Types of Debt Mutual Funds

Debt mutual funds invest in bonds and fixed-income securities for stable, low-risk returns. Explore debt sub‑categories by duration and credit quality below.

Debt Fund Sub-categories

Index Funds

Passively tracks a bond or debt index at a low cost.

Ultra Short Duration

Lends for 3–6 months for slightly higher returns than liquid funds.

Low Duration

Invests in debt maturing in 6–12 months with low interest-rate risk.

Short Duration

Holds bonds maturing in 1–3 years, balancing yield and stability.

Banking & PSU

Lends mainly to banks, PSUs and public financial institutions.

Dynamic Bond

Actively shifts bond maturity based on the interest-rate outlook.

Corporate Bond

Invests at least 80% in the highest-rated company bonds.

Government Bond

Invests in government securities (Gilt) with minimal credit risk.

Medium Duration

Holds bonds maturing in 3–4 years for moderate returns.

Floating Rate

Invests in floating-rate bonds that benefit when interest rates rise.

Credit Risk

Invests in lower-rated bonds for higher yield with higher risk.

Medium to Long Duration

Holds bonds maturing in 4–7 years; more sensitive to rate moves.

Long Duration

Invests in long-maturity bonds (7+ years) with high rate sensitivity.

Gilt 10 year

Invests in government securities with a constant 10-year maturity.

Liquid

Parks money for up to 91 days with high safety and easy liquidity.

Overnight

Invests in 1-day securities — the safest, most liquid debt option.

Debt

General debt funds lending to governments and corporates for steady returns.

Others

Debt funds that don't fit a standard duration or credit bucket.