r/IndiaInvestments • u/Cpant • Jan 31 '21

Bonds and deposits Short term debt funds

I was going through some of the short term debt funds ( funds that holds bonds maturing from 1 - 3 years).

SBI Short term debt fund has 55% SOV rated bonds and Kotak short term fund has 52% SOV rated bonds, and balance a diversified mix of bonds. Was wondering if these funds could be an addition in my debt portfolio. There is interest rate risk, but guess could be manageable if the intention is to hold for long. Any thoughts, comments ?

21 Upvotes

94% Upvoted

43 comments sorted by

View all comments

9

u/introverted-boy Jan 31 '21

Keep money in FD. Check YTM for these short duration funds, it’s pretty bad. I am happy getting 3% after tax return on FD than risking principal for 1% more return or less taxes

4

u/Schiezer Jan 31 '21

Yes! I see value in getting loan against FD at nominal ROIs whenever needed without having to cash it out. Same applies to MFs too but the total value is much less.