Liquid funds: Liquid fund primarily invests in money market instruments such as treasury bills, Commercial Papers (CPs) & Certificate of Deposits (CDs). These instruments have maturity period of up to 91 days. Investors who want to invest in the short term, with the least amount of risk, invest in such type of funds.
Ultra Short funds: These invest in debt securities like Treasury Bills, Commercial Papers or Certificates of Deposit, having maturity period ranging from 3 to 6 months. These are a bit risky as compared to liquid funds because of their relatively longer maturity period.
Short term funds: They invest in money market securities like Commercial Papers, Certificates of Deposit, with a maturity period between 6 to 12 months.
Medium Term funds: These funds invest in Gilt securities (government bonds), Corporate bonds, etc., with the maturity period anywhere between 1 to 3 years.
Long term funds: They also invest in Gilt securities and corporate bonds etc., but the maturity period is higher, i.e., more than 3 years.