A debt fund is a mutual fund that primarily invests in fixed-income securities like bonds, government securities and money market instruments.
It offers regular income through interest payments, making them attractive for investors seeking stable cash flows
Investing in debt funds allows for diversification across a variety of fixed-income securities, reducing risk compared to individual bond investments.
Debt funds provide liquidity as investors can redeem their units at prevailing net asset value (NAV) on business days.
Debt funds are managed by experienced fund managers who analyze credit risks, interest rate movements, and select suitable securities for the portfolio.
Certain debt funds, such as those with indexation benefits, offer tax advantages, potentially reducing tax liability for investors.