What are the Various Types of Debt Mutual Funds

By techsupport15 | Updated: July 29, 2024, 5:25 a.m.

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The main objective of debt mutual funds is capital preservation and or income generation. And in this video you will learn about the types and basics of debt mutual funds. They are preferred mostly by risk averse investors unwilling to invest in equity markets These funds invest in fixed income instruments such as bonds, company deposits, treasury bills, money market instruments and so on. *The content of this video is powered by PersonalFN.

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What are the Various Types of
Debt Mutual Funds
The main objective of debt mutual funds is
 capital preservation and or 
income generation.

Debt fund is preferred mostly by risk averse investors unwilling to invest in equity markets

BUY

SELL
BUY

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These funds invest in fixed income instruments such as..

Bonds

Company Deposits

Treasury Bills

Money market instruments 
and so on.

Types of Debt Mutual Fund and their Basics

1.	Liquid Fund
Invest In Securities Like
Money market instruments maturing within 90 days
Very Low
Interest Rate Risk
Less than 3 months
Your Investment Time Horizon
Very High
Your Liquidity Needs
%
< 3months
Liquid Fund
2. Liquid Plus Fund
Invest In Securities Like
Money market instruments with maturity more than 
90 days

Low
Interest Rate Risk
3 to 6 months
Your Investment Time Horizon
Very High
Your Liquidity Needs
%
3 - 6 months
Liquid Plus Fund
3.	Floating Rate Fund
Invest In Securities Like
Short-term instruments offering flexible interest rates
Low
Interest Rate Risk
6- 12 months
Your Investment Time Horizon
Medium
Your Liquidity Needs
%
6-12 months
Floating Rate Fund
4.	Short-term Income Fund
Invest In Securities Like
Short-term bonds, deposits and NCDs. It may invest in T-bills 
& G- Secs. maturing within 3 years

Medium
Interest Rate Risk
1 year and above
Your Investment Time Horizon
Medium
Your Liquidity Needs
%
>1 year
Short-term Income Fund
5.	Fixed Maturity Plan
Invest In Securities Like
Bonds and NCDs with maturity profile in line with the horizon of the scheme

Medium
Interest Rate Risk
Mandatorily hold till scheme maturity
Your Investment Time Horizon
Low
Your Liquidity Needs
%
Hold till maturity
Fixed Maturity Plan
6.	Dynamic Bond / Flexi-Debt Fund
Invest In Securities Like
Short term and long-term bonds & NCDs. 
It may invest in G-Secs with maturity 
less than 5 years

Medum - high
Interest Rate Risk
2 to 3 years
Your Investment Time Horizon
Low
Your Liquidity Needs
%
2 to 3 years
Dynamic Bond / Flexi-Debt Fund
7.	Long-term Income Fund
Invest In Securities Like
Bonds, debentures or 
G-Secs with maturity period of 5 - 10 years

High
Interest Rate Risk
Less than 3 months
Your Investment Time Horizon
3 - 5 years
Your Liquidity Needs
%
< 3 months
3- 5 years
Long-term Income Fund
8.	Gilt Fund
Invest In Securities Like
Securities issued by the Central and State Government

Very High
Interest Rate Risk
3 to 10 years
Your Investment Time Horizon
Low
Your Liquidity Needs
%
3 -10 yrs
Gilt Fund

Choose a debt fund which is in line with your investment objective, horizon and risk appetite. 
3-6 months
1-3 years
2 to 3 years
3 to 5 years
3 to 10 years
6-12 months
Liquid Fund and Liquid Plus Fund
Floating Rate Fund
Short-term Income Fund
Gilt Fund
Fixed Maturity Plan
Dynamic Bond Fund
Long Term Income Fund
Risk Averse Investor
Risk Taker Investor
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What are the Various Types of Debt Mutual Funds

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