Investment Tips: Investing in debt funds is better than FDs, know how – why debt funds may work better for you than fds

Use indexation benefit

If you look for the long term, then the indexation benefit is more. If you invest in a debt fund in March 2020 and redeem it in March 2023, you will get three years of profit. But if you wait for a few days and redeem the investment after March 31 in the new financial year, you will get an additional benefit of one year. This is the reason why savvy investors stock up on debt funds and bonds just before the end of the financial year.

TDS is not required to be paid

There is also no TDS in debt funds. If the interest income in fixed deposit is more than Rs 40 thousand in a year, then the bank deducts 10% TDS. A taxpayer who is not liable to pay tax has to submit Form 15H or 15G to save TDS.

Income Tax Saving: If you want to save income tax, then do this work before March 31, 68000 cases are on the radar of Income Tax Department

can withdraw money easily

You can easily withdraw money from debt funds. Debt funds can be redeemed with a click of the mouse. When you apply to withdraw your investment, it gets deposited in your bank account the very next day. Fixed deposits can also be closed prematurely, but you get a lower rate of interest. Apart from this, you are also allowed partial withdrawals in debt funds.