Equity and Debt funds
What are Debt Funds? Debt funds are the pool of investments that are invested in highly rated fixed-income earning securities like central and state government bonds, treasury bills, and other money market instruments . It is to be noted that debt funds are investing into fixed income earning instruments and hence the risk is quite less. Debt funds are good for shorter investment horizons like 3 to 5 years. When the units purchased in a debt fund are sold within three years, then the income will be taxed considering short-term capital gains. Any sale of units of a debt fund held for more than 3 years is treated as long-term capital gains for tax purposes. Debt funds are managed by an experienced team of fund managers, hence the investment in debt funds is considered safe. Debt funds are highly liquid and one can get money back within a day’s time. There can be an incidence of exit load for the withdrawal of the amount within a stipulated time frame. W...