Overnight Fund is a kind of Debt Mutual Fund
Slide - 1
An overnight fund is a kind of debt mutual fund where mutual fund houses invest investors’ money in various money market instruments which have a maturity of only 1 day. It is an open-ended mutual fund scheme which means that an investor can invest and withdraw their funds anytime.
Slide - 2
1. Lenders - They are the investors in the scheme.
2. Mutual Fund Houses - The company which acts as a bridge between lender and borrower in this transaction.
3. Borrower - They borrow the funds that investors invest, and return it with interest.
4. CCIL - The Clearing Corporation of India Ltd. is responsible for the settlement of transactions between the lender and the borrower, as both parties may not know each other.
Slide – 3
Reasons to invest:
1. Low risk investment
3. Less volatile