Debt funds are subject to credit and interest rate risks that need to be factored in while investing.
Debt funds are often offered as an alternative to bank fixed deposits, especially in a falling interest rate scenario. But are they as safe as FDs? Not really. Debt funds are certainly less volatile than equity funds, but they do not provide guaranteed return like FDs. What they offer instead is potentially higher returns at higher risk. Debt fund investments entail two kinds of risks—credit risk and interest rate risk. What does that mean for your investment?
CREDIT RISK
This story is from the April 1, 2019 edition of India Today.
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This story is from the April 1, 2019 edition of India Today.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
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