By investing in debt instruments, these funds ensure low risk and provide stable income to the investors.
The different types of debt funds are:
Gilt funds
They invest their corpus in securities issued by the government.
These funds carry zero default risk but are associated with interest rate risk. So, there could be a possibility that the debt funds lose some part of their net asset vale also.
But these schemes are safer as they invest in papers backed by government.
Income funds
They invest a major portion in various debt instruments such as bonds, corporate debentures and government securities.
Monthly income plans
They invest most of their corpus in debt instruments
Some golden investment tips
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