Debt Funds
Focused on steady, regular income and capital preservation through fixed-income securities.
How we help
Debt funds invest in bonds, government securities and money-market instruments. They usually move less than equity funds, but they are not risk-free: prices change with interest rates, and a borrower can default.
Categories range from overnight and liquid funds, for money needed soon, to longer-duration and gilt funds. We start from when you need the money and choose the duration and credit quality to match.
Under current rules, gains on most debt funds are taxed at your income-tax slab rate. We take that into account when comparing them with a bank deposit.
What it covers
- Overnight, liquid, short-duration and gilt funds
- Duration matched to when you need the money
- Credit quality checked before investing
Offered as an AMFI-registered mutual fund distributor, not a SEBI-registered investment adviser: no advisory fee is charged, trail commission is paid by the asset management company and disclosed, and no return is assured.
Before you decide
Points to check
- 01When you will need the money
- 02Interest-rate risk, which is higher in longer-duration funds
- 03Credit risk in the fund's holdings
- 04The expense ratio and any exit load
- 05Tax on gains at your income-tax slab rate
Common questions
What people ask us about Debt Funds
Are debt funds safer than fixed deposits?
They carry different risks. Debt funds are not guaranteed, and their value can fall when interest rates rise or a borrower defaults. Bank deposits are insured by DICGC up to a limit. We explain both before you choose.
Where can I keep money I will need within a few months?
Overnight and liquid funds hold very short-term instruments and are commonly used for this. They still carry some risk.
How are debt fund gains taxed?
Under current rules, gains on most debt funds are added to your income and taxed at your slab rate, however long you hold them.
More in Mutual Fund & Investment Options
- Equity FundsDesigned for long-term capital appreciation by investing in shares of high-growth companies.Learn more
- Hybrid FundsBalanced portfolios combining equity and debt to optimize returns while managing risk.Learn more
- Tax-Saving Funds (ELSS)Equity-linked schemes that help you grow wealth while optimizing your tax liabilities.Learn more
Shree Sai Insurance is the practice of Amit Dhirajlal Waghela, an AMFI-registered mutual fund distributor (ARN-166386), not a SEBI-registered investment adviser. The firm earns commission from asset management companies on the schemes it distributes, does not charge a fee for distribution, and does not guarantee returns. Insurance is offered separately from the mutual fund distribution business. Mutual fund investments are subject to market risks. Read all scheme related documents carefully.