In which fund category can one make lump-sum investments?
Dhirendra Kumar discusses the suitability of debt funds for making one-time investments
Jul 11, 2019
Is there any fund wherein we can invest a lump-sum amount like we do in a fixed deposit? And will this be feasible in the long term?
For lump-sum investments, only debt funds are the ones to choose from. Of these, liquid and ultra-short-duration funds should be your choice. Recently, SEBI has introduced new norms for liquid funds to make them safer.
However, for a first-time investor like you, a careful analysis should be conducted before choosing a fund. You should opt for a fund that neither has any questionable debt nor a lower-rated debt instrument.
I would like to add a word of caution, always invest a lump-sum amount in a debt fund instead of considering an equity fund.