The document outlines the classification and recommended investments for debt mutual funds, highlighting their advantages such as higher returns compared to savings accounts and bank fixed deposits. It discusses post-tax returns for various types of funds based on different income tax slabs and investment tenures. Additionally, it suggests suitable options for risk-averse investors looking for fixed maturity plans and income funds.

1. Classification of Debt Mutual Funds
Recommended Investments of these are primarily Annualised
Scheme Type Advantages
Duration into Return,%
1. Higher return compared
to Savings account
Bank Certificate of Deposit, Inter bank 2. Post tax returns of
Ultra Short Term Funds Less than 30 days 6.50%
Treasurary Notes, RBI Bonds superior to Bank FDs if you
are in 20% or 30% income
tax slab
Post tax returns of superior
Liquid Funds 3 to 6 months RBI Bonds, Corporate Debentures 7.0 - 8% to Bank FDs if you are in
20% or 30% income tax slab
Corporate Bonds, Bank Certificate of
As per their Tenure, Deposits. The maturity of these Post tax returns of superior
Fixed Maturity Plans(FMP) FMPs are available investments will match with the 8.0 - 9.5% to Bank FDs if you are in
for 3,6,9,12 months Tenure of these FMP, eleminating the 20% or 30% income tax slab
Interest Rate Risk
Credit rated Corporate Bonds, For Risk averse investors
Income Funds 12 months or more Debentures, State and central govt 8.0 - 12% with long term investment
bonds horizon
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