Debt funds are also known as credit funds or fixed income funds. Money is kept safe in this. Also, tax is saved as well.
Benefits of Debt Funds and How to Invest
Nowadays mutual funds have become a better way of earning. It gives higher returns than FDs and other savings schemes. In such a situation, investing in it is considered beneficial. Although there are many categories of mutual funds, but debt mutual funds are a better option for those who want to make a good and big amount in less money. In this, you get safety and many other benefits along with better returns.
Debt mutual funds are better for those who want to get lump sum amount. It also saves in tax as it is taxed when you sell your funds. If the units of the bond fund are held for more than three years, your capital gains after indexation are taxed at 20 per cent. This saves tax. For better returns, there should be different types of plans in the portfolio. With this, the investor can spend it according to his need.
Returns are received on a fixed time
Debt funds have a pre-determined maturity period, in which you get a stable return. If your investment objective is short-term or fixed-term, then you can choose a debt fund scheme and invest accordingly. This will help you to accomplish your goal in stipulated time without any risk.
You can withdraw money whenever you want
You can withdraw your money in Debt Fund anytime. This amount will come in your bank account. There is no charge for premature withdrawal. Debt funds are also known as credit funds or fixed income funds. Since the returns are fixed in advance, your money is safe.
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