Mutual funds schemes investing in short-term bonds have benefited from rising interest rates. Reserve Bank of India hiked policy interest rates by 250 basis points since May 2022. Ultra short duration funds that invest in bonds in such a way that the portfolio's Macaulay duration is between 3-6 months. Though these schemes are good short term parking space for money, investors must check exit loads and quality of the portfolio before investing. According to AMFI, 25 such schemes manage assets under management worth Rs 90,295 crore as on 30 April 2023. If short term interest rates come down in near future, as anticipated by some experts, the returns on these schemes will also taper down.