When Should You Start Investing in Debt Funds?
We’re always told that when it comes to investments, it’s never too early to start, especially with equities.
But you should also look at the big picture & understand what your goals are.
Debt vs Equity
With equity, starting early gives you an edge & a potentially positive impact on growth.
With debt funds, compounding returns is usually not the objective with which they are managed.
They can hold your money for short periods of time (1 month to 5 years).
They are ideal if you are looking for relatively low risk, stable-return investments where money can be accessed soon.
Pick Your Goals
Evaluate what your short-term goals are and pick the appropriate debt fund to match it.
Debt funds can be used as a regular form of income after retirement, considering that they have relatively lower volatility as compared to equity funds.
Debt funds also serve as a good option over equity when you are close to completing your long-term financial goals and want to save capital by investing in a low-risk product.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.