Debt Mutual Funds

Posted on by

Debt Mutual Fund refers to the money pooled from investors in fixed income securities, which include Government Bonds, Corporate Bonds, Money market instruments, by the Mutual Funds. These instruments have different periods of maturity and different coupon rates (interest earned from investment). As an example, Liquid Funds are a category of Debt Mutual Funds which are suitable for parking money for short term (more like a savings bank A/c) like a month or 2. Like the SB A/c where we can park the money for a few days to even years, Liquid funds can be used without any time restriction and typically give you returns of 2 to 3% more than savings account.  From a risk perspective, Debt MFs are relatively risky when compared to Bank or Postal Deposits, but when used judiciously, can yield much higher post tax returns.

PenguWIN attempts to decode Financial Jargons <Debt Mutual Funds>

Comments are disabled