Types Of Debt Mutual Funds To Know About
For the investors today there is a lot of easily accessible support available. Trading bots like Ethereum Code can take care of the trading process even for those who do not know about trading. And when it comes to the variety of investments, this is again a favorable time for the investors. Debt fund is quite a profitable option for those looking for liquidity. Recently, with the growing awareness about how profitable debt funds can be, there are various companies that have started offering debt fund plans. Here are the most common types of debt funds to know about-
Short term funds
Certificates of deposits and other similar places are where short-term funds are parked. These come with maturity periods ranging over a few years. If you are expecting a stable income over a period of time then these are quite useful.
Known to be some of the most secure options these are funds where the capital is placed in Government securities. There is the higher security benefit in this case which comes at the cost of the investor having to pick a relatively longer tenure. One other thing to know about glit funds is that they have volatile NAVs making the profits sensitive to any small movement in the rate of interest.
When you have money in your savings account you would only be able to earn a very small interest on it. But the money in the savings account is usually held there as these accounts are easier to access. For a similar liquidity, there are liquid funds. The investment period here would be a short one. Treasury bills and other such volatile yet liquid instruments are chosen for the liquid fund investments.
Fixed maturity schemes
If you know that you have a capital that you might not need anytime soon then it makes perfect sense to invest in a fixed maturity plan where the security and the returns are both favorable for the long-term investors. The time frame chosen would determine the interest you would earn on the capital.
Monthly income funds
The regular income offered in this case would be derived by creating a hybrid structure. There are both equity investments and fixed income options chosen for these funds. A small portion invested in the equities, in this case, is responsible for the significantly good return rates on this. Wait for a whole cycle and not just the falling interest if you wish to increase your profits.