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Best TATA Debt Mutual Funds

Established in 1994, TATA Mutual Fund provides an extensive range of investment solutions focused on financial planning and wealth creation. The asset management company (AMC) manages funds across the entire risk-return spectrum; its offerings include equity, debt, and hybrid mutual funds. Moreover, it also provides solution-oriented and closed-ended schemes. 

For the quarter ended March 2021, the AMC has a quarterly AUM of approximately Rs.61,684 and offers more than 150 schemes, including the best TATA debt mutual funds

Debts funds invest in fixed-income securities, for example, corporate bonds, government securities, commercial paper, certificate of deposits, treasury bills, debentures, etc. They’re known to offer stability to investors by delivering low-risk returns that are higher than bank fixed deposits. Moreover, unlike equity mutual fund schemes, the returns generated by top TATA debt mutual funds are not impacted by stock market fluctuations. 

There are more than 60 types of TATA debt mutual fund schemes. These allocate funds to debt and money market instruments across different Macaulay durations and credit risk spectrum. Schemes that invest in securities with a short maturity period mainly earn from interest payments; whereas, funds with a long Macaulay duration generate earnings from capital gains and interest coupons. 

In comparison to most asset categories, debt instruments are extremely liquid. Investors are able to redeem their units in debt funds at their convenience. Moreover, there are tax benefits in the case of these mutual fund schemes, as TDS is not applicable to debt funds. 

Taxability

Here’s how gains from debt funds are taxed:

Long-term Capital Gains Tax: If an investor sells his/her units in a debt fund after holding them for more than three years, the returns earned from such a sale are termed long-term capital gains (LTCG). A tax rate of 20% is applicable on such gains. Also, investors can avail the indexation benefit. 

Short-term Capital Gains Tax: In case investors sell their holdings before three years from the date of purchase, their returns are added to their taxable income and taxed per the applicable slab rate. 

Factors to Consider Before Investing

Nevertheless, investing can be complicated as different asset classes come with their own set of characteristics. Hence, before individuals invest their savings, they might want to consider certain key things that would help them determine which is the best TATA debt mutual fund scheme for them. Let’s delve into its various aspects. 

Investment goal: Different types of mutual fund schemes have contrasting objectives. While equity mutual funds are known to generate high returns and maximise long-term portfolio value, debt funds offer stability to investors as they are immune to market fluctuations. Thus, for investors, it’s vital to identify their financial goal before parting with their savings. 

Risk appetite: While the best TATA debt mutual funds 2021 are not impacted by market volatility, they are not free of risk. They are associated with credit risk, interest rate risk, inflation risk, etc., unlike bank fixed deposits. Hence, investors must assess their risk profile before buying units of debt mutual funds.

Credit risk of underlying securities: The fixed income securities are rated by credit rating agencies based on the creditworthiness of issuers. Debt instruments that have a AAA rating are associated with the lowest credit risk; whereas, securities with a C rating have high default risk. 

Maturity period: Similar to other schemes of this category, even the best TATA debt mutual funds are impacted by changing interest rates. The longer the Macaulay duration, the more a debt fund will be prone to interest rate changes. In a falling interest rate regime, a debt fund that invests in securities with a long maturity period will perform well. On the flip side, in a rising interest rate regime, a debt fund will potentially do well if the underlying debt instruments have a short Macaulay duration.   

Assets under management (AUM): AUM refers to the market value of investments held by a mutual fund. Debt funds having a high AUM can distribute the fixed expenses of the scheme across its subscribers. That said, AUM or any other factor cannot be the sole reason why you invest or do not invest in a fund.

Expense ratio: This is a maintenance fee that a fund house charges its investors to cover the portfolio management expenses. It includes administrative and operating costs, which includes the salary of a fund manager, advertisement expenses, allocation charges, etc. It varies from one AMC to another and has a direct impact on the returns earned by an investor. Hence, individuals must make sure to compare the expense ratios of the best TATA debt mutual funds when choosing a scheme. 

Trailing performance of a fund: The past performance of a fund doesn’t determine its future returns. However, the historical returns of a scheme can give an idea if the fund has been able to achieve its pre-determined objectives. For investors, it is vital to consider this aspect when figuring out which is the best debt mutual fund for them

Direct or regular plan: An investor can opt for a direct plan of a mutual fund scheme without the involvement of any third party such as brokers or distributors. Hence, AMCs do not have to pay any commission, which reduces the expense ratio. On the contrary, regular plans require the involvement of third parties, and thus they have a higher expense ratio. Also, they report a lower NAV in comparison to a regular plan. 

Investment route: Individuals can invest in the best TATA debt mutual funds via two investment routes – SIP and lumpsum. SIP stands for a Systematic Investment Plan, which allows one to invest in a debt fund scheme via fixed instalments pay at regular intervals – monthly, quarterly, annually, etc. Whereas by choosing to invest via the lump sum mode, investors can allocate the entire amount to a scheme all at once.

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Top 10 Tata Mutual Funds

Fund NameCategoryRisk1Y ReturnsRatingFund Size(in Cr)
Tata Digital India FundEquityVery High85.3%4₹3,842
Tata India Consumer FundEquityVery High34.6%2₹1,344
Tata Equity PE FundEquityVery High33.8%3₹5,168
Tata Ethical FundEquityVery High46.5%3₹1,091
Tata Income FundDebtModerate3.4%3₹57
Tata Banking and Financial Services FundEquityVery High24.9%4₹856
Tata India Tax Savings FundEquityVery High36.8%3₹2,998
Tata Money Market FundDebtModerate4.1%5₹7,126
Tata Hybrid Equity FundHybridVery High30.0%2₹3,428
Tata Flexi Cap FundEquityVery High34.1%3₹2,159
Tata Retirement Savings FundSolution OrientedVery High27.0%3₹1,608
Tata India Pharma & HealthCare FundEquityVery High21.4%2₹558
Tata Retirement Savings FundSolution OrientedVery High30.6%3₹1,223
Tata Index Sensex FundOtherVery High29.3%4₹104
Tata Liquid FundDebtLow to Moderate3.3%4₹8,688
View All Top 10 Tata Mutual Funds

Let's have a closer look

Now let us jump and check about these top 10 mutual fund schemes.

Tata Digital India Fund Direct Growth

Fund Performance: The Tata Digital India Fund has given 41.73% annualized returns in the past three years and 35.76% in the last 5 years. The Tata Digital India Fund belongs to the Equity category of Tata Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Tata Digital India Fund via lump sum is ₹5,000 and via SIP is ₹150.

Min Investment Amt₹5,000
AUM₹3,842Cr
1Y Returns85.3%

Tata India Consumer Fund Direct Growth

Fund Performance: The Tata India Consumer Fund has given 15.74% annualized returns in the past three years and 22.46% in the last 5 years. The Tata India Consumer Fund belongs to the Equity category of Tata Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Tata India Consumer Fund via lump sum is ₹5,000 and via SIP is ₹500.

Min Investment Amt₹5,000
AUM₹1,344Cr
1Y Returns34.6%

Tata Equity PE Fund Direct Growth

Fund Performance: The Tata Equity PE Fund has given 16.64% annualized returns in the past three years and 15.7% in the last 5 years. The Tata Equity PE Fund belongs to the Equity category of Tata Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Tata Equity PE Fund via lump sum is ₹5,000 and via SIP is ₹500.

Min Investment Amt₹5,000
AUM₹5,168Cr
1Y Returns33.8%

Tata Ethical Direct Plan Growth

Fund Performance: The Tata Ethical Fund has given 23.37% annualized returns in the past three years and 18.87% in the last 5 years. The Tata Ethical Fund belongs to the Equity category of Tata Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Tata Ethical Fund via lump sum is ₹5,000 and via SIP is ₹150.

Min Investment Amt₹5,000
AUM₹1,091Cr
1Y Returns46.5%

Tata Income Fund Direct Growth

Fund Performance: The Tata Income Fund has given 8.84% annualized returns in the past three years and 6.56% in the last 5 years. The Tata Income Fund belongs to the Debt category of Tata Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Tata Income Fund via lump sum is ₹5,000 and via SIP is ₹500.

Min Investment Amt₹5,000
AUM₹57Cr
1Y Returns3.4%

Tata Banking and Financial Services Fund Direct Growth

Fund Performance: The Tata Banking and Financial Services Fund has given 16.98% annualized returns in the past three years and 18.31% in the last 5 years. The Tata Banking and Financial Services Fund belongs to the Equity category of Tata Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Tata Banking and Financial Services Fund via lump sum is ₹5,000 and via SIP is ₹500.

Min Investment Amt₹5,000
AUM₹856Cr
1Y Returns24.9%

Tata India Tax Savings Fund Direct Growth

Fund Performance: The Tata India Tax Savings Fund has given 19.69% annualized returns in the past three years and 18.17% in the last 5 years. The Tata India Tax Savings Fund belongs to the Equity category of Tata Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Tata India Tax Savings Fund via lump sum is ₹500 and via SIP is ₹500.

Min Investment Amt₹500
AUM₹2,998Cr
1Y Returns36.8%

Tata Money Market Fund Direct Growth

Fund Performance: The Tata Money Market Fund has given 6.47% annualized returns in the past three years and 5.12% in the last 5 years. The Tata Money Market Fund belongs to the Debt category of Tata Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Tata Money Market Fund via lump sum is ₹5,000 and via SIP is ₹500.

Min Investment Amt₹5,000
AUM₹7,126Cr
1Y Returns4.1%

Tata Hybrid Equity Fund Direct Plan Growth

Fund Performance: The Tata Hybrid Equity Fund has given 14.74% annualized returns in the past three years and 12.4% in the last 5 years. The Tata Hybrid Equity Fund belongs to the Hybrid category of Tata Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Tata Hybrid Equity Fund via lump sum is ₹5,000 and via SIP is ₹500.

Min Investment Amt₹5,000
AUM₹3,428Cr
1Y Returns30.0%

Tata Flexi Cap Fund Direct Growth

Fund Performance: The Tata Flexi Cap Fund has given 18.85% annualized returns in the past three years and null% in the last 5 years. The Tata Flexi Cap Fund belongs to the Equity category of Tata Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Tata Flexi Cap Fund via lump sum is ₹5,000 and via SIP is ₹500.

Min Investment Amt₹5,000
AUM₹2,159Cr
1Y Returns34.1%

Tata Retirement Savings Fund Moderate Plan Direct Growth

Fund Performance: The Tata Retirement Savings Fund has given 16.26% annualized returns in the past three years and 16.47% in the last 5 years. The Tata Retirement Savings Fund belongs to the Solution Oriented category of Tata Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Tata Retirement Savings Fund via lump sum is ₹5,000 and via SIP is ₹500.

Min Investment Amt₹5,000
AUM₹1,608Cr
1Y Returns27.0%

Tata India Pharma & HealthCare Fund Direct Growth

Fund Performance: The Tata India Pharma & HealthCare Fund has given 27.07% annualized returns in the past three years and 15.25% in the last 5 years. The Tata India Pharma & HealthCare Fund belongs to the Equity category of Tata Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Tata India Pharma & HealthCare Fund via lump sum is ₹5,000 and via SIP is ₹500.

Min Investment Amt₹5,000
AUM₹558Cr
1Y Returns21.4%

Tata Retirement Savings Fund Progressive Plan Direct Growth

Fund Performance: The Tata Retirement Savings Fund has given 18.08% annualized returns in the past three years and 18.77% in the last 5 years. The Tata Retirement Savings Fund belongs to the Solution Oriented category of Tata Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Tata Retirement Savings Fund via lump sum is ₹5,000 and via SIP is ₹500.

Min Investment Amt₹5,000
AUM₹1,223Cr
1Y Returns30.6%

Tata Index Sensex Direct

Fund Performance: The Tata Index Sensex Fund has given 17.48% annualized returns in the past three years and 17.87% in the last 5 years. The Tata Index Sensex Fund belongs to the Other category of Tata Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Tata Index Sensex Fund via lump sum is ₹5,000 and via SIP is ₹150.

Min Investment Amt₹5,000
AUM₹104Cr
1Y Returns29.3%

Tata Liquid Fund Direct Growth

Fund Performance: The Tata Liquid Fund has given 4.91% annualized returns in the past three years and 5.77% in the last 5 years. The Tata Liquid Fund belongs to the Debt category of Tata Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Tata Liquid Fund via lump sum is ₹5,000 and via SIP is ₹500.

Min Investment Amt₹5,000
AUM₹8,688Cr
1Y Returns3.3%

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