Professionally managed: These are managed by professional fund managers who have expertise in selecting the right investment opportunities. Thus, it saves the investor’s time and effort in researching.
Diversification: A debt fund invests in various types of debt securities, reducing an underperforming bond’s negative impact on the overall portfolio.
Automatic income reinvestment: Income from bonds can be automatically reinvested into the fund, consistently adding to its value.
Liquidity: The investor may invest and withdraw his money at any time he likes.
Affordability: Anyone can start investing for as little as Rs.500 in the debt fund.
Safety: Debt funds are a relatively safer investment option because they are generally fixed-income investments, but they do not guarantee returns.
Tax Benefits: Investors of Long term Debt Funds pay less tax than other products such as Fixed Deposits, Kisan Vikas Patra, etc due to indexation
