Top Debt Mutual Funds to invest in 2016 in India
We have seen that RBI continues to cut rates and banks would continue to reduce FD interest rates. If you are planning to invest in fixed income schemes, but want to get higher returns than bank FD’s, best way is to invest in top debt mutual funds. I have analyzed best debt funds to invest in, which have been giving good returns in last 5 years. Which are the top debt mutual funds to invest in 2016 in India? Which are the best debt funds to invest in, which are good for short term and long term?
Also Read: Best Sector Mutual Funds to invest in 2016
Parameters on how picked up Top Debt Mutual Funds to invest
These debt mutual fund schemes have been analyzed and shortlisted based on some of the important parameters.
- These are picked based on highest returns received in the last 5 years.
- These debt mutual fund schemes which are rated as 5-Star (5/5), 4-Star (4/5) and 3-Star (3/5) by value research online.
- Funds, which are rated by Crisil as Rank-1, Rank-2, Rank-3 and Rank-4 which indicates top performance across various market cycles. Two funds have not been rated by Crisil, however, I have picked the same based on other parameters.
- AUM (Assets under management) > Rs 100 Crores. This proves investor confidence among these top 10 mutual funds. As an exception, I have considered one good fund, which has an AUM of Rs 97 Crores.
- Some of the funds might be a repetition from my earlier recommendation.
Top Debt Mutual Funds to invest in 2016 in India
I have segregated them in under various heads like the ultra short term, income funds and gilt mutual funds.
1) Ultra Short Term Debt funds
Ultra short-term funds invest in fixed-income instruments which are generally liquid and have short term maturities within 90 days. These short term funds offer investors good protection against interest rate risk compared to other funds. An investor who is willing to invest for 3-9 months can invest in these ultra short term mutual funds. I advise you to invest in these debt mutual fund schemes for at least for 3-9 months to get good returns.
2) Debt – Income funds
Debt income funds invest in various fixed income options, maturing between medium term to long term. If you are willing to park your money for medium term to long term of 1 to 5 years, you can invest in these income funds. Note that these funds does not limit to investing in Govt bonds, but invests in corporate bonds too.
3) Gilt-Medium/Long Term
Gilt Funds are those funds that invest only in government securities. They debt mutual fund schemes are preferred to conservative investors who wish to invest in indirectly in government bonds. Since gilt funds invest only in government bonds, investors are protected from credit risk.
Also Read: Top Mid-cap Mutual Funds to invest in India
Conclusion: I believe in investing in these debt mutual funds which gives higher returns compared to bank FD interest rates. If you can invest for at least 36 months in income/gilt mutual funds, you can get indexation benefit and tax on such debt funds would be very low.
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Suresh
Top Debt Mutual Funds to invest in 2016 in India
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Dear Suresh ,please do suggest the following
1) Suggest me the TWO BEST HIGH YEILDING DEBT FUNDS for SWP as direct model for a 10 to 15 years investment for regular income for myself and my wife
2) How much i need to invest apxt for SWP of Rs 35000 Per Month , for the next 10 -15 years or so ,or what % of the invested money can be as SWP for say next 10 to 15 years
3) Retired no debts Goal: Daughter Marriage/Higher studies time frame 5 yrs, 2022/23 ROI 13-20% YOY suggest top 3 Growth based direct mutual funds scheme names, for 1 Crore LUMP SUM investment
I am retired age 55 and has own house and only one daughter doing her final year UG at USA
Suresh, Can you please suggest me best 2 debt funds for investing 5 lakhs for 3 years. Thanks
AP Singh, You can invest in any of the funds indicated in this article
Dear Sureh, please give your views on these three debt funds:
1. ICICI pru flexible income plan (Ultra short term debt fund)
2. HDFC short term opportunities (Short term debt fund)
3. Birla sun life Dynamic bond (Dynamic bond)
Thanks & Regards
Jayant Ganguly
Please advise 5 or 6 best debt funds to invest about 10 lakhs.
Hi Ravi, You can invest in the funds indicated in this article
Dear Suresh,I am a regular reader of your blog.Your articles are very informative. Kindly analyse Birla Dynamic Bond fund for me.Thanking you.
Hello Dr. Jawahar, Birla SL Dynamic Bond is 4 Star rated by value research online. It gave 15% returns in last 1 year and 11% annaulised returns in last 5 years. You can invest
Hi sir please tell me I want t invest 15 l in lumsum in my , I need after 3yrs, suggest me some best mf to consider for investment..
Hi sir,
I have 130000 rupees and want to invest it in UTI-advantage monthly income plan. My motive behind this is generating a second source of income. I plan to make more such investments in future to achieve financial independence. Is it the right approach. My monthly salary is 25000 rs.
sir, i recently retired from job and i want to invest approximately 5 Lakhs in mutual fund with SWP option. please advised me in which fund i can invest with good returns
Hi Rakesh, , You can invest in monthly income plan mutual funds. Pls see my article on Monday more about the features of MIP Plans,
Is it good time to come out of hdfc top 200, idfc premier equity regular fund(G), dsp BR top 100?
All are laggards for quite some time now…
100% agree with you. You can investt in better funds.
Dear sir,
I want to invest Rs. 200000 in first week of October as my FD is getting mature in some Debt fund for 1 year.
Can you please suggest which Debt Category should I opt ? Will it be safer than FD as per current market scenario? I want to devide the amount in 4-5 parts.
Also, suggest some good funds in the suggested category?
Thankyou
You can invest in 3-4 debt mutual funds like ICICI Pru income opps fund, HDFC Midterm opps fund and L&T Gilt fund
Hi Suresh, I have received some money from p. F. For last job. Could you suggest me the best mutual fund for investment and also I will plan to start 5—10 thousand for SIP, can you suggest the fund name. I m 36 years old one,, 13 years daughter. Regards
Hi Mukesh, You can invest your lumpsum in debt funds and then STP (monthly transfer the amount) through SIP to equity funds. You can invest in Large cap funds to start with like Birla SL Frontline equity fund, ICICI Focussed blue chip fund, ICICI Pru Top 100 equity fund etc.,
Thanks Suresh for response could you share me the good portfolio ratio for equity, debt, gold fund accord to my age 37, 13 year daughter.
Regards
Respected sir, i m 38 yr old, totally unknown about term plans, should i go through LIC (big amt of premuum) or private insurance companies (affordable premium) ? Is pvt co are making loss ? Is it safer than LIC ? what should i do ? Kindly suggest please..
You can consider private insurance companies which has high claim settlement ratios like ICICI Pru life and HDFC Pru life
Thank u very much sir
Hi Suresh
I want to invest Rs. 60000 in first week of September as my FD is getting mature in some Debt fund for 1 year.
Can you please suggest which Debt Category should I opt ? Will it be safer than FD as per current market scenario?
Also, suggest some good funds in the suggested category?
Hi Mohit, For 1 year, go for short term debt funds
Hi Suresh.
I was thinking to divide 50-50% in any two of the below 3.
1) Birla Sun Life Short Term Opportunities Fund – Retail Plan (G) – (Credit Opp fund)
2) Birla Sun Life Short Term Fund – Direct Plan (G) (Debt Short Term Fund)
3) Birla Sun Life Treasury Optimizer Fund
Can you please suggest if selection is fine or a chnage is required?
Hi Suresh –
I have been investing in equity mutual funds (7k/m), ELSS (8k/m), RD(3k/m).
Now my RD is nearing maturity and I am looking for an investment tool that gives me flexibilty of having emergency cash when I need them.
Would you advise me to go for another RD or Debt fund or any other instrument? Please advise.
Thank,
Mukesh
HOW SAFE ARE GILT FUNDS. WHETHER RETURNS ARE GUARANTED LIKE BANK DEPOSITS
Hi Suresh,
How are capital protection funds and how are they different from debt funds. I would like to invest lumpsum in safe instruments as my portfolio already is completely equity oriented. How do i diversify ? Have been advised to look at Reliance Dual Advantage Fixed Tenure Fund IX – Plan D by my banker.
I was under the assumption that debt funds have little to no charges. Although it’s true, while we invest through brokers like icicidirect, they charge a one-time service fee of Rs.100/-. The investment in these funds seems beneficial only if invest big amounts.
This my experience with icicidirect in buying MF “FRANKLIN INDIA ULTRA SHORT BOND FUND – SUPER INSTITUTIONAL PLAN GROWTH”.
Are these charges common with all the brokers? Pls. clarify.
Satish, It is common, however some brokers like fundsindia or fundsupermartย would not charge any transaction charges.
Sir,
Thanks for the wonderful article, could you please provide more clarity on options between Dividend pay out, growth and dividend re-invest option in Debt mutual funds from the taxation perspective.
Regards
Kumar
What are Debt Dynamic funds?
Hello Suresh Ji,
Thanks for your nice articles.
Should I invest in debt MF also through SIP or lumsum?
What is good optimum amount per month for SIP ?
best regards,
ashutosh
There is no harm in investing in lumpsum in these debt funds. SIP is generally done for equity funds to see that averaging is done
Hi Suresh,
I am big fan of you. I will visit atleast once in every week. Can you please let me know if this can be changed in future. Also can you please clarify if Debt will affect if Reserve bank cut the rates in future.
Its not fixed return correct. What is the risk level.
Regards,
Venkatesh G
Some of the funds like arbitrage funds returns would have impact on RBI repo rate cuts. Its not fixed return, but you would get atleast 8% to 10% depending on the funds chosen by you.
Thank u so much Mr Suresh
Always enjoy reading your articles and tips. Value your suggestions always.
Hi Suresh,
Your opinion on Debt Liquid funds?
You can refer this link Hussain for top liquid funds to invest for 2016.ย https://myinvestmentideas.com/2013/01/top-5-liquid-mutual-funds-for-short-term-investment/