Definition of Debt Fund

A debt fund is a type of mutual fund wherein the invested amount is distributed across securities that are likely to yield you a fixed income.

Points to Remember:

• Debt funds offer a minimum amount of risk and a roughly fixed amount of returns.
• They are also known as fixed income fund or credit fund.

Examples:
Debt funds also include instruments such as: Gilt funds, Monthly Income Plans (MIPs), Short Term Plans (STP), Liquid Funds, Fixed Maturity Plans (FMPs) etc.