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Debt Funds

Invest in a diverse portfolio of fixed-income instruments for stable returns.

No equity risk
Stable returns on investment
Suits different investment horizons

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27+

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6 lakh+

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68,000 Cr+

Depository AUM

1000+

Franchisee Outlets

What are
Debt Mutual Funds?

Debt mutual funds are those that invest a primary part of their portfolio in debt instruments and fixed-income securities. There is low risk and the returns are stable.

Why you should invest in Debt Mutual Funds?

Liquidity

If you are looking for short-term investments, debt funds can be a good place to park your funds without the risk of capital erosion.

Low risk

Since debt funds invest in fixed-income instruments, volatility risks are low and your capital is usually protected.

Stable returns

You can earn stable returns on investments with negligible chances of loss.

Suitability

You can choose from short-term, midterm and long-term debt funds based on your investment horizon.

Types of Debt Mutual Funds

Funds Based On Duration

Overnight FundSecurities mature in a day

Liquid FundMaximum maturity of securities is 91 days

Ultra Short Duration Fund Bonds matures between 3 and 6 months

Money-Market FundInvestment in money market securities with an investment tenure up to 1 year

Short Duration FundMacaulay duration of the fund ranges from 1-3 years

Medium Duration FundMaturity of bonds in between 3-4 years

Medium to Long Duration FundMaturity of bonds ranges from 4-7 years

Dynamic Bond FundPortfolio invests in securities across durations

Funds Based On Portfolio Allocation

Corporate Bond FundPortfolio invests primarily in corporate bonds

Credit Risk FundInvestment in securities with the second highest credit rating

Banking and PSU FundDebt instruments issued by banks and PSUs

Gilt FundInvestment in government securities

Gilt Fund with 10 year Constant DurationInvestment in government securities with Macaulay duration (weighted average time that a bond needs to be held for so that the total present value received is equal to the current market price) of 10 years

Floater FundInvestment in floating rate instruments (instruments with interest rate that fluctuates with respect to a benchmark rate)

Debt Mutual Funds Calculator

Want to know how much you can accumulate by investing in debt funds? Use Aditya Birla Sun Life Mutual Fund (ABSLMF) calculators and get an estimated value of your corpus.

SIP

Invest regularly and get the benefit of compounding and rupee-cost averaging, not to mention, affordable savings!

Lump Sum

Make a one-time investment to grab a good market opportunity and let your savings grow over time.

Calculate SIP Amount
Calculate Portfolio Value

TARGETED EARNINGS

Investment Period (1 to 30 Years)

Expected Returns (8 to 20%)

MONTHLY SIP AMOUNT

Investment Period (1 to 30 Years)

Expected Returns (8 to 20%)

INVESTED AMOUNT

EST. RETURNS

Monthly SIP Amount

₹ 0

Total Amount Invested

₹ 0

Expected Wealth Gain

₹ 0

ABCD - One app to build a diversified
investment portfolio

Invest in mutual funds online with the ABCD app and build your portfolio one click at a time.

A choice of different types of mutual fund schemes
Online investments with a fully integrated digital platform
Facility to switch, redeem and invest more from a single platform

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Understanding Debt Mutual Funds

Table of Contents

How do Debt Mutual Funds work?Features of debt mutual funds How to invest in debt mutual funds?What are the tax implications?

How do Debt Mutual Funds work?

Debt funds invest in debt instruments such as Corporate or Government bonds.
Debt funds receive interest from these underlying debt instruments such as bonds.
This interest gets added in the fund which result in NAV of these MF funds go higher.
NAV price also increases or decreases based on the market interest rate.

Features of debt mutual funds

Regular Income
Less volatile
Steady return with lower risk
High Liquidity

How to invest in debt mutual funds?

Use the ABCD app and invest in debt funds in a few clicks. Choose your investment mode - SIP or lump sum and start your investment journey.

SIP

Invest in a regular and disciplined manner every month with SIPs

Lump sum

One-time investment at your convenience

What are the tax implications?

Returns earned from debt mutual funds are taxed in your hands at your applicable tax slab rate.

LI Retirement Plan

Secure retirement with Life Insurance

Secure regular pensions
Save on taxes

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ULIP

Invest and secure with ULIPs

Market-linked returns
Flexibility: withdraw, switch, top up

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FAQs On Debt Mutual Funds

A debt fund is a type of mutual fund that invests in fixed-income instruments like government and corporate bonds. They offer stable income, risk diversification, and liquidity. Returns come from interest and capital appreciation, with taxation based on the holding period, making them versatile for various investment goals.

The decision to invest in a debt fund depends on your financial goals and risk tolerance. If you prioritize stability, regular income, and lower risk, a debt fund can be a good choice. However, if you seek higher returns and are willing to tolerate more risk, you might consider other investment options such as equities funds. It's essential to align your investment decisions with your specific financial objectives and risk preferences.

Fixed Deposits (FDs) are typically considered safer with fixed interest and deposit insurance, whereas debt funds entail some risk due to credit risk and interest rate fluctuations.

Debt funds can be well-suited for conservative investors seeking higher interest than traditional Fixed Deposits. They are also suitable for those with a 1-3 year investment horizon and investors looking to diversify their portfolios, balancing equity risks with the stability of debt instruments. Ultimately, the decision depends on individual goals and risk tolerance.

No! Debt funds will be taxed as per your income tax slab.

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Debt Funds

What are
Debt Mutual Funds?