line
Use App
Home
Mutual FundsDebt FundsBest Floater Funds

Floater Mutual Funds

Average 3-Year Return

0.00 %

No. of Funds

0

Floater Funds are a type of debt funds that invest mainly in floating-rate debt securities. These securities have variable interest rates that are reset periodically based on market conditions and opportunities. While these are the best Floater Mutual Funds to invest in, you must know these 3 things before you start investing. Read More...

Best Floater Funds to Invest in 2024

Returns on Floater Funds

Total Investment

₹ 0

Gain

₹ 0

Current Value

₹ 0

You have invested

Check the Returns of Your Investment in

About Floater Funds

Debt instruments are the favored fixed-income instruments as they give consistent returns. They offer a fixed interest rate received upon maturity. However, there are some debt instruments where the interest rate is not fixed and is instead determined by changes in their benchmark. These types of instruments are known as Floater Funds. Here are the main features of Floater Funds:
  1. Investment Portfolio: A Floater Fund is a particular kind of mutual fund that invests around 65% of its assets in debt instruments with variable interest rates.
  2. Diversification: Investment decisions by fund managers are influenced by interest rates and business cycles. These funds invest in various debt securities, including corporate bonds, T-bills, certificates of deposit, and so on.
  3. Open-Ended Scheme: Floater funds are open-ended schemes, meaning that there are no limitations on trading. However, floating funds only allow lump-sum investments and do not provide SIP. As a result, timing is crucial to making the most of the market.
  4. Volatility: Floating Rate Funds usually generate competitively better long-term returns. Compared to short-term debt funds, these funds are less prone to changes in short-term interest rates.
It is important to keep in mind that Floater Funds tend to be more volatile funds in contrast to fixed-income funds. As a result, it is usually advised to check your investing objectives and risk tolerance.
Floater Funds, also known as floating rate funds, can benefit you, depending on your risk tolerance and financial objectives. Here are the few potential advantages of floater funds:
  1. Interest Rate Resilience: One of the key benefits of Floating-rate Funds is that they are less prone to fluctuations in interest rates than fixed-rate securities. Returns on such investments fluctuate in line with interest rates, which may minimize interest rate risk.
  2. Superior Returns: Floater Funds attempt to make investments in debt securities that support floating interest rate schemes. During a favorable shift in interest rates, these funds can generate higher returns.
  3. Income Generation: Interest payments from the underlying securities are usually the source of income for Floating-rate Funds. If you are looking for a steady source of income, then you may find this appealing.
  4. Strategic Allocation: The majority of the allocation of Floater Funds is made up of debt instruments with floating interest rates, and the remainder goes towards fixed-income securities. Due to this diversity, you are able to benefit more from the shifting interest rate regime.
It's important to remember that, despite these benefits, Floating Funds come with risks. These risks include credit risk and the possibility of lower returns in an environment where interest rates are falling. So, make a thorough research before making a final investment.
Depending on your financial goals, risk tolerance, and market conditions, you may find that investing in Floater Funds can be a good fit or not. You can use the following factors to assess whether floater funds are a suitable match for your investing strategy:
  1. Regular Income: If you are looking for an investment option with regular income generation, Floater Funds are a perfect choice. They usually earn income through monthly interest payments from the underlying securities.
  2. Time Horizon: These funds can be a suitable option for you if you have a medium-to-long-term horizon. Along with preserving your capital and promoting portfolio stability, it gives you good profits.
  3. Diversification: If you want to expose yourself to a different market segment and diversify your portfolio, you can invest in these funds. Investing in floater funds can balance your portfolio, especially if you have a major investment in equity funds.
It becomes important to remember that the returns on your Floater Fund investment are dependent upon the market conditions. The RBI sets the repo rate based on the country's economic circumstances. If the interest rate declines, your investment in a Floater Fund may yield lower returns than funds with fixed returns.
Floater Funds are one of the most favored options, especially by conservative investors. Here are some considerations to know, if floater funds are the right choice for you:
  1. Risk Tolerance: Investing in debt securities makes Floating-rate Funds appropriate for investors with low-risk tolerance. Floater Funds are a less risky and safer investment option in comparison to equity funds.
  2. Additional Income Source: Floater Funds can be a viable option if you are looking for an additional source of income. Also, adding it to your portfolio can provide diversification and spread your risk.
  3. Stability: Floater Funds can be suitable for you if you seek less volatile fixed-income options. Because they invest in high-quality debt products with good ratings, these funds are comparatively stable.
  4. Higher Returns: Floater Funds may generate superior returns than fixed-interest-rate debt products. If interest rates are expected to rise, you can consider putting funds in this avenue to take advantage of the rising interest rate scenario.
You should research the market economy before making an investment. It's important to keep in mind that interest rates tend to fluctuate as per the economic conditions of the country. This can have both a positive and a negative impact on the investment.
Debt instruments are the favored fixed-income instruments as they give consistent returns. They offer a fixed interest rate received upon maturity. However, there are some debt instruments where the interest rate is not fixed and is instead determined by changes in their benchmark. These types of instruments are known as Floater Funds. Here are the main features of Floater Funds:
  1. Investment Portfolio: A Floater Fund is a particular kind of mutual fund that invests around 65% of its assets in debt instruments with variable interest rates.
  2. Diversification: Investment decisions by fund managers are influenced by interest rates and business cycles. These funds invest in various debt securities, including corporate bonds, T-bills, certificates of deposit, and so on.
  3. Open-Ended Scheme: Floater funds are open-ended schemes, meaning that there are no limitations on trading. However, floating funds only allow lump-sum investments and do not provide SIP. As a result, timing is crucial to making the most of the market.
  4. Volatility: Floating Rate Funds usually generate competitively better long-term returns. Compared to short-term debt funds, these funds are less prone to changes in short-term interest rates.
It is important to keep in mind that Floater Funds tend to be more volatile funds in contrast to fixed-income funds. As a result, it is usually advised to check your investing objectives and risk tolerance.
Floater Funds, also known as floating rate funds, can benefit you, depending on your risk tolerance and financial objectives. Here are the few potential advantages of floater funds:
  1. Interest Rate Resilience: One of the key benefits of Floating-rate Funds is that they are less prone to fluctuations in interest rates than fixed-rate securities. Returns on such investments fluctuate in line with interest rates, which may minimize interest rate risk.
  2. Superior Returns: Floater Funds attempt to make investments in debt securities that support floating interest rate schemes. During a favorable shift in interest rates, these funds can generate higher returns.
  3. Income Generation: Interest payments from the underlying securities are usually the source of income for Floating-rate Funds. If you are looking for a steady source of income, then you may find this appealing.
  4. Strategic Allocation: The majority of the allocation of Floater Funds is made up of debt instruments with floating interest rates, and the remainder goes towards fixed-income securities. Due to this diversity, you are able to benefit more from the shifting interest rate regime.
It's important to remember that, despite these benefits, Floating Funds come with risks. These risks include credit risk and the possibility of lower returns in an environment where interest rates are falling. So, make a thorough research before making a final investment.
Depending on your financial goals, risk tolerance, and market conditions, you may find that investing in Floater Funds can be a good fit or not. You can use the following factors to assess whether floater funds are a suitable match for your investing strategy:
  1. Regular Income: If you are looking for an investment option with regular income generation, Floater Funds are a perfect choice. They usually earn income through monthly interest payments from the underlying securities.
  2. Time Horizon: These funds can be a suitable option for you if you have a medium-to-long-term horizon. Along with preserving your capital and promoting portfolio stability, it gives you good profits.
  3. Diversification: If you want to expose yourself to a different market segment and diversify your portfolio, you can invest in these funds. Investing in floater funds can balance your portfolio, especially if you have a major investment in equity funds.
It becomes important to remember that the returns on your Floater Fund investment are dependent upon the market conditions. The RBI sets the repo rate based on the country's economic circumstances. If the interest rate declines, your investment in a Floater Fund may yield lower returns than funds with fixed returns.
Floater Funds are one of the most favored options, especially by conservative investors. Here are some considerations to know, if floater funds are the right choice for you:
  1. Risk Tolerance: Investing in debt securities makes Floating-rate Funds appropriate for investors with low-risk tolerance. Floater Funds are a less risky and safer investment option in comparison to equity funds.
  2. Additional Income Source: Floater Funds can be a viable option if you are looking for an additional source of income. Also, adding it to your portfolio can provide diversification and spread your risk.
  3. Stability: Floater Funds can be suitable for you if you seek less volatile fixed-income options. Because they invest in high-quality debt products with good ratings, these funds are comparatively stable.
  4. Higher Returns: Floater Funds may generate superior returns than fixed-interest-rate debt products. If interest rates are expected to rise, you can consider putting funds in this avenue to take advantage of the rising interest rate scenario.
You should research the market economy before making an investment. It's important to keep in mind that interest rates tend to fluctuate as per the economic conditions of the country. This can have both a positive and a negative impact on the investment.

Other Debt Funds

Liquid
Banking & PSU
Corporate Bond
Dynamic Bond
Overnight
Ultra Short Duration
Short Duration
Low Duration
Credit Risk
Gilt Funds
Gilt Funds 10 Year Constant Duration
Money Market
Medium Duration
Medium Long Duration
Long Duration

Explore Other Mutual Funds

Equity Fund

Equity Funds

High Risk, High Returns

hybrid Fund

Hybrid Funds

Some Equity, Some Debt

Elss Fund

ELSS Funds

Save Tax in Section 80C

Elss Fund

Index Funds

Buy an Entire Index!

Frequently Asked Questions

Floater Funds invest mainly in floating-rate securities, meaning the interest they pay changes over time with market interest rates. This feature makes them relatively resilient to interest rate fluctuations, as the fund's yield adjusts in response to changes in interest rates, potentially offering steady returns even in varying rate environments.

Floater Funds are typically invested in debt instruments with variable interest rates, such as floating-rate bonds, loans, and other money market instruments. These securities adjust their interest payouts based on prevailing market rates, making them an appealing option for investors looking to mitigate the risk of interest rate fluctuations.

Floater Funds can give profit through the interest income generated from floating-rate securities. Their performance is influenced by changes in market interest rates, with the potential for increased income when rates rise. However, like all investments, profits are not guaranteed and depend on market conditions.

No, Floater Funds are not tax-free. The income from these funds is subject to taxation according to the investor's applicable income tax slab if held for less than three years. For holdings beyond three years, they are taxed at 20% with indexation benefits, similar to other debt fund taxation rules.

Profits from Floater Funds are treated as capital gains and taxed accordingly. If you redeem your investment within three years, any profit is considered a short-term capital gain and taxed as per your income tax slab. For investments held for more than three years, profits are considered long-term capital gains and taxed at 20% with the benefit of indexation.
To choose the best Floater Fund, consider factors like the fund's past performance, the experience and expertise of the fund manager, the fund's expense ratio, and how its interest rate adjustment feature aligns with your investment horizon and risk tolerance. It's also wise to review the credit quality of the underlying securities to assess the fund's risk level.
No, it's not necessary to open a demat account to invest in Floater Funds. You can directly invest through mutual fund AMC platforms or through various online investment platforms without needing a demat account. This flexibility makes it convenient for investors to access Floater Funds without additional account requirements.
Both lump-sum and SIP (Systematic Investment Plan) have their advantages in Floater Funds. A lump-sum investment might be suitable if you have a substantial amount to invest at once, especially during periods of rising interest rates. SIPs are beneficial for averaging the cost of investments over time, offering a disciplined approach to investing and potentially reducing the impact of interest rate volatility.
To start an Floater Fund SIP online, follow these 4 steps:
  1. Open Demat Account
  2. Choose the Floater Fund you wish to invest in.
  3. Choose the SIP option, specifying the amount and SIP date
  4. Set up an auto-pay via bank account to automate the SIP payments
Yes, you can redeem your investment in Floater Funds at any time. These funds offer high liquidity, making them a flexible option for you who may need access to their funds. However, it's advisable to consider the current interest rate environment and potential exit loads before making a redemption decision.
No, Floater Funds do not have a lock-in period, allowing you the flexibility to enter and exit the investment as per their financial goals and market outlook. This liquidity feature is particularly appealing to those looking for short to medium-term investment options without the constraints of a lock-in period.
The primary risk associated with Floater Funds is interest rate risk, although it's typically lower than fixed-rate debt funds due to their floating interest rate feature. There's also credit risk, depending on the creditworthiness of the issuers of the underlying securities. While these funds adjust their payouts with market rates, there's still the potential for variation in returns.

There is no investment that is completely risk-free, and Floater Funds are no different. Although they are deemed less risky than fixed-rate debt funds, particularly in a rising interest rate environment, they still involves a certain degree of interest rate and credit risk. Utilizing the floating rate mechanism can help reduce risks linked to interest rate changes, positioning them as a more secure choice in the debt fund category.





Invest in Direct Mutual Funds at

0% Commission!

Start with SIP or Lumpsum. Choose from 1000+ direct mutual funds.


border
logo

Join us on

community logo

Follow us on

twitter
telegram
Linkedin
youtube
instagram
facebook

built with love
for Indians who love to invest & trade

raise

We are part of Raise Financial Services

raise
raise

Explore  |  Sitemap


*All securities mentioned on this website are exemplary and not recommendatory.

We are bullish on India, we are bullish on India's prospects to be one of the largest economies in the world. We believe that the stock market provides a unique opportunity for all of India's traders and investors to participate in the growth story of the country.

Yet, most investing & trading platforms in India have remained more or less the same over the past decade. Times have changed and retail traders and investors have become smarter about managing their trades and money. Modern traders & investors require an online trading platform that helps them keep up with the technological advancements of our time.

That's why we're building Dhan - to help you trade, to help you invest, and to help you participate in India's growth stock via the stock market with awesome features and an incredible experience.

We are doing so by giving you access to not just one but 6 products within the Dhan ecosystem:


This means that with Dhan, you'll be able to start:


Lakhs of users already trust Dhan for their online stock trading and investing needs. Dhan is growing rapidly because of the love we receive from SuperTraders and Long-Term Investors who acknowledge that the platform is innovating for them, building super useful features that help them do everything from investing in stock market to trading F&O like a pro on the Tradingview charts and much more.

While we are growing, we will always remember why we started building in the first place - you. Our user-first approach will always be at the heart of our philosophy. Come join us on this incredible journey!

Try it out, you can close your account at anytime using this link.

©2021-2024 Moneylicious Securities Private Limited. All rights reserved. CIN - U74999WB2012PTC184187 Moneylicious Securities is part of Raise Financial Services.

SEBI Stock Broker Registration No: INZ000006031 | Depository Participant (CDSL) ID: IN-DP-289-2016
Exchange Membership No. : NSE: 90133 | BSE: 6593 | MCX: 56320
Registered Office: Office No. 14D, 4th Floor, Shri Krishna Chambers, 78, Bentick Street, Kolkata - 700001, West Bengal, India.
Corporate Office: A-302, The Western Edge I, Off Western Express Highway, Borivali East, Mumbai - 400066, Maharashtra, India. Customer Care: 9987761000.

Details of client bank account

For any query / feedback / clarifications, email at help@dhan.co.

In case of grievances for any of the services rendered by Moneylicious Securities Private Limited, please write to grievance@dhan.co (for NSE, BSE and MCX) or grievancedp@dhan.co (for Depository Participant). Please ensure that you carefully read the Risk Disclosure Document as prescribed by SEBI, our Terms of Use and Privacy Policy. Compliance Officer: Mr. Manish Garg and Mobile: 8655740961 Email: complianceofficer@dhan.co To lodge your complaints using SEBI SCORES, click here.


DHAN is a brand owned by Moneylicious Securities Private Limited. All DHAN clients are registered under Moneylicious Securities Private Limited. Clients are advised to refer to our company as Moneylicious Securities Private Limited when communicating with regulatory authorities.


Procedure to file a complaint on SEBI SCORES: Register on SCORES portal. Mandatory details for filing complaints on SCORES: Name, PAN, Address, Mobile Number, E-mail ID. Benefits: Effective Communication, Speedy redressal of the grievances


Disclaimer: Investment in the securities market are subject to market risks, read all the related documents carefully before investing. Brokerage will not exceed the SEBI prescribed limit


Attention investors:

  1. Stock brokers can accept securities as margins from clients only by way of pledge in the depository system w.e.f September 01, 2020.
  2. Update your e-mail and phone number with your stock broker / depository participant and receive OTP directly from depository on your e-mail and/or mobile number to create pledge.
  3. Check your securities / MF / bonds in the consolidated account statement issued by NSDL/CDSL every month.

Note: As a policy we do not give stock tips or recommendations and have not authorized anyone to give this on behalf of us. If you know anyone claiming to be a part of Dhan / Moneylicious / Raise or our associate companies or partners and offering such services, please report us on help@dhan.co. Important Information for Investors: To prevent unauthorized transactions in your trading / demat account, do not share your account details, credentials or any personal details with anyone. Keep your mobile number updated with your Stock Broker, Depository Participant and ensure that the same is registered with Stock Exchanges, Depository and KRAs. You will receive alerts and information on your registered mobile number / email for debit and other important transactions in your demat account directly from CDSL / Exchange on the same day. KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (Stock Broker, DP, Mutual Fund, etc.), you need not undergo the same process again when you approach another intermediary. No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account. This is issued in the interest of investors.


Moneylicious Securities Private Limited also known as Dhan is only an order collection platform that collects orders on behalf of clients and places them on BSE StarMF for execution. Client expressly agrees that Dhan is not liable or responsible and does not represent or warrant any damages regarding non- execution of orders or any incorrect execution of orders with regard to the funds chosen by the client or due to, but not being limited to, any link/system failure, delay in transfer of the funds on account of any unforeseen circumstances/issues in the banking system/payment aggregators or any other problems that may result in a delay in crediting the funds into the BSE Star MF's bank account.


Mutual fund investments are subject to market risks, read all scheme related documents carefully before investing. Dhan is not a distributor or agent of any mutual fund. Mutual Funds are not exchange-traded products. Any related disputes will not have access to the Exchange-investor redressal forum or arbitration mechanism. For other disclaimers please refer https://dhan.co/advertisement-disclaimer/


Download client registration documents (Rights & Obligations, Risk Disclosure Document, Do's & Don'ts) in vernacular language: BSE | NSE | MCX


Kindly, read the Advisory Guidelines of BSE | NSE | MCX for investors as prescribed by the exchange with reference to their circular dated 27th August, 2021 regarding investor awareness and safeguarding client's assets


Important Links: SEBI | BSE | NSE | MCX | CDSL | SCORES | ODR Portal | Investor Charter for Stock Brokers | Investor Charter for DP | UCC Advisory | e-Voting for Shareholders | NCL Client Collateral details |
MCXCCL Client Collateral details

Important Information: Terms of Usage | Disclaimers | Privacy Policy | Grievances | Risk Management Policy | Risk Disclosure | Advertisement Disclaimer | Saarthi 2.0 Mobile App for Investors