11 Advantages Of Debt Mutual Funds

1. Debt funds are best option for an investor with low risk appetite. 2. Diversification: On an average a debt fund holds 10+ different paper. So there is no single party risk and diversification. 3. Your investments are not affected by equity market volatility. 4. Debts fund are highly liquid which can be easily converted in to cash that too within a day time. 5. Divisibility: Unlike a bank FD, a debt mutual fund can be broken into units of Rs 1  e.g. If someone has a 5 lac debt mutual fund and needs to withdraw just Rs 10000 he can do that while in the FD whole 5 lacs need to broken, this provides great flexiblity in managing money. 6. Add stability to your investment portfolio. 7. No deduction of taxes or TDS on the earning from debt funds. Taxes to be paid only when an investor sell or withdraw fund units and depending on period of the investment.