Best Mutual Fund Plans for 1 Year in India: Top Short Term, High Return Funds
Mutual funds offer a variety of investment options for both short-term and long-term investors. Except for ELSS, most mutual fund schemes have no mandatory lock-in period. This flexibility helps investors benefit from market changes and allows them to enter or exit schemes easily, reducing major transaction costs. Hence, mutual fund schemes like SIP investment plans and their returns suit different types of investors. The next section explains the best investment plan for one year and lists the top 10 mutual funds suitable for a one-year investment period.
List of Top 10 Mutual Funds for 1 Year
Here is an educational list of the best investment plans for 1 year:
| Fund Name | Sub Category | AUM (Rs. in cr.) | Expense Ratio (%) | Absolute Returns - 1Y (%) |
|---|---|---|---|---|
| WOC Pharma and Healthcare Fund | Sectoral Fund - Pharma & Health Care | 320.45 | 0.68 | 29.73 |
| HDFC Pharma and Healthcare Fund | Sectoral Fund - Pharma & Health Care | 1,666.36 | 0.83 | 28.48 |
| SBI LT Advantage Fund-V | Equity Linked Savings Scheme (ELSS) | 362.08 | 0.00 | 27.63 |
| DSP Banking & Financial Services Fund | Sectoral Fund - Banks & Financial Services | 1,209.60 | 0.71 | 26.77 |
| Motilal Oswal Large Cap Fund | Large Cap Fund | 2,149.71 | 0.80 | 24.12 |
| Kotak Nifty Financial Services Ex-Bank Index Fund | Index Fund | 49.37 | 0.22 | 24.01 |
| ICICI Pru Pharma Healthcare & Diagnostics (P.H.D) Fund | Sectoral Fund - Pharma & Health Care | 5,295.32 | 1.07 | 23.37 |
| SBI Healthcare Opp Fund | Sectoral Fund - Pharma & Health Care | 3,670.62 | 0.90 | 22.51 |
| WOC Banking & Financial Services Fund | Sectoral Fund - Banks & Financial Services | 393.55 | 0.68 | 22.03 |
| UTI Healthcare Fund | Sectoral Fund - Pharma & Health Care | 1,037.49 | 1.20 | 21.99 |
Note: The data on the top mutual funds list for 1 year is from 20th October 2025. This data is derived from the Tickertape Mutual Funds Screener.
- Plan: Growth
- Absolute Retuns for 1-Year: Sorted from Highest to Lowest
🚀 Pro Tip: You can use Tickertape’s Mutual Fund Screener to research and evaluate funds with over 50+ pre-loaded filters and parameters.
Best Investment Plan for 1 Year: An Overview
DSP World Gold Mining Overseas Equity Omni FoF
DSP World Gold Mining Overseas Equity Omni FoF invests in global gold mining companies, providing exposure to the world’s largest gold producers. It aims to benefit from long-term growth in the precious metals sector.
Mirae Asset NYSE FANG+ETF FoF
Mirae Asset NYSE FANG+ETF FoF invests in high-growth technology companies listed on the NYSE, focusing on the FANG stocks. It seeks to capitalise on the performance of leading companies in the digital space.
Edelweiss Gold and Silver ETF FoF
Edelweiss Gold and Silver ETF FoF provides exposure to gold and silver ETFs, aiming to offer investors diversification in precious metals. It targets long-term growth through asset appreciation and safe-haven properties.
SBI Silver ETF FOF
SBI Silver ETF FoF invests in silver ETFs, providing investors with exposure to silver as a commodity. It aims to offer diversification while leveraging silver’s potential for long-term growth in a stable market environment.
Nippon India Silver ETF FOF
Nippon India Silver ETF FoF invests in silver ETFs, focusing on gaining exposure to silver as an asset class. It aims to deliver returns from the silver market while providing stability and mitigating risk for investors.
Axis Silver FoF
Axis Silver FoF invests in silver ETFs, offering a low-cost way to gain exposure to silver. It aims to provide diversification in the precious metals space while seeking long-term capital growth and stability.
Tata Silver ETF FoF
Tata Silver ETF FoF provides exposure to silver through investments in silver ETFs. The fund aims for capital appreciation by tracking the performance of silver markets, offering a secure option for conservative investors seeking diversification.
UTI Silver ETF FoF
UTI Silver ETF FoF invests in silver ETFs, offering exposure to silver’s price movement. It seeks long-term growth by providing a safe and diversified investment option within the precious metals sector.
Aditya Birla SL Silver ETF FOF
Aditya Birla SL Silver ETF FoF offers exposure to silver through ETFs. The fund aims to provide capital appreciation by tracking the performance of the silver market, making it a diversified and low-risk investment choice.
ICICI Pru Silver ETF FOF
ICICI Pru Silver ETF FoF invests in silver ETFs, providing exposure to silver’s price dynamics. The fund aims to deliver long-term returns by leveraging the growth potential of silver markets while maintaining stable risk exposure.
What is the Best Investment Plan for 1 Year?
Short-term funds, such as liquid funds, ultra-short-term funds, and low-duration funds, are types of mutual funds with a brief maturity period, typically ranging from 1 to 3 years. These short-term mutual fund investment plans, which last for 1 year, invest in low-risk, high-quality assets to generate better returns for investors. The fund’s maturity matches that of its underlying assets, and since these funds are open-ended, investors can enter the market at any time.
Taxation on the Best Mutual Funds for 1 Year as per Union Budget 2024-25
As per the Union Budget 2024–25, taxation on mutual funds for a 1-year investment horizon has undergone significant changes. Here’s a detailed breakdown:
| Fund Type | Tax on Short-Term Capital Gains (STCG) | Tax on Long-Term Capital Gains (LTCG) | Exemption/Additional Notes |
| Equity-Oriented Mutual Funds | Taxed at 20% if sold within 12 months. | Taxed at 12.5% if held for more than 12 months. | Exemption up to ₹1.25 lakh LTCG per year. |
| Debt-Oriented Mutual Funds | Taxed as per income tax slab (applicable to all holding periods after April 1, 2023). | Taxed at 12.5% if held for more than 24 months. | No indexation benefit for LTCG. |
| Hybrid Mutual Funds (Equity > 65%) | Taxed as equity funds. | Taxed as equity funds. | Same tax as equity funds. |
| Hybrid Mutual Funds (Debt > 65%) | Taxed as per income tax slab for holding ≤ 24 months. | Taxed at 12.5% if held for more than 24 months. | No indexation benefit for LTCG. |
How to Invest in Best Mutual Funds for 1 Year?
You can easily start to invest in mutual funds by following these steps:
- To invest in the best mutual funds, you can visit a mutual fund investment platform such as smallcase.
- The next step is to research and identify the 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 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
How do Mutual Funds for 1 Year Work?
- Investment Pooling: Mutual funds collect money from many investors over one year and create a diversified portfolio. They typically invest in short-term fixed-income options, such as Treasury bills, bonds, and money market instruments.
- Objectives: These funds aim to protect capital and generate modest returns in a short time. Investors can invest through a lumpsum or SIP method.
- Professional Management: Experienced fund managers make timely investment decisions and handle market changes to increase returns.
- Returns Distribution: Investors receive returns based on the amount they invested in the fund.
- Market Impact: Interest rate changes and overall market conditions can influence the fund’s performance and final returns.
- Liquidity and Risk: These funds provide liquidity and professional management. Investors should check their financial goals, risk capacity, and the fund’s strategy before investing.
Types of MFs for 1 Year Investments
Explore six active options for 1-year mutual fund investments suitable for short-term goals, focusing on SIP investment plans and returns to meet your financial objectives within a year.
- Liquid Funds: These funds work best for short-term parking up to one year. Investors put money in money market instruments that mature within 90 days. The short holding period reduces price risk, making it an appealing one-time 1-year investment plan with high returns.
- Ultra-Short Duration Funds: These funds employ a duration-based approach, focusing on debt securities that mature within 3 to 6 months. They suit investors who want flexibility and safety in their 1-year investment plans. The best ultra-short-duration mutual funds can help you effectively meet your short-term goals.
- Low Duration Funds: These funds invest in securities that mature in 6 to 12 months. They balance risk and return, making them reliable choices for 1-year investment strategies. Investors seeking short-term mutual fund options may consider these for stable returns.
- Money Market Funds: Investors choose these funds for 1-year investment options in the share market. They focus on instruments that mature within a year. The funds are highly liquid and carry low credit risk, making them suitable for short-term investments of 3 months or more.
- Floater Funds: These debt funds invest at least 65% of their assets in floating-rate bonds. They adjust returns in response to market interest rate changes, making them a smart choice when rates rise. Many investors see them as the best 3-month short-term mutual funds during volatile markets.
- Arbitrage Funds: These funds capitalise on price discrepancies between cash and derivative markets. They work like debt funds but fall in the hybrid category. Arbitrage funds serve as dependable short-term investment options with high returns, suitable for parking money for up to one year.
Who Should Invest in Mutual Funds for 1 Year Investments?
- Short-Term Investors: Short-term investors can choose mutual funds if they have financial goals within a year, such as saving for a planned expense or achieving short-term objectives.
- Conservative Investors: Conservative investors may find them helpful when seeking low-risk options to protect their capital while earning moderate returns over a short period.
- Liquidity Seekers: Liquidity seekers can invest in them when they want easy access to their money within a year and expect better returns than a regular savings account.
- Tax-Sensitive Investors: Tax-sensitive investors can choose them to manage short-term capital gains and still benefit from expert fund management.
- Diversification Seekers: Diversification seekers can utilise them to spread their investment across different sectors without locking in their money for a long time and still enjoy the benefits of professional management.
Before investing in mutual funds for a year, investors must carefully research and understand their risk level, and then match their strategy with their financial goals.
Benefits of Investing in the Best Investment Plan for 1 Year
Short-term mutual funds offer numerous benefits and are a suitable choice for investors seeking stability and prompt access to their funds.
- Reduced Volatility and Lower Risk: Short-term mutual funds help reduce exposure to high volatility, offering lower-risk investments. They typically focus on low-risk assets, providing stability and capital protection.
- Liquidity in Emergencies: These funds offer easy access to money during emergencies, providing peace of mind and financial security when needed most.
- Stable Returns in a Short Timeframe: One-year mutual funds offer consistent, reasonable returns over a short period, making them appealing for those seeking quicker results without long-term market risks.
- Diversification Opportunities: Investing in 1-year SIP plans offers diversification, spreading risk across debt and money market instruments for better portfolio stability and exposure to various market sectors.
Risks Involved While Investing in the Best Investment Plan for 1 Year
When considering mutual funds for short-term gains, it is essential to navigate the potential risks associated with such ventures. Here are key considerations to bear in mind:
- Market Volatility: Even the best-performing mutual funds experience market volatility as prices change quickly. Economic events or market movements can affect a 1-year investment horizon.
- Liquidity Risk: Some short-term investments may struggle with liquidity during market stress. Heavy redemptions can reduce returns.
- Interest Rate Fluctuations: Debt funds used for short-term investments react to changes in interest rates. These rate movements directly affect returns.
- Currency Risk for International Funds: Exchange rate changes and foreign market conditions can influence returns in international funds. Studying these factors helps evaluate the risks of investing in international short-term funds.
Factors to Consider Before Investing in the Best Investment Plan for 1 Year
Before investing in short term mutual funds in India, consider these crucial factors:
- Define Your Investment Goal: Start by clearly identifying your investment goal. If you aim for short-term gains, you can choose SIP investment plans with shorter durations. Systematic investments usually match specific time frames based on individual goals.
- Evaluate Your Risk Profile: Take an online test or consult an advisor to evaluate your risk tolerance. This helps you align your investments with your personal risk profile and ensures that selected products match your comfort level.
- Understand Tax Implications: Consider capital gains tax that applies to short-term funds held for less than 3 years. This helps you plan better when choosing mutual funds for short-term investing.
- Assess Fund Performance: One-year funds usually invest in lower-risk bonds and offer returns between 4% and 6%. You can use performance data to decide whether a fund fits your short-term investment goals.
- Consider Expense Ratio: Check the expense ratio that shows the management fees charged by a fund. Lower ratios can help you earn better returns over time, especially in short-term investments.
- Navigate Entry and Exit Loads: Be aware of entry and exit loads applied when buying or selling SIP plans. These fees range from 0% to 3%, and understanding them helps you measure their effect on your short-term fund returns.
To Wrap It Up…
Assessing key financial metrics and related factors when investing in a SIP investment plan for 1 year can offer valuable insights into potential returns and risks. While these factors can help guide investment decisions, it is important to remember that past performance does not guarantee future results. Mutual fund investments, including SIPs, carry market risks, which can lead to fluctuating returns based on market conditions. Therefore, careful consideration of your financial goals and risk tolerance is essential.
Looking for a Loan Against Mutual Funds (LAMF)? Explore LAMF on smallcase –
You can now apply for a loan against mutual funds (LAMF) on smallcase. Explore the quick and paperless process with the following articles about the eligibility criteria, documents required, features, benefits and more on LAMF at smallcase!
Frequently Asked Questions About the Best Mutual Funds for 1 Year
To thrive in a one-year investment span, investors can strike a balance between capital safety and liquidity when venturing into mutual funds. For a mutual fund for 1 year, steady returns are possible, though all mutual funds remain subject to market risks.
The best short-term investment plan for one year typically allocates funds to low-risk instruments, prioritising capital preservation and liquidity. These funds often invest in stable, short-term assets to generate reasonable returns within a brief timeframe.
The returns on the highest return mutual fund in 1 year can vary based on market conditions and the investment type chosen. Selecting a plan aligned with your financial goals and risk tolerance is key to achieving optimal returns.
You may consider investing in a SIP investment plan for 1 year when you are looking for a short-term financial strategy. Aligning your investment timing with your goals and market conditions is crucial for achieving the best possible results.
The mutual funds SIP investment plan for one year typically doesn’t have a lock-in period, offering flexibility to withdraw funds within the one-year timeframe without any restrictions.
