- Date : 09/03/2023
- Read: 2 mins
The financial year is about to end, and you must consider the indexation benefit.
The Founder of FinFIx, Prableen Bajpai, believes the fixed-income market is doing really well. She recommends that people take advantage of tax benefits and high yields of debt mutual funds. It will help maximize returns. However, Bajpai believes that every investment in debt must be planned individually, considering the time frame and goal of the investor.
Also Read: Here is how you can choose the best debt instrument
Attractive & Recommended Debt Instrument
Your goals must decide whether to move to fixed-income assets or debt. Your time horizon is also an essential factor. Debt funds generally have advantages over fixed-income products. Debt mutual funds of 1-10 years look good, considering the current yields. There is a newfound sense of return certainty. Interestingly, the financial year is about to end, and you must consider the indexation benefit. Bajpai recommends debt mutual funds for investors in higher tax slabs.
Advantages of Debt Mutual Funds
You must pay a yearly tax on accrued interest on fixed deposits. However, debt funds have lesser tax complications. Once you park the funds, you can deal with them upon maturity or withdrawal. Indexation also offers investors to protect their profits against additional taxation. Interestingly, investors invested in debt funds have exposure to equities. The present market scenario allows debt fund gains to set off against any losses from equity mutual funds or equities.
Target maturity funds are becoming popular, and their expense ratios are low. Bajpai believes more people must take advantage of debt mutual fund SIP options. To find a good fund, you must check the debt fund AUM, fund credit quality, post-expense yield, and post-tax.
Also Read: Best Indian debt mutual funds for investment.
It is wise to invest immediately as the financial year is about to end, and you can avail yourself of the indexation benefits. The debt market is doing exceptionally well and might be at its peak. We don't know whether the RBI will increase repo rates again. However, waiting for higher rates is not advised.
The Founder of FinFIx, Prableen Bajpai, believes the fixed-income market is doing really well. She recommends that people take advantage of tax benefits and high yields of debt mutual funds. It will help maximize returns. However, Bajpai believes that every investment in debt must be planned individually, considering the time frame and goal of the investor.
Also Read: Here is how you can choose the best debt instrument
Attractive & Recommended Debt Instrument
Your goals must decide whether to move to fixed-income assets or debt. Your time horizon is also an essential factor. Debt funds generally have advantages over fixed-income products. Debt mutual funds of 1-10 years look good, considering the current yields. There is a newfound sense of return certainty. Interestingly, the financial year is about to end, and you must consider the indexation benefit. Bajpai recommends debt mutual funds for investors in higher tax slabs.
Advantages of Debt Mutual Funds
You must pay a yearly tax on accrued interest on fixed deposits. However, debt funds have lesser tax complications. Once you park the funds, you can deal with them upon maturity or withdrawal. Indexation also offers investors to protect their profits against additional taxation. Interestingly, investors invested in debt funds have exposure to equities. The present market scenario allows debt fund gains to set off against any losses from equity mutual funds or equities.
Target maturity funds are becoming popular, and their expense ratios are low. Bajpai believes more people must take advantage of debt mutual fund SIP options. To find a good fund, you must check the debt fund AUM, fund credit quality, post-expense yield, and post-tax.
Also Read: Best Indian debt mutual funds for investment.
It is wise to invest immediately as the financial year is about to end, and you can avail yourself of the indexation benefits. The debt market is doing exceptionally well and might be at its peak. We don't know whether the RBI will increase repo rates again. However, waiting for higher rates is not advised.
