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Overnight funds for salaried professionals: Parking funds for short term

Overnight fund
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For many salaried professionals, managing finances effectively is a challenge as well as a key aspect of achieving financial goals and a stable future. When it comes to short-term parking of funds, overnight funds have emerged as a suitable option.

In this article, we will explore the fundamentals of short-term parking of funds and understand the features of overnight funds. We also discuss the factors to consider before investing in these funds and provide insights for salaried professionals seeking to optimise their financial strategies.

  • Table of contents
  1. Understanding short-term parking of fund
  2. Features and characteristics of overnight funds
  3. Factors to consider before investing in overnight funds
  4. FAQ

Understanding short-term parking of fund

Short-term parking of funds involves strategically investing money for relatively brief periods to generate returns that can be used for immediate or near-future financial goals. This could include building an emergency fund, saving for a down payment on a home, or planning for a dream vacation.

The key to short-term parking of funds lies in selecting investment options that balance stability, liquidity, and returns. Salaried professionals, with their regular income, can reap the benefits of short-term investments to potentially grow their wealth over time. For example, Bajaj Finserv AMC has launched the Bajaj Finserv Overnight Fund. The scheme invests in money market and debt instruments with overnight maturity. It can be considered by investors who seek a regular income over the short term that may be in line with the overnight call rates. For a detailed scheme information, click here.

Features and characteristics of overnight funds

Very short duration

Overnight funds belong to the category of debt mutual funds and are known for their Very short duration. Unlike long-term investments, overnight funds invest in very short-term debt instruments with maturities of one day.

Low-interest rate risk

These funds primarily invest in instruments with a very short maturity, which means they are less reactive to interest rate fluctuations compared to longer-term debt funds. This characteristic can be particularly appealing when interest rates are uncertain.

Liquidity and relative stability

Overnight funds focus on highly liquid and stable instruments like Treasury Bills Repurchase. This ensures that the investor's money is readily available, and the risk associated with sudden market changes is minimised.

Factors to consider before investing in overnight funds

Investment horizon

Overnight funds are ideal for those with a short investment horizon. If you have a longer-term goal, other investment options may be more suitable.

Risk tolerance

While overnight funds are considered low risk, it's essential to assess your own risk tolerance. Even though the risk is minimal, understanding your comfort level with potential fluctuations can help you make informed investment decisions.

Returns expectation

Overnight funds offer reasonable returns compared to riskier investment options. If you are seeking a higher return potential and willing to accept higher risks, you may need to explore alternative investment avenues.

Financial goals

Clearly define your short-term financial goals before investing in overnight funds. Whether it's building an emergency fund or saving for a specific expense, align your investment strategy with your financial objectives.


Overnight funds present a suitable option for salaried professionals aiming to park funds for short term while minimising risk. These funds offer a unique combination of relative stability, liquidity, and potential returns, making them suitable for individuals with a specific time horizon and risk appetite. By understanding the features and factors associated with overnight funds, salaried professionals can make informed investment decisions that align with their financial goals.


What are overnight funds?
Overnight funds are a type of debt mutual fund that primarily invests in very short-term debt instruments with maturities of one day. These funds are known for their very short duration, providing investors with a relatively low-risk option for reasonable return potential in short-term.

How do overnight funds differ from other short-term investment options?
Unlike other short-term investment options, overnight funds focus on extremely short-term debt instruments, often maturing within a day. This very short duration minimizes interest rate risk and provides high liquidity. Other short-term options may have longer maturities and could involve higher risk or lower liquidity.

What is the risk associated with investing in overnight funds?
Overnight funds are considered low-risk due to their focus on very short-term debt instruments. However, as with any investment, there is still a degree of risk. Investors should be aware of potential fluctuations in the market and understand their own risk tolerance before investing.

Can salaried professionals invest in overnight funds?
Yes, salaried professionals can invest in overnight funds. In fact, these funds can be particularly suitable for individuals with a regular income looking to create reasonable return in short-term. Before investing, it's essential for salaried professionals to consider factors such as their investment horizon, risk tolerance, and specific financial goals.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
This document should not be treated as 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 purpose 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.