SBI Debt Mutual Fund offers 29 different types of mutual fund schemes under the debt mutual fund category. The total AUM belonging to SBI AMC schemes as on March 2023 is Rs 686,893 crores. The debt schemes include liquid funds, gilt funds, corporate bond funds, ultra short to long duration funds, banking and PSU funds, money market funds, and credit risk funds.
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SBI Debt Funds are less volatile in comparison to equity funds. This is because, unlike equity funds, debt funds invest predominantly in fixed income earning debt instruments. An investor who has traditionally invested in fixed deposits, recurring deposits, and parking funds in savings accounts should consider debt funds over these options. SBI Debt schemes are less volatile and have the potential to deliver returns higher than FDs and savings accounts. It also depends on the investment objective and ultimate goals. Hence, SBI debt funds are suitable for an investor who wishes to park his or her emergency or surplus funds for a shorter duration. A short term can be defined as a period of less than 12 months. Moreover, many investors consider SBI debt schemes as an effective measure to diversify portfolios across asset classes.
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If an investor holds units of SBI Debt Mutual Funds for more than 36 months then long term capital gain will arise. This LTCG on SBI Debt Mutual Funds is taxable at a rate of 15%. On the sale of SBI Debt Mutual Funds before 36 months short term capital gain will arise. This STCG is taxable at slab rates. The STCG is added to the gross total income for the financial year.
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