Ultra short duration funds in India

26 live funds in the Ultra Short Duration category, ordered by 5-year return, highest first; Nippon India Ultra Short Term Fund leads. Funds younger than five years follow by name. Returns are for the plan each fund's page leads with, Direct where the fund has one, to each fund's latest NAV, the newest of them on 27 Oct 2026; 3 and 5 year returns are a year, compounded.

Ultra Short Duration funds

Size is the average money the fund managed over its latest quarter. Cost is its yearly expense ratio.Filter them in the screener

NAV of 27 Oct 2026

Tax on ultra short duration funds

Gains on units bought on or after 1 Apr 2023 are taxed at the income tax slab rate however long they are held; gains on units bought earlier are taxed at 12.5% when held over 24 months, or over 12 months for a listed fund such as an ETF, and at the slab rate otherwise.

Rules in force from 23 Jul 2024, checked 27 Oct 2026. Surcharge and cess are not included.

About ultra short duration funds in India

Ultra short duration funds in India are open-ended debt mutual funds whose portfolio has a Macaulay duration of 3 to 6 months. That band places the category between liquid funds and short term funds. Since SEBI's circular of 26 Feb 2026, its official name is Ultra Short Term Fund.

What SEBI requires

SEBI requires an ultra short duration fund to invest in debt and money market instruments so that the Macaulay duration of the portfolio is between 3 months and 6 months. Macaulay duration is the average time, weighted by cash flows, in which the money put into the portfolio is repaid.

The test applies to the whole portfolio, not to each bond, so a fund can hold some longer bonds if shorter ones bring the average inside the band. Rating limits are not fixed by the category.

Duration and interest rates

Duration also estimates how far a fund's NAV (net asset value, the price of one unit) moves when yields change. A duration of 6 months, or 0.5 years, means a loss of roughly 0.5% for each 1 percentage point rise in yields, and a similar gain when yields fall.

The band is short, so the NAV moves in small steps. Credit quality of the bonds held still affects the NAV, because a downgrade or default lowers the value of that holding.

Neighbouring categories

Liquid funds hold securities maturing within 91 days and overnight funds lend for 1 day. Money market funds are set by maturity, up to 1 year, not by duration. Ultra short to short term funds (formerly low duration) sit above this category at 6 to 12 months, and short term funds at 1 to 3 years.

Ultra short duration is the first of the categories that SEBI defines by duration, so a fund here is not limited to instruments maturing within a set number of days.

Tax on gains

For units bought on or after 1 Apr 2023, gains on a fund that holds mostly debt are taxed at the holder's income tax slab rate, whatever the holding period, with no indexation. Units bought earlier follow the older holding-period rules.

How the page lists funds

The page lists every live fund in the category with its latest NAV, returns over 1, 3 and 5 years, size and cost. Each fund is shown by its Direct plan where one exists. The 3-year and 5-year returns are annualised, meaning compounded per year.

Funds are sorted by 5-year return, highest first. Funds with less than five years of history follow, sorted by name, and a dash marks a period without enough history. Size is the average money the fund managed over its latest quarter, and cost is its yearly expense ratio.