There should be different types of plans in the portfolio for better returns. This allows the investor to spend it according to his needs. Mutual funds are better for those who want to collect money.
Many investors do not have much variety in their portfolios. They invest in the same type of fund or scheme. But diversification is necessary for better profit. The process of diversification comes from reducing the high-risk credit risk to alleviating the loan crisis. Although there are many plans for investment, but debt mutual funds and direct bonds are more popular. In this, you get security and many other benefits with better returns. So, which is the best in both schemes, know the details.
If you do not need regular monthly income then you can invest in debt mutual fund instead of direct bond. Because by investing in bonds, you have to pay tax unnecessarily. This tax will be added to the bond interest. The bond is beneficial for them which is out of the tax slab of 5 lakhs. On the other hand, if you want to invest more money then debt mutual funds are better for you. Tax is charged when you sell your fund. If the units of the bond fund are held for more than three years, after indexation, your capital gains are taxed at 20 percent. This saves tax.
Need more investment
If you want to start investing in small investors and less money, then debt mutual fund is better for you. You will have to invest more money in direct bonds. Also, they are not available soon. Corporate bonds, especially papers rated AA and below, are difficult to assess from the perspective of risk-return. These days the government is continuously reducing the interest rate. In such a situation, investing in bonds is not a profitable deal.
Payment will have to be tracked if more bonds are held
Investors who keep various types of bonds and FDs etc. in their portfolios, they will have to constantly monitor their bank accounts. Because from time to time they have to pay for different plans. Also, when and how to get the maturity amount, as well as where to invest them, you will have to keep a full account of it. At the same time, you get the money collected in debt mutual funds. You can have it renewed if you want.
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