Fixed Deposit vs. Debt Investment Fund Anyone who should invest knows the returns, benefits and risks

New Delhi. Everyone wants to make money with money. But this wish is not fulfilled. The reason for this is the lack of financial planning. Every man should invest considering his needs and risk factor. Fixed deposit is considered a safe investment. But one of its downsides is that it doesn’t get a lot of returns. Therefore, many investors are now looking for investment opportunities where the return is high, but the risk of the money going under is lower. If you are also looking for a similar option, consider investing in Debt Funds. Debt funds are also referred to as liquid funds.

Investing in debt funds is less risky. It is also stable in the ups and downs of the market. So far it has been observed that debt funds have achieved higher returns than FDs. Debt funds are considered short-term investments. Debt funds have market-related risk. That’s why you shouldn’t invest blindly. First of all, the associated wins and losses should be known very well.

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Where do credit funds invest?
These are very safe mutual funds. You invest in fixed income securities. This investment has a term of 91 days or 3 months. Debt funds invest in treasury bills, commercial paper, government bonds, government securities, and debentures. So if you want to grow your hard-earned money in less time and take less risk, then you can invest in debt funds.

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One thing to keep in mind is that in such an environment, as interest rates rise in the market and borrowing becomes more expensive, this investment is proving to be a good option. Because there is an inverse relationship between bond prices and interest rates. Keep in mind that debt funds are not entirely risk free. In addition, a short-term and long-term capital gains tax is levied on the income generated from it.

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