Debt Mutual Fund
What is Debt Mutual Fund ?
When we buy a house loan from bank,
Bank provides us money We need to return the money after fixed number of years Bank charges a fixed interest rate for the money that it has lent However, we also lend money to banks. In case of a fixed deposit, we lend money to the bank.
In FD’s, you would see a similar resemblance as that of a house loan:
You have lent money to the bank Banks will return the money after fixed period Bank will provide you a fixed interest after a specified period Therefore, FD is a debt instrument where you receive a periodical amount of interest for a specified period.