Are Debt Funds the Better Alternative to Fixed Deposits?

Debt Funds represent a type of Mutual Funds that aim to deliver returns by investing your capital in loans to governments and corporations. Suitable for investment timelines of 1 day to 3 years, these funds can offer more favorable post-tax returns than Fixed Deposits (FDs), especially if held for at least 3 years. Liquid Debt Funds are particularly effective for emergency fund management because they generally provide higher returns than a typical savings account, while maintaining relatively low risk.

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