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All you need to know about Bajaj Finserv Overnight Fund

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The Bajaj Finserv Overnight Fund is a debt fund managed by Bajaj Finserv Asset Management Limited. The scheme aims to provide reasonable returns commensurate with low risk and a high level of liquidity through investments made primarily in overnight securities having a maturity of 1 business day. However, there is no assurance that the investment objective of the Scheme will be achieved.

  • Table of contents
  1. What is Bajaj Finserv Overnight Fund?
  2. Suitability of overnight funds
  3. Features of Bajaj Finserv Overnight Fund
  4. Potential benefits of investing in Bajaj Finserv Overnight Fund

What is Bajaj Finserv Overnight Fund?

The Bajaj Finserv Overnight Fund is a debt fund that invests in debt and money market instruments with overnight or near-overnight maturities. This includes TREPS, Repo/Reverse Repo in Government securities, treasury bills, commercial papers, certificates of deposit, and government securities. The weighted average maturity of the portfolio is maintained at one day, ensuring highly liquid investments.

Moreover, the Bajaj Finserv Overnight Fund does not take credit risk and limits its exposures only to highest rated instruments. This conservative strategy aims to provide relative stability of investments and regular income.

Suitability of overnight funds

Overnight funds are the most liquid debt funds as they allow instant access to money without any lock-in period. They are suitable for parking funds for a very short duration until the money is required. Some common use cases are:

  • Emergency funds: One can invest their emergency corpus in overnight funds with the aim to earn returns than a savings account, while ensuring instant liquidity if the need arises. While returns of savings account tend to be fixed, returns from Overnight Funds are subject to market movement.
  • Investment opportunities: Funds waiting to be deployed for a few days can be invested to earn marginal returns instead of lying idle in a bank account.
  • Short-term parking of funds: Investors who have to pay fees, bills or taxes shortly can use an overnight fund to generate some income during the waiting period.

However, an overnight fund is not suitable for long-term wealth creation due to its extremely conservative profile. Only surplus short-term cash balances which are not needed for more than a couple of weeks should be invested.

Features of Bajaj Finserv Overnight Fund

Some key features of the Bajaj Finserv Overnight Fund include:

  • No lock-in period: Investments can be redeemed anytime without any notice period.
  • High liquidity: At least 95% of assets are invested in instruments with overnight maturity to ensure same-day liquidity.
  • Low risk: Focuses only on the highest rated debt instruments to maintain relative capital stability.

Potential benefits of investing in Bajaj Finserv Overnight Fund

  • High liquidity: Overnight funds ensure very high levels of liquidity by maintaining at least 95% of the portfolio in overnight maturity instruments like treasury bills or commercial papers. This allows investors to redeem their money instantly without any notice period requirement or exit loads. Such on-demand liquidity makes overnight funds suitable for short-term cash balances that may be needed urgently.
  • Marginal returns over savings bank: While overnight funds only aim to offer nominal returns, they have historically delivered marginally superior yields compared to savings bank interest rates after factoring in tax benefits. However, returns of savings account tend to be fixed as compared to Overnight Fund that will be subject to market movement.
  • Less impact on capital: Overnight funds generally have the option to invest up to 100% in highest credit rated money market instruments with one business day maturity. The ultra-short duration ensures that the debt papers purchased do not fluctuate much in value if interest rates change suddenly. This makes capital erosion due to defaults or interest rate risks highly unlikely.


The Bajaj Finserv Overnight Fund can be a suitable investment option for parking temporary idle cash balances and generating marginal returns superior to a savings bank account at a risk higher than savings account. Investors looking for limited impact on capital with nominal returns over a very short-term should consider this fund for their investment portfolio. However, it is not meant for long-term wealth creation due to a conservative nature. Always remember to consult a financial advisor when in doubt about any investment decisions.

Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
This document should not be treated as an endorsement of the views/opinions or as investment advice. This document should not be construed as a research report or a recommendation to buy or sell any security. This document is for information purposes only and should not be construed as a promise on minimum returns or safeguard of capital. This document alone is not sufficient and should not be used for the development or implementation of an investment strategy. The recipient should note and understand that the information provided above may not contain all the material aspects relevant for making an investment decision. Investors are advised to consult their own investment advisor before making any investment decision in light of their risk appetite, investment goals, and horizon. This information is subject to change without any prior notice.