Axis Corporate Bond Fund

We all have short-term goals like paying off the child's school fees or having a contingency fund or even buying a gift for your loved ones. There are a range of debt funds basis the investment horizon that you may have to achieve your short-term goals from 3 months to 3 years.

Debt Funds offer high amount of liquidity without being penalised on withdrawals. You can withdraw the required amount and continue to stay invested on the balance amount

If you stay invested in Debt Funds for more than 3 years the gains that you make will only be taxed at 20%(plus applicable surcharge and cess) (even if you are in a higher bracket). What's more! It will only be taxed on profits made over and above the inflation. For example: If you earn profits by 10% on the debt fund and inflation (measured by Cost of inflation index) increases by 7% in the same period you pay 20% (plus applicable surcharge and cess) tax only on 3% (10%-7%) which is 0.6% (20%*3%).

Investing in Debt Funds helps reduces the overall portfolio risks as they offer more stable returns. This is thus important for a well-diversified portfolio.

Debt funds have the potential to perform better than the traditional saving options. Additionally you can benefit from lower taxation if you stay invested for more than 3 years