Debt funds are mutual funds that invest in money market instruments like bonds, treasury bills, etc.
Unlike equity mutual funds, they are associated with a lot less risk. Their returns are also much more stable when compared to equity funds.
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When investing for a short period of time, like less than 2 years, debt funds make very good investments.
|Axis Liquid Fund - Direct - Growth||7.48%||NA||NA||Debt |
|Indiabulls Liquid Fund - Direct - Growth||7.37%||7.41%||8.02%||Debt |
|L&T Short Term Bond Fund - Direct - Growth||6.42%||7.48%||8.43%||Debt |
|Franklin India Low Duration Fund - Direct - Growth||8.39%||9.15%||9.59%||Debt |
(Low Duration )
|ICICI Prudential All Seasons Bond Fund - Direct - Growth||5.98%||9.88%||11.17%||Debt |
|Kotak Money Market Scheme - Direct - Growth||7.6%||NA||NA||Debt |
|Principal Cash Management Fund - Direct - Growth||-1.74%||4.21%||6.05%||Debt |
|Franklin India Ultra Short Bond Fund - Direct - Growth||8.5%||8.95%||9.35%||Debt |
(Ultra Short Duration)
|HDFC Short Term Debt Fund - Direct - Growth||6.55%||7.71%||8.53%||Debt |
|Aditya Birla Sun Life Short Term Opportunities Fund - Direct - Growth||6.43%||8.4%||9.2%||Debt |
In this article
- Best Debt Funds in India – Details
- Bonus List: 5 More Top Debt Funds
Best Debt Funds in India – Details
This fund is a liquid fund, as the name suggests. Liquid funds are ideal for investing anywhere from a few days to a few months.
The returns they give is better than savings bank account. This is exactly why liquid funds are a good alternative to keeping money in the savings bank account.
Axis Liquid fund is one of the top performing liquid funds that has given returns of around 8% over the last 5 years – which is a good return.
Even in the last year, the rate of return is much higher than what you’d get from a savings account.
The reason why liquid funds are considered a good alternative to keeping money in the savings account is because redeeming money from a liquid fund is a very fast procedure.
Unlike other other types of funds, redeeming money from a liquid fund takes only about a day or two.
Indiabulls Liquid Fund is another good liquid fund on this list. It has given a return of 8.25% over the last 5 years and 6.71% over the last one year.
This fund has returned around 9% in the last 5 years and 8% in the last 1 year.
L&T Short Term Income Fund is a short term fund. These funds are a good investment options if you wish to invest for a period of a few months to 1 year.
Short term funds are a good investment option for those wishing to not expose themselves to market risk.
They are also used to store money until an investment decision is made.
Franklin India Low Duration Fund is an ultra short term fund.
It has given a very high return of 9.49% over the last 5 years and 8.20% in the last 1 year.
It is ideal for investing for a period of a few months to a year.
This fund is a dynamic fund – which means it is a fund that switches aggressively between short term and long term investments.
This allows the fund to leverage differences between the two types of investments.
ICICI Prudential Long Term Investment Plan has given a return of 4.43% in the last 1 year and an incredible 11.24% over the last 5 years.
Bonus List: 5 More Top Debt Funds
6. Kotak Money Market Scheme (Liquid Fund)
Disclaimer: the views expressed here are those of the author. Mutual funds are subject to market risks. Please read the offer document before investing.