Overnight, liquid or money market? May 2026 numbers

Three rungs of the same ladder

Over the year to early May 2026, the median overnight fund returned 5.39%, the median liquid fund 6.29% and the median money market fund 6.50%.

All three are places to park cash, and they differ mainly in how long the paper they hold may run. An overnight fund lends for one day. A liquid fund holds paper maturing within 91 days. A money market fund may hold money market instruments maturing within a year. Each step out has paid a little more over the year.

The figures are computed from daily NAVs, Direct plan, Growth option. Overnight and liquid funds publish a NAV for every calendar day, and every fund in both counts reports one for Sunday 10 May. Money market funds publish on working days only, so their figures are as of Friday 8 May. Each one-year figure still covers a full year. Unclaimed-amount plans and one duplicate liquid code are left out.

The year, and longer

The first step, from overnight to liquid, is worth 0.90 points over the year at the median, about ₹9,000 on ₹10 lakh. The second, from liquid to money market, is worth 0.21 points, about ₹2,100. All 24 money market funds with a year's history beat the median liquid fund.

The cost of each step is a bumpier NAV. Overnight funds have never fallen from a peak in three years. A money market fund's volatility is three times an overnight fund's, though at 0.38% a year it is still tiny.

Month by month, the order breaks

The one-year table makes the ladder look orderly. The monthly figures do not.

These are median absolute returns over one month, each window 31 days long. They are not annual rates.

Overnight funds barely vary: between 0.41% and 0.45% every month, or roughly 4.9% to 5.4% a year when scaled up by compounding. That steadiness is the point of lending for one day.

Money market funds swing from 0.36% to 0.65%. In the months to 30 January and 31 March they earned less than overnight funds: scaled up, about 4.3% to 4.6% a year against about 5.3% to 5.4%. In the month to 30 April they earned about 7.9% a year.

A fund holding paper with months left to run marks it to market every day. When short-term yields rise, that paper's price dips, and the month's return falls below the interest it is earning; when yields ease, the dip comes back. An overnight fund has nothing to mark. Liquid funds sit in between, and showed the smallest version of the same swing.

The last month

In the month to early May, the medians were 0.41% for overnight funds, 0.46% for liquid and 0.53% for money market, all absolute over 30 days. Scaled to a year those are about 5.1%, 5.7% and 6.6%.

The liquid figure is lower than April's 0.68% because much of April's gain came in its first days, which this window no longer includes. HDFC Liquid, for one, rose 0.40% between 30 March and 10 April, and 0.28% in the twenty days after.

What this does not tell you

None of these is a savings account. The NAV of any of them can fall if a holding is downgraded or defaults. This was a calm stretch for credit.

Past returns don't predict. The gaps between the rungs depend on the shape of short-term rates, which changes.

The monthly swings are small in rupees. A month at 0.36% instead of 0.44% costs ₹800 on ₹10 lakh. It matters to someone parking money for a few weeks, much less to someone holding for a year.

Tax is at your slab for all three. Gains on units bought on or after 1 April 2023 are taxed at your income-tax slab rate.

Where to go from here

The overnight, liquid and money market pages list every scheme with live returns. The guide to overnight vs liquid vs ultra-short funds explains where each fits.

For the equity-taxed alternative, see arbitrage fund returns to March. For the earlier liquid fund picture, see liquid fund returns in March.