Скачать с ютуб Overnight debt mutual funds (Hinglish) | Types of Debt Mutual Funds Part 1 в хорошем качестве

Overnight debt mutual funds (Hinglish) | Types of Debt Mutual Funds Part 1

Now that the interest rates are going up, you should consider investing in debt mutual funds. We are introducing a debt mutual fund series where we will talk about the 16 different types of debt mutual funds available in the market. In today’s video, we are talking about overnight debt mutual funds. What are Debt Mutual Funds? To understand overnight mutual funds, you need to first understand debt mutual funds. Debt mutual funds invest in short and long-term securities issued by the government, public financial institutions, or corporates like treasury bills, Government Securities, Debentures, Commercial paper, Certificates of Deposit, and others. Based on their maturity period, they are categorized into different types of debt funds. What are Overnight Debt Mutual Funds? In simple terms, overnight debt mutual funds are those debt mutual funds that have a maturity period of 1 day only. How does this work? Financial institutions like banks or NBFCs opt for overnight settlements to align their books. To do this, they borrow funds from RBI or the money market for one day, these are the instruments where overnight debt mutual funds are invested. As they have a one day maturity, they are highly liquid in nature, and you can redeem your money easily whenever you want. Who should invest in Overnight Mutual Funds? Overnight funds are ideal for those with an extremely short investment horizon. These mutual funds are safe as they are not exposed to high-risk assets and securities. Therefore, risk-averse investors may consider investing in these funds. Benefits of Overnight Mutual Funds The following are the benefits of investing in overnight mutual funds: i) Low risk – Due to their short investment horizon, they are low risk investment options. They don't have default risk or interest risk. ii) Easy liquidity – Again, due to the tier's short maturity period, they are highly liquid. Any surplus funds that you have in your savings account can also be safely transferred to overnight debt mutual funds. iii) Easy withdrawals – Unlike other short-term investment options such as fixed deposits, overnight debt mutual funds allow an easy exit option without paying any hefty penalty. Taxation in Overnight Debt Mutual Funds Overnight debt mutual funds are tax efficient. Short-term profits if you sell your investment before three years will be taxed as per your income tax slab rate and long-term gains if you sell your investment after three years will be taxed at 20 percent with indexation. If you haven’t already, start your investing journey on Kuvera - your safe space to invest. Click on the link below to get started. https://bit.ly/3JTbcJq