Pls suggest best Debt mutual funds to replace FDs

[SnakeBob]

Hi all. I'm very new to technofino community but it's a wonderful community to learn about credit card points and other neat tips and tricks.
My question is, I'm planning to replace my FDs which give 5 to 5.5% return with no tax benefit (except 80c which is full already) with debt mutual funds. Can experts and like-minded people suggest good debt mutual funds for long term (7+ years), good returns (7.5%+ returns)? Also suggest if SIP or lump sum would be better or are they both same considering number of years and stability of debt funds.

 

[bugmenot]

Go for money market and ultra short term fund. If you have fixed horizon, target maturity fund is best option.

Don't time the interest rate cycle.

 

[karankayastha]

Have a look at T-bills in rbi retail direct the interest rate is amazing you can get upto 7% in 1 yr

 

[way2gud]

Parag Parikh Conservative Hybrid Fund. Not traditional Debt fund, has an Equity(10%) + REIT component. YTM is 7.6% and Avg maturity year is 5yrs

 

[SnakeBob]

Go for money market and ultra short term fund. If you have fixed horizon, target maturity fund is best option.

Don't time the interest rate cycle.

Hi. Thanks for the input. Target maturity debt funds are indeed wonderful. Only thing I can see is they are not 100% risk free like a G-Sec. I will look into them definitely for tax exemptions and the roi.

 

[SnakeBob]

Have a look at T-bills in rbi retail direct the interest rate is amazing you can get upto 7% in 1 yr

Tbills are great instruments along with bonds. One issue though is that interest is credited bi-annually to your bank account linked to demat and this interest will be taxed as income from other sources (regular IT slab).

 

[SnakeBob]

Parag Parikh Conservative Hybrid Fund. Not traditional Debt fund, has an Equity(10%) + REIT component. YTM is 7.6% and Avg maturity year is 5yrs

Great input. I have always thought that conservative hybrid funds get taxed like regular equity funds. I just read and understood that we get LTCG along with indexation benefit which is great. YTM is pretty good for long term investments.

 

[bugmenot]

Hi. Thanks for the input. Target maturity debt funds are indeed wonderful. Only thing I can see is they are not 100% risk free like a G-Sec. I will look into them definitely for tax exemptions and the roi.

There are few target maturity funds which contains SDLs - State Development Loans. They are near equivalent to G-Sec.

 

[schatterjee18]

The timeline is very imp as debt funds will have underlying securities which can be 1yr 3yr or 5-7yrs also.
Then you can decide ultra short, short or money market fund etc.

 

[Deleted member 9785]

Very Important Development:

https://www.financialexpress.com/money/mutual-funds/long-term-capital-gains-in-debt-mutual-funds-set-to-go/3020418/