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Best SBI Debt Mutual Funds

SBI Debt Mutual Fund offers 23 different types of mutual fund schemes under the debt mutual fund category. The total AUM belonging to SBI AMC schemes as on December 2022 is Rs 700,949 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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Best SBI Debt Mutual Funds to Invest in 2022

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Fund NameScripbox Opinion
Till Date CAGR
SBI Magnum Gilt Fund PF Plan (G)
SBI Magnum Gilt Fund PF Plan (G)

6.3%

6.8%

3.6%

6.5%

6.3%

6.4%

5%

7.8%

6.3%

7.4%

6.4%

7.6%

4.5%

7.1%

6.3%

8%

12.3%

6.2%

8.7%

5.7%

6.5%

7.8%

4.6%

7.3%

4.6%

-

4%

6.9%

4%

6.7%

5.2%

7.4%

5.2%

-

4.4%

7%

5.5%

-

3.9%

6.6%

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Who Should Invest in SBI Debt Mutual Fund?

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.

Recommended: Here You Can Find the Best Debt Mutual Funds to invest in 2022

Things To Consider Before Investing in SBI Debt Mutual Fund

  • Investment Objective: The investment objective of SBI Debt schemes is to generate reasonable returns with lower risk and high liquidity. To achieve its objectives, SBI Debt Mutual Funds invests in fixed income instruments, money market instruments, and government securities belonging to different maturities and risk profiles.
  • Investment Strategy: In agreement with investment goals, the fund managers shall aim to deliver reasonable returns that correspond with low risk. The debt funds optimise risk opportunities while maintaining a low risk within the risk-return matrix. This is also a guiding factor when selecting any suitable investments with low risk. The fund Manager will actively monitor current political conditions, the economic environment, corporate sector performance, general liquidity, and other economic and market considerations. Through this, the fund manager will assess the likely direction of interest rates. Accordingly, they will place the portfolio to make the most of these considerations. 
  • Associated Risk: SBI Debt Mutual Funds carry a lower risk in comparison to equity mutual funds. SBI Debt Mutual Funds carry a risk higher than fixed deposits and similar fixed income products. However, these SBI Debt Mutual Funds also have the potential to deliver higher returns. SBI Debt Funds are subject to interest rate, credit, and liquidity risk.
    As a risk reduction and control technique, the SBI’s (AMC) fund manager will conduct a thorough credit evaluation of the issuer company recommended for investment. The credit evaluation will evaluate the issuer’s area of operations, sector, business model, management, governance, financial strength, future prospects and performance history.
    Recommended: to learn the difference between debt fund and fixed deposit

Tax on SBI Debt Mutual Funds

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.
Recommended: To visit and learn more about Tax on Mutual Funds