You have a pre approved offer
Currently, we do not have a personalized offer for you but don’t be disheartened. Check out our oven fresh deals of the day here!
Mutual fund is an investment tool where a pool of money referred to as a corpus is gathered from a number of investors who share a common financial goal in tune with the objective of the fund being invested in. This corpus is then divided for investment into different companies and income generating opportunities in line with the mandate of the fund. The Securities and Exchange Board of India regulates all mutual funds in India.
While it is commonly assumed that mutual funds invest only in equities, it is not true. Apart from equities, mutual funds also invest in debt instruments across various categories, thus giving an investor the option to spread out their investments, and optimise their profits, rather than being invested only in equities.
Debt mutual funds invest the majority of their corpus in fixed income or fixed interest generating opportunities such as money market instruments, corporate bonds, treasury bills, government securities, commercial papers etc. These funds strive to minimise risk by investing in such instruments. This also considerably reduces the chances of exponential returns in debt mutual funds as compared to their equity counterparts. It is for this reason that a debt mutual fund generates higher returns than a fixed deposit but lower than equity mutual funds.
Debt mutual funds available on Finserv MARKETS aim to deliver stable and low risk returns unlike equity mutual fund schemes that attempt to gain capital appreciation by investing in equity stock of companies. The credit rating of a fund scheme decides the which debt instruments the fund will invest in. These ratings also indicate the likelihood of the instrument to honour its interest payments and the eventual principal payment at maturity. The higher the rating of the debt instruments chosen, the lesser is the risk associated with the debt mutual fund.
There are many kinds of debt mutual funds depending on the proportion of various debt instruments they choose to invest in. Here are a few:
You can invest in these funds either as a lump sum in one go or by investing small amounts of money at regular intervals for a specific time frame through a systematic investment plan or SIP. However, in case of FMPs, you cannot invest via SIPs, as the investment has to be done during the initial offer period. You should invest in debt mutual funds if:
With Finserv MARKETS, you can directly invest in debt mutual funds of your choice without the need for a broker thus eliminating the need for commission. What’s more, you can easily open an account online by submitting the necessary KYC documents. Once your account is operational, you can get detailed insights into the performance of your investments and track them online anywhere, anytime.