What is Debt Mutual Fund

What is Debt Mutual Fund

A Complete and interactive guide on debt mutuals or popularly known as Debt Funds

A debt fund is a type of Mutual Fund scheme which invests in fixed income instruments, such as Corporate and Government Bonds, Treasury Bill, corporate debt securities, money market instruments, etc. those offer capital appreciation over a fixed period. Debt funds are also marketed as Income Funds or Bond Funds as they mostly invest in bonds.

A couple of significant benefits of investing in debt funding are reduced cost construction, relatively stable yields, comparatively large liquidity and reasonable security.

Debt funds are great for investors who plan for regular earnings but are risk-averse. In case you've been saving in conventional fixed income products such as Bank Deposits, and searching for steady returns with low volatility, then Debt Mutual Funds may be a better choice for you, since they help you attain your financial goals in a more tax efficient way, and so earn superior returns.

Concerning operation, debt funding isn't entirely different from other Mutual Fund schemes. Nonetheless, concerning the safety of funds, they score higher than equity Mutual Funds which directly depend on the share market movements.