Top 10 Debt Mutual Funds to invest in 2013

Top 10 debt Mutual Funds to invest in 2013Top 10 debt Mutual Funds to invest in 2013

Debt mutual funds are best for investors who want to get more returns than bank fixed deposits. Today we would discuss about these top debt mutual funds to invest in 2013 for short, medium and long term investment.

What are debt mutual funds?

Debt mutual funds primary invest in debt instruments like debentures, bonds, fixed income securities of corporate companies, government securities etc. These debt mutual funds are either long term debt funds or short term debt mutual funds. Currently these are one of the top performing mutual funds who look for low risk but higher returns than bank fixed deposits rates.

Why should we invest in debt mutual funds?

  • High returns compared to Bank Fixed deposits
  • Easy Liquidity
  • Good investment when interest rates are falling
  • Less risk compared to diversified mutual funds
  • Flexibility in terms of investment or withdrawal

Please read the reasons in detail here.

10 Top debt mutual funds to invest in 2013

We have analyzed 10 best debt mutual funds to invest for 2012 and below is the analysis.

Best Long term debt mutual funds:

These mutual funds invest in long-term debt instruments of corporate companies and long term government securities. Investors who are looking for stable returns above bank fixed deposits, but want to invest for medium to long term can opt for this. These debt mutual funds would be best suitable when interest rates are climbing down and who want to invest between 3 to 5 years period.

Best Long term debt mutual funds-Feb-2013

Best Short term debt mutual funds:

These mutual funds invest in short-term debt instruments of corporate companies (debt papers), short term company fixed deposits, money market instruments and short term government securities. Investors who are looking for good returns above bank fixed deposits, but want to invest for short term of 1 to 3 years can opt for this. Even these short debt mutual funds would be best suitable when interest rates are low are interest rates are falling.

Best Short term debt mutual funds-Feb-2013

Best Ultra short term debt mutual funds:

These mutual funds invest in very short-term debt instruments which mature at 90+ days. Investors, who have surplus money and looking for good returns, can invest in ultra short term. Investors looking for short term investment up to 1 year period can invest in ultra short term debt mutual funds. Even these ultra short debt mutual funds would be best suitable when interest rates are low or when interest rates are falling.

Best Ultra short term debt mutual funds-Feb-2013

Conclusion: Investment in debt mutual funds can be done for short term or long term. Investors looking for stable and higher returns compared to fixed deposits can opt for this.

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Suresh
Top 10 debt Mutual Funds to invest in 2013

8 comments

  • Dinesh Shirvaikar

    This is a continuation of the earier response which accidentally got suubmitted before completion.

    Instead a better option for you is to put the lumpsum amount in Ultra-short-term/Liquid MFs and then systematically transfer into well-performing equity funds from the same house. So you should first identify the fund/funds that u want to invest in (refer Suresh's articles for this purpose) (2-3 funds across diff. catgeories would be good) and then see the Ultra ST funds offered by their fund houses. Divide the lumpsum that you have for investing into these Ultra ST funds. Once your investment in confirmed in these funds, set up a STP (systematic transfer plan) from each of these Ultra ST fund into the respective equity fund that you have identified in the easrlier step. For e.g. if u have identified Birla SL Frontline Equity Fund & HDFC Mid-cap Opp. Fund as the equity funds for investment. Then divide your money into 2 Ultra ST funds – one offered by Birla and the other by HDFC. Once you get confirmation that ur investment in these funds is successful, set up a STP from each of these funds into the 2 equity funds u have chosen. These days Liquid as well as Ultra ST funds are giving excellent returns of 7-8% or even more in some cases, so your money continues to grow at a healthy rate as well as u achieve the objective of cost averaging in the equity fund i.e. buy across diff. time frames so that u invest when the market is at different levels thus spreading your risk.

  • Rakesh Mathur

    I am above 60 years of age. I had invested in 2005 Rs 1 lack in UTI Tax saving Dividend reinvestment MF. Now I have withdrawn the amount and switched Rs 50000 in UTI Floating rate Fund Retail Growth and this amount then through SIP of Rs 2000 per month invested for two years in UTI Opportunities Fund Retail Growth.I also invested Rs 10000 lump sum in 2005 in Fidelity Equity Fund Growth. This fund was doing good till this was taken over by L&T. 

    I want your advise on the following.

    1. Is there any better fund in L&T so that I can switch this amount. Or should I with draw this and invest in new fund.

    2. I plan to further invest in four MF's  at Rs 1000 per month for about two years. Please suggest the best funds. My aim is to maximise the investment. Keeping my age in view I should take moderate risk in few MF only.

    Regards.

    • Rakesh, I don’t think there are any good and top funds in L&T. You can re-look your existing funds and proceed accordingly. Regd further investment, based on your age, I prefer you should stay with debt mutual funds. Invest in SBI Dynamic bond fund or IDFC Bond funds. Also you should invest in bank FD (Sr. citizens saving scheme which gives highest returns)

  • Satyendra

    Hello Suresh ji

    A very good day to you Sir,

    Sir, I have 2 Lack rupees and I want to invest for long term plan on for my child security."
    I can Invest with those plan who reinvest in Equities .. Is there any suggestion on it? I want to invest one time only instead monthly or so on …

     

    Thanks in advance !!

    – Satyendra Sharma

     

     

    • Satyendra, There are several investment options if you want to invest monthly. If you want to invest a lumpsum, invest in bank FD or balanced or debt mutual funds or Post office deposit schemes only. 

    • Dinesh Shirvaikar

      Dear Satyendra,

      Investing in equity directly or indirectly in equity as a lumpsum is never a good idea. It is like putting all your eggs in one basket and hoping that the basket will never fall. Th

  • preity

    Hi Suresh ji,

    I really liked your site. The info here is very useful. I have questions regarding stocks. I purchased 20 Omaxe shares in october 2007 at Rs 210. GTL infra's 50 shares in october 2007 at 50. Both are making losses. I want to invest this money in a debt mutual fund. Kindly advise what should be my target, when & how to exit from these shares. Thanks.

    • Preity, there is no hard and fast rule. The stocks you indicated are in mid-cap/small-cap segment, hence if you are getting good returns like 100%, you can take a position and come out. Since they are high risk, I would not advice to invest for longer term. Regd your second question about debt mutual funds, you can invest in case you want returns more than bank fixed deposits. Why don’t you invest in diversified mutual funds where you get higher returns. you can invest in diverified mfs like reliance equity opps fund.

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