Are FDs better than debt funds in present times?
5 years, 11 months ago

Are FDs better than debt funds in present times?

Live Mint  

Debt funds are seen as superior to fixed deposits because not only are they capable of generating higher returns but are also more tax efficient. Debt funds provide better returns and a tax incentive Gajendra Kothari, Etica Wealth Management Pvt. Liquid and ultra-short term funds invest in overnight call money that do not have the credit risks, and they also provide better returns compared to fixed deposits. Don’t panic, invest in risk monitoring system instead George Mitra, Avendus Wealth Management George Mitra, Managing director and chief executive officer, Avendus Wealth Management When we choose fixed-income funds over fixed deposits, do we acknowledge the associated risks, including the potential loss of principal, even in so-called “safe” debt investments?

Management Debt Fixed Deposits Investors Fund Funds Returns Debt Funds Credit Risk  fixed  deposits  investors  management  fund  present  funds  better  credit  risk  debt  times  returns  fds

History of this topic

Are instant-redemption liquid funds better than savings accounts or sweep-in FDs?
1 month, 1 week ago

Are instant-redemption liquid funds better than savings accounts or sweep-in FDs?

Live Mint  

Markets regulator Sebi issued a circular on instant redemption in liquid funds in 2017, allowing investors to withdraw up to ₹50,000 or 90% of the money parked in a liquid fund per day, whichever is lower. Liquid mutual funds with instant redemption may seem like a good alternative to traditional savings accounts and sweep-in fixed deposits as they offer higher …

Bank FD vs Corporate FD: Which investment option offers better returns?
1 month, 1 week ago

Bank FD vs Corporate FD: Which investment option offers better returns?

Live Mint  

Fixed Deposits are one of the most preferred investment options in India due to their simplicity, guaranteed returns, and low risk. Key differences between bank FDs and corporate FDs Criteria Bank FD Corporate FD Issuer Banks Corporates or NBFCs Risk Level Low Moderate to high Interest Rates Relatively lower Higher Tenure Options Flexible Generally fixed Credit Rating Not applicable Determined …

Should you look at conservative hybrid funds amid the market rally?
1 month, 2 weeks ago

Should you look at conservative hybrid funds amid the market rally?

Live Mint  

MUMBAI : After correcting nearly 11% from their all-time highs, Indian indices are again witnessing a rally, making investors reassess the best course of action. The higher equity allocation in aggressive MAAFs results in greater net exposure and higher risk, while conservative MAAFs focus more on stability with significant investments in debt and gold. Debt mutual funds remain low-risk investments …

Mutual funds: These tweaks can help your portfolio generate higher returns
1 year, 9 months ago

Mutual funds: These tweaks can help your portfolio generate higher returns

Live Mint  

Mutual funds investment is expected to take some shift in terms of return as Reserve Bank of India has paused interest rates in its recent monetary policy committee meeting. Wealth managers said that debt mutual funds are expected to go back stage as ultra short duration funds, short duration funds and liquid funds may give better returns in short term. …

Debt mutual funds without indexation are still a great investment bet for medium to long duration
1 year, 9 months ago

Debt mutual funds without indexation are still a great investment bet for medium to long duration

Live Mint  

The debt mutual funds have been gaining scale in India driven by the massive increase in the volume of debt securities. Although there has been a structural alteration in investment themes, the debt MFs primarily have been investing in central government securities, corporate bonds, commercial papers, certificates of deposit, T-bills and state development loans. Having said that, the debt mutual …

Debt Mutual Funds Not Fixed Deposit, Has Underlying Risks. Hence, It Requires Tax Benefits Like Equity
1 year, 9 months ago

Debt Mutual Funds Not Fixed Deposit, Has Underlying Risks. Hence, It Requires Tax Benefits Like Equity

ABP News  

In a surprising move, debt mutual fund taxation laws were changed abruptly as the Narendra Modi government amended the Finance Bill 2023. Currently, any capital gain on redemption of a debt fund held for three years or longer is treated as long-term capital gain and is taxed at a flat 20 percent with indexation benefit. Any capital gain on redemption …

Fixed deposit vs debt mutual funds: Which one is better in rising interest rate
2 years ago

Fixed deposit vs debt mutual funds: Which one is better in rising interest rate

Live Mint  

Fixed deposit vs debt mutual funds: Amid rising interst rate regime, a good number of Indian banks are offering fixed deposit interest rates to the tune fo 7 per cent or more. Highlighting the income tax benefit available in debt mutual funds, Amit Gupta, MD at SAG Infotech said, "Interest through FDs is taxable according to your tax bracket. On …

How debt mutual funds are more tax efficient than bank fixed deposits (FDs)?
2 years ago

How debt mutual funds are more tax efficient than bank fixed deposits (FDs)?

Live Mint  

For conservative investors, fixed deposits and debt mutual funds are among the most prominent debt investments. Based on an interview with CA Manish P Hingar, Founder at Fintoo, the spokesperson said “Both Bank Fixed Deposits and Debt mutual funds are suitable for investors with low to moderate risk profiles but a wise choice has to be made between the two …

Bank FD Vs Debt MF: Here's Where You Should Invest To Save More Tax
2 years, 1 month ago

Bank FD Vs Debt MF: Here's Where You Should Invest To Save More Tax

News 18  

Though investment instruments carry with them financial risks, there are options available in the market for risk-averse investors. Debt mutual funds include credit risk, interest rate risk, inflation risk, and reinvestment risk; while FD risks include liquidity risk, default risk, and inflation risk. According to a livemint report, debt funds have generally shown to have delivered better-annualised returns than FDs, …

How rising bank FD rates a challenge for stock market, mutual fund investors?
2 years, 2 months ago

How rising bank FD rates a challenge for stock market, mutual fund investors?

Live Mint  

Portfolio management: Amid hawkish Reserve Bank of India on interest rate hike, various Indian banks have announced fixed deposit interest rate hike in last few months. But, from portfolio diversification perspective, it would definitely bring some challenge for the equity investors as debt mutual funds are expected to regain its shine during high bank interest rate regime. According to experts, …

Debt Funds Saw Big Inflows in August, But Should You Invest in Them Heavily?
2 years, 4 months ago

Debt Funds Saw Big Inflows in August, But Should You Invest in Them Heavily?

News 18  

Debt mutual funds in India saw healthy fund inflows last month, according to the data released by the Association of Mutual Funds of India. This also marks a serious turnaround from the Rs 70,213 crore worth of outflows that debt mutual funds witnessed in the second quarter of 2022. “In fact, we have ‘Moderate return expectations in debt funds’ Viral …

Should you invest in debt funds through SIP?
2 years, 6 months ago

Should you invest in debt funds through SIP?

Live Mint  

Most of us know Systematic Investment Plan and its many benefits. If you don’t have a lumpsum amount to invest in a debt fund It is essential to remember that SIP is just a tool to invest in mutual funds every month. Investing in mutual funds through SIP allows investors to get more fund units when the market is down. …

Debt funds get another layer of safety, equity options increase
4 years, 1 month ago

Debt funds get another layer of safety, equity options increase

Live Mint  

The Securities and Exchange Board of India brought in two new regulations recently that aim to enhance the investment experience in mutual funds. While Sebi’s fund categorization exercise gave investors visibility on the credit and interest rate risks in debt fund categories, liquidity risk couldn’t be assessed easily. “The move creates three layers of protection from liquidity risks—cash buffer, liquid …

Raging retail inflation puts savings plans in disarray
4 years, 2 months ago

Raging retail inflation puts savings plans in disarray

Live Mint  

The unprecedented nature of the covid-19 crisis and economic uncertainty have prompted Indian households to save more during the pandemic, but the raging retail inflationary trends could derail their long-term financial plans. Household financial savings rose from 7.9% of the gross domestic product in Q1FY20 to 21.4% in the three months ended June, while deposits with banks picked up 11% …

How to build low-risk debt portfolio post Franklin fiasco
4 years, 8 months ago

How to build low-risk debt portfolio post Franklin fiasco

Live Mint  

Investors rushed to redeem investments in credit risk funds after Franklin Templeton Mutual Fund shut six of its debt schemes. Experts told Tinesh Bhasin that a combination of certain categories of debt funds along with other products can help build a low-risk debt portfolio Deepesh Raghaw, Founder, PersonalFinancePlan If you want no risk at all, invest in PPF, EPF, FDs …

Debt funds less exposed to risky issuers after IL&FS fiasco: Morgan Stanley
4 years, 8 months ago

Debt funds less exposed to risky issuers after IL&FS fiasco: Morgan Stanley

The Hindu  

The recent events at Franklin Templeton Mutual Fund may have increased the risk of redemptions in debt funds, but a gradual reduction in exposure towards riskier issuers in the last year and a half could limit any further downside risks. According to Morgan Stanley, mutual funds have gradually moved towards better assets after the IL&FS crisis came to the fore …

Five ways in which debt funds score over fixed deposits (FDs)
5 years, 2 months ago

Five ways in which debt funds score over fixed deposits (FDs)

Live Mint  

The restrictions placed on depositors of Punjab and Maharashtra Cooperative Bank and the suspension of interest payment and withdrawal from DHFL fixed deposits were two severe jolts dealt to fixed income investors in the recent past. Returns “These days it is getting simpler to introduce debt funds to clients given the poor post-tax returns on FDs,” said Deepali Sen, founder …

Opinion | One-size-fits-all approach towards debt funds can limit long-term returns
5 years, 3 months ago

Opinion | One-size-fits-all approach towards debt funds can limit long-term returns

Live Mint  

Post the fallout of events in the debt space a year ago, the Securities and Exchange Board of India has taken several measures to streamline investment practices in debt funds. Sebi’s recent circular on the nature of instruments that debt funds can invest in has been made keeping investor protection in mind. A debt investor’s long-term requirements are simple: she …

Debt funds vs fixed deposits: Here are seven reasons why you should invest in MFs
5 years, 3 months ago

Debt funds vs fixed deposits: Here are seven reasons why you should invest in MFs

Firstpost  

Most likely our parents and even most of us grew up partly on a diet of bank deposits, fixed deposits and insurance policies. Of course, we shall largely compare bank FDs with debt funds to make the comparison meaningful. This is a unique advantage that the debt funds enjoy over the bank FDs. Debt funds are increasingly emerging as a …

Tailor your money plan to your risk appetite
5 years, 3 months ago

Tailor your money plan to your risk appetite

Live Mint  

Chennai-based Madan Sudarman and Prerna Madan, both 42, hold the financial values they learnt from their parents close to their hearts. “Our parents were risk averse and predominantly focussed on real estate and jewellery and never took unwanted loans,” said Sudarman. “We invested in debt funds across categories, hoping for better returns than FDs,” said Sudarman. “The defaults from IL&FS, …

Find the best debt fund match for different needs
5 years, 8 months ago

Find the best debt fund match for different needs

Live Mint  

More and more retail investors are now buying debt funds. “What we like to include in investors’ portfolio are debt funds that have minimal interest rate risk and very high credit quality,” said Shyam Sunder, managing director, PeakAlpha Investment Services Pvt. Align funds to needs “The journey of building a mutual fund portfolio begins with articulating a need that is …

Opinion | How to choose among savings accounts, FDs and liquid funds
5 years, 9 months ago

Opinion | How to choose among savings accounts, FDs and liquid funds

Live Mint  

State Bank of India, the country’s largest lender, recently announced that its savings account deposits above ₹1 lakh will earn an interest rate that is linked to the repo rate, an external benchmark, from May 2019. Shaikh Zoaib Saleem asks experts if, in such a situation, it makes sense to stick to bank savings accounts to park one’s surplus money, …

Why mutual funds are running away from risk-free government bonds
5 years, 10 months ago

Why mutual funds are running away from risk-free government bonds

Live Mint  

Debt mutual fund managers are facing a tough time, with credit risk of their assets rising in the aftermath of the IL&FS crisis. Logically, to offset this rising credit risk, one would expect them to pile on risk-free government bonds or at the very least hold on to existing ones. Strangely though, mutual funds have been net sellers of government …

Opinion | Why SIPs in debt MFs should be a part of your overall financial plan
5 years, 10 months ago

Opinion | Why SIPs in debt MFs should be a part of your overall financial plan

Live Mint  

We all know the concept and logic of systematic investment plans, which is to average out the cost of your investments through disciplined purchases, particularly when the market is down. Wherever you are allocating your resources, be it equity funds or debt funds or real estate or alternate investments, the aspect of time-bound availability of money, as and when you …

Nervous Indian firms buy the shortest-term debt they can
6 years, 1 month ago

Nervous Indian firms buy the shortest-term debt they can

Live Mint  

Mumbai: Corporate treasury departments in India have become so concerned about credit risk they’re increasingly parking their cash in securities maturing overnight. Overnight funds could gain more heft if the regulator tightens rules for money-market funds, which in September suffered the worst outflows since at least April 2007 amid defaults at the IL&FS Group. Several fund houses marked down their …

Returns on debt funds decoded
6 years, 3 months ago

Returns on debt funds decoded

Live Mint  

Many investors are unfamiliar as to how debt funds generate returns. There are two components of debt fund returns – price appreciation and rate of interest on the investment. Any debt investment is exposed to various risks, prominent ones being credit risk and interest rate risk. It is possible that the fund may have increased its investments in lower credit …

IL&FS crisis: How real is the risk in debt funds?
6 years, 3 months ago

IL&FS crisis: How real is the risk in debt funds?

Live Mint  

Debt fund investors have been in a tizzy this past month over the downgrades in credit ratings of Infrastructure Leasing & Financial Services Ltd and some of its subsidiaries. A total of about 33 funds had these companies in their portfolios; the cumulative value of these holdings in these funds added up to ₹ 2,308 crore as on August-end 2018, …

The IL&FS knot and the effect on debt mutual funds
6 years, 3 months ago

The IL&FS knot and the effect on debt mutual funds

Live Mint  

Over the last few days, there has been a lot of news and some noise over the 11th-hour downgrade of debt securities issued by some IL&FS group companies. Roughly, ₹ 1,300 crore of total exposure in IL&FS securities was reflecting in short duration funds, including liquid funds that held around ₹ 400 crore. Capital markets regulator Securities and Exchange Board …

Bank fixed deposits (FDs) vs debt funds: What you need to know
6 years, 4 months ago

Bank fixed deposits (FDs) vs debt funds: What you need to know

Live Mint  

For many conservative investors, bank fixed deposits or FDs are their first choice. But many investors are turning towards debt mutual funds, which have the potential to offer higher income tax-adjusted returns and provide more choices. Debt mutual funds primarily invest in a mix of debt or fixed income securities of different time horizons such as government securities, corporate bonds, …

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