Debt mutual fund schemes

These schemes invest in debt securities. Investors should opt for debt schemes to achieve their short-term goals that are below five years. These schemes are safer than equity schemes and provide modest returns. There are 16 sub-categories under the debt mutual fund category.

Overnight funds: These open-ended debt schemes will invest in overnight securities. Investment in overnight securities with a maturity of one day.

Liquid funds: These schemes will invest in debt and money market securities with a maturity of up to 91 days.

Ultra short duration funds: These open ended ultra-short term debt schemes will invest in instruments with a maturity between three months and six months.


Low duration fund: These open-ended debt schemes will invest in instruments with a duration between six months and 12 months.

Money market funds: These open-ended debt schemes will invest in money market instruments with a maturity of up to one year.

Short duration funds: These open-ended debt schemes will invest in instruments with a duration between one year and three years.

Medium duration funds: These open ended debt schemes will invest in instruments with a duration between three years and four years.

Medium to long duration funds: These open-ended debt schemes will invest in instruments with a duration between four years and seven years.

Long duration funds: These open-ended debt schemes will invest in instruments with a duration of greater than seven years.

Dynamic bonds: These open-ended debt schemes will invest across durations.

Corporate bond funds: These open-ended debt schemes will predominantly invest in highest-rated corporate bonds. These schemes should invest at least 80 per cent of total assets in corporate bonds, only in highest-rated instruments.

Credit risk funds: These open-ended debt schemes will invest in below highest-rated corporate bonds. They should invest at least 65 per cent of the total assets in corporate bonds.

Banking and PSU funds: These open-ended debt schemes will predominantly invest (80 per cent of assets) in debt instruments of banks, public sector undertakings and public financial institutions.

Gilt funds: These are open-ended debt schemes will invest in government securities across maturity. These schemes should invest a minimum of 80 per cent of its total assets in G-secs. 

Gilt fund with 10-year constant duration: These open-ended debt schemes will investing in government securities with a constant maturity of 10 years. These schemes should invest at least 80 per cent of the total assets in G-secs.

Floater funds: These open-ended debt schemes will mostly invest in floating rate instruments. These schemes will invest at least 65 per cent of the total asses in floating rate instruments.