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Updated by Subhraleena Deka on Dec 08, 2014
Headline for Types of Debt Funds in India
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Types of Debt Funds in India

The schemes containing non-equity mutual funds in India have a new set of rules now. The long term gains in such funds would be derived only once the investments are held for more than a period of 3 years or 36 months. Tax benefits have also been increased from 10 per cent to 20 per cent. This has increased the status of such mutual funds. Now people can benefit from these as much as real estate investments or equity funds.
Here are the different categories of debt funds which you can look in to...

1

Ultra Short Term Funds

Ultra Short Term Funds

Such types of funds are first and foremost utilized only if you have some very short term goals in mind. The end returns in such funds are best for utilization in emergencies.

2

Short Term Funds

Short Term Funds

This type of funds is also taken in to account for short-term goals. When you need the increased funds within a period of 6 months to 1 year, this is the type of fund you should resort to. The long term taxation is now applicable only if the term goes past three years.

3

Fixed Maturity Plans

Fixed Maturity Plans

This was considered not s a very suitable plan by many. The double indexation profit helped depositors enjoy rewarding gains by investing resources even for a short duration. But the new budget has made it more attractive. There are no tax advantages in a period of 1 to 3 years time.

4

Monthly Income Plans

Monthly Income Plans

Monthly Income Plans were considered ideal for gathering standard income needs. People preferred this after retirement before. But now the definition for long-term investment has been increased to 3 years or more. Moreover, there has been a removal of 10 per cent of indexation provisions. This has forced old investors to re-think and re-plan

5

Dynamic Bond Funds

Dynamic Bond Funds

Such funds have the capability to provide stable returns even during economic instability up to an extent. If one invests for a long term like 5 to 6 years, the funds hold an excellent promise.

6

Income and Gilt Funds

Income and Gilt Funds

Long term goals in mind? Then this is the type of fund for you. It gives stable outcome if invested for long terms, but very volatile if dine for short terms.