Fundwire

Make sense with short-term debt funds

Consider investing in short-term debt funds in case of fast approaching non-negotiable goals...

Financial goals are of two types; those that are time bound such as a child's education and those that are flexible such as a vacation or purchase of a car. For a regular investor, the worry is always on being able to save enough for the definite goal. To reduce the investor anxiety, investors should consider moving their equity investments to short-term debt funds. The reason for such an approach is to protect the corpus from the volatility that equity investments pose.

When investing in these funds, consider the growth option over dividend, to save your investments from the DDT (Dividend Distribution Tax), which is deducted by AMCs before paying out dividends. You can make lump sum investments in short-term debt funds, which invest in government bonds, bank Certificate of Deposits and corporate papers with average maturity between one and 4.5 years



Ask Value Research aks value research information

No question is too small. Share your queries on personal finance, mutual funds, or stocks and let us simplify things for you.


Other Categories