Can Debt Funds Be Useful In Beating Inflation? Find Out

Debt funds are mutual funds that invest in fixed income securities like bonds and treasury bills, corporate bonds, commercial papers and government securities

Debt funds are mutual funds that invest in fixed income securities like bonds and treasury bills, corporate bonds, commercial papers, government securities, and other market instruments. These funds have a fixed date for maturity. Even their interest rate is fixed. Because of these 2 reasons, debt funds are also known as fixed-income securities. Market fluctuations usually don't affect the returns on these tools. So, debt funds are considered to be low-risk investment options. Individuals who do not want to invest in a highly volatile equity market prefer to invest in debt funds. A debt fund provides a steady income and is comparatively less volatile. Investors who want to secure their portfolio against inflation, which brings down the real rate of interest of fixed-income investments, put their money in debt funds. How To Invest You can invest in debt fund schemes through an asset management company or an online platform.