Debt Funds

Debt funds are a type of mutual fund that invests in fixed-income instruments like corporate bonds, government securities, corporate debt, and money market instruments. The risk level of a debt fund depends on two factors: who the money is lent to and for how long.

• Debt funds can be considered for an investment horizon of 1 day to up to 3 years.
• They offer better post-tax returns compared to FDs if you stay invested for at least 3 years.
• Liquid debt funds are a great option to park your emergency funds. You can earn better returns than a savings bank account without taking too much risk.