Short Duration Debt Fund

These funds are structured to benefit from accrual income (interest earned on bonds) while maintaining some scope for capital gains in a falling interest rate environment. The shorter maturity of their portfolio reduces exposure to sharp rate fluctuations, resulting in more predictable performance over the investment period.

As these funds invest in high-credit-quality instruments, they typically offer lower credit risk, and their shorter duration helps minimize interest rate volatility. This combination makes them more stable than medium- or long-duration debt funds, while still offering a return profile that often exceeds that of a traditional fixed deposit.

Short Duration Debt Funds are ideal for:

• Investors with a 3- to 4-year investment horizon
• Individuals planning for medium-term financial goals like a car purchase, home down payment, child's education, or vacation
• Those looking to earn better returns than FDs or savings accounts
• Investors seeking tax-efficient returns over the long term (held > 3 years)

• Moderate Returns: Typically in the range of 5.5% to 7.5% annually
• Lower Risk: Less sensitive to interest rate changes than long-duration funds
• High Liquidity: Easy to redeem with quick turnaround (usually T+1 or T+2)
• No Lock-in Period: Flexibility to withdraw anytime
• Better Than FDs: Higher return potential with similar safety for high-credit-quality portfolios
• Tax Efficient (Long-Term): If held for more than 3 years, qualify for LTCG with indexation
• Diversified Portfolio: Investments spread across government and top-rated corporate debt