Floater mutual fund

Mon, 18 May 2026 00:00:00 +0000

A floater mutual fund is a SEBI-categorised debt mutual fund scheme that invests at least 65 per cent of its corpus in floating-rate instruments whose interest rates reset periodically (typically monthly or quarterly). The category was defined under the SEBI October 2017 categorisation framework as one of the 16 debt scheme sub-categories.

For Indian retail investors, floater funds offer:

Hedge against rising rates: Floating-rate coupons adjust upward when reference rates rise.
Moderate yields: Typically 6-7.5 per cent in normal markets.
Lower duration risk: Compared to fixed-rate medium and long duration funds.

This article covers the SEBI category framework, the floating-rate instrument types, the major schemes, the role in rate-hike cycles, and the post-2023 tax treatment.

Floating Rate on WebNotes

Floater mutual fund