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Debt funds are a popular investment option because they are known to offer better returns and higher liquidity than traditional investment options like fixed deposits.
This blog will walk you through the important facts around debt funds. We’ll help you understand how to invest in the best debt mutual funds in India using Cube.
Debt funds are mutual funds that invest in low-risk, high-grade securities like government bonds, corporate bonds, commercial paper, Treasury bills, and more.
Investing in debt means that the fund will loan money to entities like the government or large organizations and earn an interest in exchange. This is how a debt fund generates returns.
Debt funds offer predictable returns between 7 to 9% and carry no lock-in period. Thus, conservative investors looking to get higher returns than FDs may benefit from investing in debt funds.
However, the perfect portfolio must be diversified within and across investments. Thus, debt funds may be also ideal for aggressive investors looking to add a safety net to their portfolio.
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1. Risk: Low
2. Ideal time frame: 1 to 3 Years
3. Returns: 7 to 9%
4. Minimum Investment: ₹10,000
5. Liquidity: 3 business days
6. Exit load: 0.25% (< 30 days)
Debt funds are ideal for the short term (1 to 3 years) and easy to understand as they deal with government securities, corporate bonds, and more.
Above all, they generate solid, predictable returns better than traditional investment options. This can be ideal for low-risk investors looking to participate in the market.
The top debt funds on Cube Wealth are handpicked by Wealth First, Cube’s mutual fund advisory partner. WF curates a list of the best debt funds every month and recommends options that work for you.
You can invest in the best debt funds using Cube Wealth in 5 simple steps:
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Note: Facts & figures are accurate as of 27-04-2021. Download the Cube Wealth app for the latest details.
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Watch this video to know more about handpicked mutual funds on Cube Wealth
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