market mutual funds.
How Money Market Funds Work?
- Investment Focus: These funds invest in short-term, high-quality instruments such as Treasury bills, certificates of deposit, and commercial papers.
- Maturity Period: Most instruments mature within a year, ensuring liquidity and stability.
- Portfolio Management: Fund managers balance safety, liquidity, and money market fund returns through active portfolio management.
- Income Source: The fund earns income from interest and small price changes in the underlying securities.
- Investor Benefit: Investors get low-risk, steady money market fund returns along with easy access to their invested money.
- NAV Movement: The fund’s net asset value (NAV) changes based on the combined performance of all underlying instruments.
Types of Money Market Funds
There are different types of money market instruments in the market, some of them are as follows:
- Treasury Bills (T-Bills): This is a type of money market fund that is a short-term government security with maturities of up to one year.
- Certificates of Deposit (CDs): Time deposits issued by banks with fixed interest rates and specific maturity dates.
- Commercial Paper: Unsecured, short-term debt issued by corporations to finance immediate liabilities.
- Repurchase Agreements: Short-term borrowing for dealers in government securities.
- Bankers’ Acceptances: Short-term credit investments created by a non-financial firm and guaranteed by a bank.
Benefits of Money Market Funds
Investing in money market funds comes with several advantages:
- Capital Preservation: Due to the low-risk nature of the investments, term money market funds are suitable for preserving capital.
- Accessibility: Investors can quickly access their funds, making these funds a convenient option for managing cash or short-term savings.
- Competitive Interest Rates: Indian money market funds can offer higher interest rates compared to traditional bank savings accounts.
- Flexibility: They can be used as a holding place for cash that may be needed in the short term. They can also be used as a buffer within a larger money market fund investment portfolio.
Risks Involved with Money Market Funds
While money market funds are considered low-risk, they are not without potential risks:
- Credit Risk: Although minimal, there is a risk that an issuer of a security held by the fund could default.
- Interest Rate Risk: Changes in interest rates can affect the yield of money market funds, although the impact is typically less due to the short-term nature of the investments.
- Liquidity Risk: In times of market stress, some money market funds may face challenges in meeting redemption requests if too many investors withdraw funds simultaneously.
- Inflation Risk: The returns on money market funds may not keep pace with inflation, potentially leading to a loss of purchasing power over time.
Factors to Consider Before Investing in Money Market Funds
- Fund’s Investment Strategy: Money market funds invest in short-term, high-quality instruments such as Treasury bills, commercial papers, and certificates of deposit.
- Expense Ratio: The expense ratio of a fund can affect its overall returns. It is important to review the expense ratio when comparing funds.
- Fund’s Credit Quality: The credit quality of the securities held by the fund may impact its risk level. Typically, funds invest in instruments with higher credit ratings for lower risk.
- Yield vs Risk: The yield of a money market fund is generally linked to the risk level. Funds with higher yields may carry higher risks.
- Liquidity: Money market funds generally provide liquidity, allowing investors to access their funds relatively easily, though conditions can vary.
- Duration of Investment: These funds are often used for short-term investments, as they aim to provide stable returns with low volatility over shorter periods.
- Taxation: Returns from money market funds are taxable. Investors may want to consider the tax implications of any gains generated by the fund.
Who Can Consider Investments in Money Market Funds?
- Risk-Averse Investors: Those seeking low-risk, stable money market fund returns with minimal fluctuations in principal.
- Short-Term Investors: Investors with short-term financial goals who require liquidity and quick access to their funds.
- Conservative Investors: Individuals looking for a safer alternative to stocks or longer-duration debt instruments, prioritizing capital preservation over high returns.
- Cash Reserves Seekers: Those who want to park their cash temporarily and earn higher returns than a regular savings account.
- Retirees or Income Seekers: Retirees or people looking for a steady, low-risk income stream can benefit from money market funds’ stable returns.
- Investors Diversifying Portfolio: Those who want to diversify their investment portfolios by adding low-risk, liquid assets.
To Wrap It Up…
High-Return Money Market Funds provide a conservative investment option, ideal for those who value safety and liquidity. By focusing on short-term, high-quality debt instruments, these funds offer stability, a steady income, and easy access to your capital. For investors looking to balance risk and returns while preserving their capital, Money Market Funds can be a practical choice. Exploring this option could help you enhance your financial security and achieve your investment goals with greater confidence. However, it is important to conduct thorough research and consult a financial advisor before investing.
Frequently Asked Questions (FAQs) on Money Market Funds
Based on the 5-yr CAGR, the top-rated market mutual funds to invest in India:
– Tata Money Market Fund
– SBI Savings Fund
– HDFC Money Market Fund
– ICICI Pru Money Market Fund
– Kotak Money Market Fund
Note: The data on this list has been taken on 20th October 2025.
Money market instruments are considered relatively safe. This is due to their investment in high-quality, short-term debt instruments, but they are not risk-free.
Money market funds carry low risk as they invest in secure, short-term instruments, but they are not entirely free from credit and interest rate risks.
Money market funds invest in short-term debt money market securities like T-bills, CDs, commercial paper, and repos.
The money market is a market for the trading of short-term debt securities. At the wholesale level, institutions and traders engage in frequent, high-volume transactions. At the retail level, individual investors participate by purchasing money market mutual funds in India or opening money markets accounts at banks.
Money Market Funds invest in short-term debt instruments with maturities up to 1 year, offering slightly higher returns and moderate risk. Liquid Funds invest in ultra-short-term instruments (up to 91 days), providing higher liquidity and lower returns. Both are low-risk, but liquid funds offer more immediate access to funds.
