This cannot be answered unless the tax bracket one belongs is mentioned.
Money market funds or UST funds can be looked at, which can give better returns than FD, considering the low duration bonds they hold, and the indexation benefit if they are held for 3 years.
The default of a bond or a couple of bonds always exist, so one has to be prepared for this. Although to decrease this or even eliminate this, one can look at all the bonds in the PF of the funds and see if any bonds are downgraded, one can even look at the AUM decrease in correspondence with the downgrades, which could indicate a default. Tedious but helps.
Invested in debt funds.
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