Floater Fund

A Floater Fund (or Floating Rate Fund) is a debt mutual fund scheme that predominantly invests in floating rate debt instruments bonds and money market securities whose interest payments are periodically reset in line with a benchmark rate such as the RBI repo rate, MIBOR, or T-bill yields. Because the coupon adjusts with market rates, floating rate funds have very low duration risk compared to conventional fixed-rate bond funds they are relatively insulated from price losses when interest rates rise. In India, SEBI categorises floating rate funds as a distinct debt fund category, and they are popular among conservative investors seeking stable, low-risk returns with minimal sensitivity to interest rate movements.