Debt funds invest in fixed-income bonds and securities issued by the government and companies. These fixed-income securities could be corporate bonds, treasury bills, government securities, money market instruments, etc.
Debt funds are the least risky mutual funds, especially when compared to equities. These funds can give an investor the scope to deliver better returns when compared to traditional saving products.
So, investors of debt funds can be assured the least volatility and steady income. Have a look at the best debt funds the market has to offer in 2024.
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| Fund Name | Category | Risk | 1Y Returns | Rating | Fund Size(in Cr) |
|---|---|---|---|---|---|
Aditya Birla Sun Life Medium Term Plan Fund | Debt | Moderately High | 11.7% | 5 | ₹1,920 |
Aditya Birla Sun Life Medium Term Fund | Debt | Moderately High | 7.3% | 5 | ₹1,891 |
HDFC Regular Savings Fund | Debt | Moderate | 6.3% | 5 | ₹5,433 |
ICICI Prudential Dynamic Bond Fund | Debt | Moderate | 4.8% | 5 | ₹1,312 |
UTI Medium to Long Duration Fund | Debt | Moderate | 9.6% | 5 | ₹314 |
Aditya Birla Sun Life Dynamic Bond Retail Fund | Debt | Moderate | 10.4% | 5 | ₹1,700 |
SBI Magnum Gilt Fund | Debt | Moderate | 10.8% | 5 | ₹10,422 |
ICICI Prudential All Seasons Bond Fund | Debt | Moderate | 9.5% | 5 | ₹12,983 |
ICICI Prudential Gilt Fund | Debt | Moderate | 9.1% | 5 | ₹6,633 |
Nippon India Ultra Short Duration Fund | Debt | Moderate | 7.9% | 5 | ₹7,256 |
Nippon India Corporate Bond Fund | Debt | Moderate | 9.2% | 5 | ₹4,618 |
ICICI Prudential Corporate Bond Fund | Debt | Moderate | 8.3% | 5 | ₹26,853 |
Tata Money Market Fund | Debt | Moderate | 8.0% | 5 | ₹24,636 |
Aditya Birla Sun Life Floating Rate Direct Fund | Debt | Low to Moderate | 8.2% | 5 | ₹12,681 |
ICICI Prudential Banking & PSU Debt Fund | Debt | Moderate | 8.1% | 5 | ₹8,929 |
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The individuals who can find debt funds the most suitable are:
As previously mentioned, debt funds are most suitable for investors who are looking forward to investing on the safer side of mutual funds. They are, so far, the most safe mutual funds an individual can choose.
Since they invest in fixed-income underlying assets (such as bonds, treasury bills, and more), they can be a fund an investor faces the least risks with. Market fluctuations and other factors take a very slight toll on these funds, making them most suitable for risk-averse investors.
Bank deposits are sought by investors who do not want to deal with market risks and have stable returns. In the case of debt funds, they offer higher percentages of stable returns than bank deposits and are also the least affected funds when it comes to market conditions.
Individuals can invest in these funds for the short term since they are known to perform well in a short duration.
Unlike equity funds, the risks of debt funds are moderate, and so are the returns that come with it. This means the returns coming from debt funds are low when compared to equity funds. Investors who are comfortable availing of a below-moderate return from their investment can instantly choose one of these funds to start their investment.
The certain factors to be considered while finding the top debt funds for your portfolio are-
Investors can reap the following benefits by investing in the best debt mutual funds:
Credit quality rating: The debt instruments are rated by credit rating agencies in India. Before investing in these funds, individuals can check the credit quality rating to get an idea of the risk level associated with a scheme.
During the research for the best debt funds to invest in 2024, ensure to check the risks mentioned below-
A debt mutual fund is one where the investment portfolio is done in securities and bonds that are known to provide a fixed income.
Historically, debt funds have outperformed bank deposits, such as FDs, for the same tenure. Additionally, the low risks of these funds also make it a good investment choice for investors with the risk-tolerance of choosing bank FDs.
The risks of debt funds are minute, but they are not risk-free. Given that they invest in secure underlying assets such as bonds and securities, with the least investment percentage in equities, it makes them a highly safe investment instrument for risk-averse investors.
Yes, you can easily start with a systematic investment plan, even for debt funds, based on your financial goals.
The kind of investors who can start investing in a debt fund are - short-term investors and investors with a low-risk appetite.
Disclaimer: Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
Now let us jump and check about these top 15 mutual fund schemes.
Fund Performance: The Aditya Birla Sun Life Medium Term Plan Fund has given 14.41% annualized returns in the past three years and 10.33% in the last 5 years. The Aditya Birla Sun Life Medium Term Plan Fund comes under the Debt category of Aditya Birla Sun Life Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Aditya Birla Sun Life Medium Term Plan Fund via lump sum is ₹1,000 and via SIP is ₹1,000.
| Min Investment Amt | ₹1,000 |
|---|---|
| AUM | ₹1,920Cr |
| 1Y Returns | 11.7% |
Fund Performance: The Aditya Birla Sun Life Medium Term Fund has given 13.26% annualized returns in the past three years and 8.91% in the last 5 years. The Aditya Birla Sun Life Medium Term Fund comes under the Debt category of Aditya Birla Sun Life Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Aditya Birla Sun Life Medium Term Fund via lump sum is ₹1,000 and via SIP is ₹1,000.
| Min Investment Amt | ₹1,000 |
|---|---|
| AUM | ₹1,891Cr |
| 1Y Returns | 7.3% |
Fund Performance: The HDFC Regular Savings Fund has given 8.88% annualized returns in the past three years and 8.94% in the last 5 years. The HDFC Regular Savings Fund comes under the Debt category of HDFC Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in HDFC Regular Savings Fund via lump sum is ₹5,000 and via SIP is ₹300.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹5,433Cr |
| 1Y Returns | 6.3% |
Fund Performance: The ICICI Prudential Dynamic Bond Fund has given 8.63% annualized returns in the past three years and 8.38% in the last 5 years. The ICICI Prudential Dynamic Bond Fund comes under the Debt category of ICICI Prudential Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in ICICI Prudential Dynamic Bond Fund via lump sum is ₹5,000 and via SIP is ₹1,000.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹1,312Cr |
| 1Y Returns | 4.8% |
Fund Performance: The UTI Medium to Long Duration Fund has given 8.2% annualized returns in the past three years and 7.26% in the last 5 years. The UTI Medium to Long Duration Fund comes under the Debt category of UTI Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in UTI Medium to Long Duration Fund via lump sum is ₹500 and via SIP is ₹500.
| Min Investment Amt | ₹500 |
|---|---|
| AUM | ₹314Cr |
| 1Y Returns | 9.6% |
Fund Performance: The Aditya Birla Sun Life Dynamic Bond Retail Fund has given 7.72% annualized returns in the past three years and 6.67% in the last 5 years. The Aditya Birla Sun Life Dynamic Bond Retail Fund comes under the Debt category of Aditya Birla Sun Life Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Aditya Birla Sun Life Dynamic Bond Retail Fund via lump sum is ₹1,000 and via SIP is ₹1,000.
| Min Investment Amt | ₹1,000 |
|---|---|
| AUM | ₹1,700Cr |
| 1Y Returns | 10.4% |
Fund Performance: The SBI Magnum Gilt Fund has given 7.4% annualized returns in the past three years and 7.73% in the last 5 years. The SBI Magnum Gilt Fund comes under the Debt category of SBI Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in SBI Magnum Gilt Fund via lump sum is ₹5,000 and via SIP is ₹500.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹10,422Cr |
| 1Y Returns | 10.8% |
Fund Performance: The ICICI Prudential All Seasons Bond Fund has given 7.22% annualized returns in the past three years and 8.23% in the last 5 years. The ICICI Prudential All Seasons Bond Fund comes under the Debt category of ICICI Prudential Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in ICICI Prudential All Seasons Bond Fund via lump sum is ₹5,000 and via SIP is ₹100.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹12,983Cr |
| 1Y Returns | 9.5% |
Fund Performance: The ICICI Prudential Gilt Fund has given 6.94% annualized returns in the past three years and 7.94% in the last 5 years. The ICICI Prudential Gilt Fund comes under the Debt category of ICICI Prudential Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in ICICI Prudential Gilt Fund via lump sum is ₹5,000 and via SIP is ₹1,000.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹6,633Cr |
| 1Y Returns | 9.1% |
Fund Performance: The Nippon India Ultra Short Duration Fund has given 6.79% annualized returns in the past three years and 7.09% in the last 5 years. The Nippon India Ultra Short Duration Fund comes under the Debt category of Nippon India Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Nippon India Ultra Short Duration Fund via lump sum is ₹100 and via SIP is ₹100.
| Min Investment Amt | ₹100 |
|---|---|
| AUM | ₹7,256Cr |
| 1Y Returns | 7.9% |
Fund Performance: The Nippon India Corporate Bond Fund has given 6.79% annualized returns in the past three years and 7.24% in the last 5 years. The Nippon India Corporate Bond Fund comes under the Debt category of Nippon India Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Nippon India Corporate Bond Fund via lump sum is ₹1,000 and via SIP is ₹100.
| Min Investment Amt | ₹1,000 |
|---|---|
| AUM | ₹4,618Cr |
| 1Y Returns | 9.2% |
Fund Performance: The ICICI Prudential Corporate Bond Fund has given 6.68% annualized returns in the past three years and 7.24% in the last 5 years. The ICICI Prudential Corporate Bond Fund comes under the Debt category of ICICI Prudential Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in ICICI Prudential Corporate Bond Fund via lump sum is ₹100 and via SIP is ₹100.
| Min Investment Amt | ₹100 |
|---|---|
| AUM | ₹26,853Cr |
| 1Y Returns | 8.3% |
Fund Performance: The Tata Money Market Fund has given 6.66% annualized returns in the past three years and 6.2% in the last 5 years. The Tata Money Market Fund comes under the Debt category of Tata Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Tata Money Market Fund via lump sum is ₹5,000 and via SIP is ₹500.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹24,636Cr |
| 1Y Returns | 8.0% |
Fund Performance: The Aditya Birla Sun Life Floating Rate Direct Fund has given 6.65% annualized returns in the past three years and 6.68% in the last 5 years. The Aditya Birla Sun Life Floating Rate Direct Fund comes under the Debt category of Aditya Birla Sun Life Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Aditya Birla Sun Life Floating Rate Direct Fund via lump sum is ₹1,000 and via SIP is ₹1,000.
| Min Investment Amt | ₹1,000 |
|---|---|
| AUM | ₹12,681Cr |
| 1Y Returns | 8.2% |
Fund Performance: The ICICI Prudential Banking & PSU Debt Fund has given 6.58% annualized returns in the past three years and 7.12% in the last 5 years. The ICICI Prudential Banking & PSU Debt Fund comes under the Debt category of ICICI Prudential Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in ICICI Prudential Banking & PSU Debt Fund via lump sum is ₹500 and via SIP is ₹100.
| Min Investment Amt | ₹500 |
|---|---|
| AUM | ₹8,929Cr |
| 1Y Returns | 8.1% |
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