How to buy debt fund?

POSTED BY Mahesh Kay ON April 10, 2013 12:05 pm COMMENTS (20)

I am in process to invest into the mutual fund. I am starting with the debt fund because of the limited cash. I am not sure which fund to buy but i am aware of what theya re.

I am thinking about debt fund from SBI (dynamic fund) and maybe any other in market.

Which is better option? via fundsindia or via SBI site? also do i need demat account for buying debt fund?

 

20 replies on this article “How to buy debt fund?”

  1. Dear Rajan, just as we check the underlying portfolio of an Eq. fund, similarly check the portfolio of a debt fund. Regarding the info on maturity periods of underlying assets here, you can check the same from fund’s site.

    Thanks

    Ashal

  2. rajan.panchal24@gmail.com says:

    Ho do I check the maturity period of mutual fund. Can you please elaborate on this to understand better.

  3. rajan.panchal24@gmail.com says:

    How does maturity period matters in case of IDFC dynamic Bond and the other one ?

    1. The maturity period of a debt instrument should match the goal time frame.
      If I want money after 1 year and invest in an income fund with a maturity period of about 2-3 years or so there is an element of risk associated.

  4. Dear Mahesh, PPF for 4-6 months term?

    Am I missing something? I’m linking your needs & investment instruments.

    Thanks

    Ashal

  5. Dear Mahesh, better to stick the simple option of FDs in your bank account. As you are not sure of your time frame from 4-12 months, Opt for FD of 12-13 months duration & use the amount in between if you need so.

    Thanks

    Ashal

    1. Mahesh Kay says:

      Thanks. I have FD’s and PPF investments. I was planning for going towards the MF.

  6. Dear Mahesh, may I know your tax slab?

    Thanks

    Ashal

    1. Mahesh Kay says:

      Hi Ashal, It’s 10%.

  7. Syamantak says:

    SBI dynamic fund is good. you can consider IDFC Dynamic Bond as well

    Fundsindia gives a lot of ease in the process. if you do not bother much about the expense ration, then go with them.

    if you can take the pain to go to SBI MF local center and submit forms and docuemtns to them, I’d suggest to buy with SBI directly. In long run the difference of interest would be of considerable amount.

    No a De-Mat account is not a mandatory one. but if you already have one, use that

    1. Mahesh Kay says:

      Is there any benefit to getting it directly vs fundsindia? I mean i am not aware of some of the fees and the overall expenses that goes with direct vs fundsindia vs agent.

      1. You can go with fundsindia . It will be very convinient . Just understand that you will not be able to invest via DIRECT option with them, because they are brokers only .

    2. Syamantek,

      The average maturity period of SBI dynamic fund is about 8 yrs and
      IDFC Dynamic Bond Plan is about 2 yrs. So both should not be used for periods less than 2 yrs.

      1. Syamantak says:

        Mahesh did not put his time frame in his initial post. By the time i hit the submit button after my tea break, I could see all other details were posted. he he 🙂

        yeha both of them were for longer period than he wanted.

  8. Limited cash has nothing to do with investing in debt fund. First be clear about what goal you are investing for and the choose equity or debt fund. without knowledge of the goal, time duration of investment and your risk taking ability no one can help you

    No demat acc is need for buying any kind of MFs.

    suggest you open an account with FundsIndia.

    1. Mahesh Kay says:

      Thanks for the answer. I have short term goal so that is why deciding for the debt fund instead.

      Which site do you find good for the mutual fund suggestions? (other than debt funds)

      1. What exactly is the duration of ‘short-term is needed to decide a debt fund.

        If you want help on how to choose a equity MF using Value Research Online you can use this

        http://freefincal.wordpress.com/step-by-step-guide-to-choosing-a-mutual-fund/

        1. Mahesh Kay says:

          Thanks. I will read the book. My short term goal is like 1 year 4-6 months away. so considering that I am thinking about investment.

          1. for a goal which is 12-16 months away choose a ultra-short term fund like

            SBI Ultra Short Term Debt -Growth

            or anyone with ‘low’ risk grade from here

            http://www.valueresearchonline.com/funds/h2_typecomp.asp?type=1&objective=2

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