What are Fixed Income Schemes?
Fixed Income Schemes invest in securities such as bonds, debentures, government securities, Money Market Instruments and other similar instruments. The main purpose of such schemes is to invest is to generate a steady income against a balanced investment risk.
Fixed Income securities carry minimum investment risk as the main motive is to offer the promised returns to the investors. On the other hand equity securities have no such obligation to pay back the investors. Though the promised return is comparatively higher, equity funds have high risk of investment loss. So, conservative investors prefer going with fixed income schemes.
Following are a few schemes that offer investment benefits to investors:
More tax efficient
Better returns
The longer the period of investment, higher are the returns. Funds that invest in long term bonds are not applicable to changes in rate which occur in short-term debt funds’ investments. For instance, DSPBR Government Securities Fund has a longer lock-in period and directly invests in GOI bonds. As lock-in period is longer, it offers better returns as compared to other short term funds.
More flexible
Fixed Income Schemes are more flexible than others and a person can invest small amounts in them every month. Certain schemes primarily invest in Money Market instruments that offer combined benefit of liquidity and growth. For instance, DSPBR Money Manager Fund has a portfolio of money market instruments that offer better gains than regular debt instruments.This post first appeared on Loans And Finance Providers In India, please read the originial post: here
