Scripbox Logo

What are debt funds?

Debt funds are mutual funds that invest in fixed income securities like treasury bills and bonds. They are generally safer than equity mutual funds. Debt funds are often seen as a tax-efficient alternative to bank FDs.

Debt funds invest in securities of various types: government backed securities, bonds, top rated corporate deposits etc. These securities are usually given a credit rating based on the risk of credit default associated with them. Most debt mutual funds invest in a range of securities depending on their mandate.

Scripbox selection process aims to select funds that provide superior post tax returns compared to FDs with high safety of capital.

Long term Instrument RatingsShort term Instrument RatingsRisk Classification
SovereignSovereignGovernment Backed Instruments - No Credit Risk
AAAA1High Degree of Safety - Lowest Credit Risk
AA

High Degree of Safety - Very Low Credit Risk

AA2

Adequate Degree of Safety - Low Credit Risk

BBBA3

Moderate Degree of Safety - Moderate Credit Risk

BB

Moderate Risk of Default

BA4

High Risk of Default

C

Very High Risk of Default

D

In Default or expected to be in Default on Maturity


Hope we helped! Why not get started with your Scripbox.
If you need further assistance please feel free to reach us at 1800-200-1265