What are the different types of Debt Funds?

What are the different types of Debt Funds? zoom-icon
CALCULATORS

Mutual Funds Sahi Hai?

Debt Funds are categorized into different types based on the kind of securities they invest in and the maturity (time horizon) of these securities. Debt securities include bonds issued by corporates, banks and Government, debentures issued by big corporates, money market instruments like commercial papers and certificate of deposits (CDs) issued by banks.

Debt Funds are categorized as follows:

  • Overnight Funds – invest in 1-day maturity papers (securities)
  • Liquid Funds – invest in money market instruments maturing within 90 days Floating Rate Funds - invest in floating rate debt securities 
  • Ultra-Short Duration Funds – invest in debt securities maturing in 3-6 months
  • Low Duration Fund – invest in securities maturing within 6-12 months
  • Money Market Funds – invest in money market instruments with maturity up to 1 year
  • Short Duration Funds – invest in securities 1-3 years maturity
  • Medium Duration Funds – invest in debt securities with 3-4 years maturity
  • Medium-to-Long Duration Funds - invest in debt securities with 4-7 years maturity
  • Long-Duration Funds – invest in long maturity debt (over 7 years)
  • Corporate Bond Funds- invest in corporate bonds
  • Banking & PSU Funds – invest in debts of banks, PSUs, PFIs
  • Gilt Funds – invest in Government bonds of varying maturities
  • Gilt Fund with 10-years Constant Duration – invest in G-secs with 10 year maturity
  • Dynamic Funds – invest in Debt Funds securities across maturities Credit Risk Funds – invest in corporate bonds below highest ratings
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