Ultra Short term Funds are also popularly called liquid-plus funds. Unlike liquid funds, that only invest in money market instruments, these Ultra Short term funds also invest a small proportion in debt instruments. As a result, these funds tend to earn higher returns than liquid funds with all the same tax benefits. However, Ultra Short Term Funds are subject to exit loads. A slight variant of the short term fund is the Short Term Floating Rate Funds, where returns are variable. They invest in floating rate instruments that work very well in a rising interest rates scenario. They are also an option for the short term.