Nov 1, 2021
Debt funds are mutual funds that invest your money in fixed-interest generating securities.
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These include government and corporate bonds, debentures, other money market instruments.
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Good option for investors with low risk tolerance; not as volatile as equity investments.
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Longer the maturity period for the debt fund, higher the risk of interest rates fluctuating.
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You may need to keep a long investment horizon for better returns/capital appreciation.
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Fund that has a majority of high-quality bonds. Research before investing in funds that have lower rating.
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Debt funds held above a year attract long-term capital gains tax of 20% and include indexation benefits.
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Opt for a fund where the expense ratio - charges of asset management company -- is minimal.
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Venture debt facilitates profitability and growth. More affordable than equity. Can offer high returns.
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Debt funds are relatively one of the safest with predictable returns, increased liquidity, and convenience.
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