Indian people are not aware of investment instrument available in India. Most of the people assumes investment can be made for long term. But that is far from truth. We can invest money for even one day in mutual funds. Money would be invested in fixed deposit and bonds by debt mutual funds. Investment can be made for even 1 day in mutual funds.
Investment can be made for even one day in mutual funds.
DEBT MUTUAL FUNDS:
Debt Mutual Funds mainly invest in a mix of debt or fixed income securities such as Treasury Bills, Government Securities, Corporate Bonds, Money Market instruments and other debt securities of different time horizons. Generally, debt securities have a fixed maturity date & pay a fixed rate of interest. The option available in Debt instruments are huge based on our investment horizon. Debt instruments are FDs, Bonds, debt based Mutual Fund Scheme such as Short Term Funds, Gilt Funds, Liquid Funds.
1- 2 days:
Overnight debt mutual Fund invest in overnight instruments with maturity of 1 day. L&T Cash Fund,SBI Overnight Fund and HDFC Overnight Fund are designed for one day investments in debt mutual funds.
1 to 90 days :
Liquid debt mutual funds invest in bonds and money market instruments with maturity 0 to 90 days. Top liquid mutual funds are L&T Liquid Fund, HDFC Liquid Fund (G) and LIC Liquid Fund.
3 months to 6 months :
Ultra short Debt mutual funds select bonds/debt for investment such that average maturity (remaining) period for portfolio is between 3 to 6 months. Top ultra short debt funds are L&T Ultra Short Term, SBI Magnum Ultra Short Duration and Kotak Savings Fund.
6 months to 12 months:
Low duration funds selects bonds/debt for investment such that average maturity (remaining) period for portfolio is between 6 to 12 months. For example, SBI Magnum Low Duration , Axis Treasury Advantage ,DSP Low Duration Funds.
12 months to 24 months:
Gilt mutual funds invest mostly in government bonds for 12 to 24 months investments. Government bonds are considered the safest investment in the country. Top gilt mutual funds are Edelweiss G-Sec. Fund, DSP Government Securities and Reliance Gilt Sec.
Do not worry about investment horizon on mutual funds. There are multiple choice in mutual funds based on your needs. More than 20 categories of funds to grow your money in the market. Learn mutual funds and start investing.