Which type of debt fund gives highest return?

The table below shows the best-performing debt funds based on the last 5-year returns:

Mutual fund	5 Yr. Returns	3 Yr. Returns
IDFC Government Securities Fund-Constant Maturity Plan-Growth-Direct	9.5\%	11.04\%
DSP Government Securities Fund – Direct Plan – Growth	7.77\%	10.98\%
ICICI Prudential Constant Maturity Gilt Fund	8.02\%	10.91\%

Is SBI debt fund Safe?

Safety: The mutual fund schemes by SBI are one of the country’s trusted and reliable fund schemes. Variety of Options: Investing in SBI Mutual Fund comes with a broad range of choices, you can invest for a short-term, mid-term and long-term in these schemes offered by the SBI.

How good are debt funds?

Debt funds are suitable for risk-averse or for those who are not ready to have equity exposure. Debt funds grow investors’ wealth with little to no risk. Additionally, these funds strive to provide regular income. Investors usually stay invested in debt funds for a short to medium-term horizon.

Is it good to invest in debt mutual funds?

Khandelwal explained, in order to earn higher returns, these funds have taken a higher risk than required by investing in low quality papers. When investing in debt funds, the priority is not to earn high returns but to ensure safety, and may be a 1\% to 2\% more return as compared to FD or saving accounts.

How to choose the right debt funds for your investment horizon?

“If you have an investment horizon of three years, choose a fund with a lower maturity than three years, so that you do not face that volatility,” said Pathak. You can find the average maturity of a debt scheme in its monthly factsheet. Pathak also emphasized on not to look at the past returns.

Is a debt fund suitable for You?

Here’s how you can assess if a debt fund is suitable for you or not: Investment Horizon: It refers to the time period for which you wish to stay invested in a debt fund, it could be as short as a day and as long as 10-20 years. Overnight funds feature the shortest average maturity, i.e. of 1 business day.

What should I consider before investing in a mutual fund?

Before investing in any fund, you must first identify your goals for the investment. A prospective mutual fund investor must also consider personal risk tolerance. A potential investor must decide how long to hold the mutual fund.

What are the risks associated with debt mutual funds?

He went to explain the two kinds of risks associated with debt mutual funds: interest rate risk and credit risk. “When interest rates move up, the prices of bonds fall and vice versa. Investors must also know that the longer the duration or maturity, higher is the interest rate risk,” said Pathak.