Mutual funds have gained popularity over the last two decades. However, for the average investor, particularly the salaried class, investments in mutual funds have been mostly in equity mutual funds. For lower risk investments, bank FDs have remained the top choice compared to the other type of mutual funds – debt mutual funds.
Debt mutual funds function the same way as equity mutual funds, however, as the name suggests, they invest in various debt and fixed income products. These include various bonds, treasury bills, corporate deposits, government securities and money market instruments.Sounds complicated? Let us limit ourselves by understanding that they lend money to various borrowers and earn interest on the money lent. The borrowers are the Government, which is one of the largest borrowers, and various corporate bodies. These borrowers issue “receipts” for the money they have borrowed, which are called bonds, certificates, securities, etc. Continue reading “Debt Mutual Funds – A better alternative for low risk Investments”
Suppose you come into a substantial amount of cash that you don’t need right away. What do you do with this surplus fund? Being an informed investor, you know that you should invest it. However, with the plethora of investment options available, it can be quite challenging to choose the right investment. After all, you don’t want to lose money or make lower returns, do you? So while you take your time researching your options and deciding upon the best investment, your money sits idle in your bank account, doing nothing. Continue reading “Where to Invest your Surplus Funds”
In financial terms, an investment is an asset that is expected to generate income or appreciate in value in the future. Simply put, an investment is a product that you put your money into expecting to make a profit.
For most of us who started working in the early 2000s or even earlier, probably our first investment would have been a bank fixed deposit or a LIC policy. While these traditional forms of investing still remain a favourite among many, there are other better investment alternatives which offer much superior returns; and many of us have moved on to such alternatives.