What Are The Different Types Of Debt Funds?

What Are The Different Types Of Debt Funds?

Mutual fund is the process of investing money from the lost of investors which forms a big amount. Then, this pool of amount will be divided for diffe...

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Mutual fund is the process of investing money from the lost of investors which forms a big amount. Then, this pool of amount will be divided for different investment options to generate monthly income. Instead of searching many investments options, debt mutual fund is the right choice and generates more income opportunities for the investors. Some example for the debt funds are corporate banks, commercial papers, treasury bills and a lot more. Finally, is a safer investment scheme and offers better income opportunities than others. Stay hooked with the following article and knows the different debt funds types!

What are some different types of debt funds?

The following are the different debt funds types and know the one which suits your investment options:

  • Overnight funds!

It is the short term mutual fund and considered as the safe investments for the investors. It is the savings scheme which is mainly concentrate on the security purposes.

  • Minimum Duration Funds:

It is the debt schemes which involves low risk and takes a period-lock-tenure of about 1-3 years. It is not subjected to high interest rate at any cause.

  • Liquid Funds:

It is the scheme which takes 91 days and sure you will get better returns in a short period of time. When compared to others, it is one of the best and safer investment procedures for the market securities. as a whole, when compared to regular savings and deposits, liquid funds offer higher returns.

  • Corporate Bond Fund:

The 80% of money from the corpus invests in highest-rated business companies are termed as Corporate Bond Fund. Than short term debt schemes, it is the best choice for the investors and earns higher returns in future.

  • Ultra Short-Duration Funds:

It is the debt fund which takes 3-6 months and mainly concentrates of the money market scheme. Make use of this debt option and sure you will enjoy higher returns than a fixed deposit. And also, it is all about low interest and free from any risks.

  • Long Duration Funds:

Long Duration Debt Funds have lock-in-period of 7 years and so you will generate higher returns. though it is long term process, it offers endless benefits to the investors and compromises steady returns as possible.

  • Credit Risk Fund:

Credit debt fund is a comparatively latest class of schemes that usually involves three-quarter part of corpus amount debt instruments and so you will be rated maximum worth. When compared to others, it is highly concentrate on certain things such as tenure determination, average capital gain and a lot more.

  • Gilt Funds:

In this, 85% of money should be invested in the securities and so you will enjoy higher returns. And sure, you will not undergo any credit risk as possible.

  • Dynamic Bond Funds:

These are the debt funds and have high maturity period lock tenure of 3-5 years. It is suited for the investors and available with moderate risk quotient. As a whole, it is an extremely safe investment option!!

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