Debt Funds, also referred to as fixed income funds, are mutual fund schemes that primarily invest in securities that generate a fixed income. These securities include Certificate of Deposit, Commercial Paper, T-Bills, Government Securities, Corporate Bonds, and other fixed income instruments. Investors in these funds are promised a regular stream of income in the form of interest or dividends. They are considered a safer investment option compared to equity funds, as they offer stability and a lower risk of loss. However, it is important to note that debt funds also carry a certain level of risk depending on the type of securities they invest in.
