Investors, who are looking for higher returns on small savings, have started investing into debt funds. When it comes to investment, debt funds allow you to diversify and gain stability and growth at the same time. Diversifying debt mutual funds, not only enables investor gain stability but also mitigate risk. Debt funds invest in variety of instruments like commercial paper, Bank CD, corporate bonds or government securities.
One of catchiest benefits is that there is no TDS in Debt funds. If the investor holds funds for 3 years, he/she can avail benefits of indexation, with minimized tax outflow. Liquidity in Debt Mutual funds comes as a plus to investor, where he/she can withdraw invested amount whenever desired.