Difference between debt and equity funds Rupak, 24 May 2013

I wnt to know in simple terms the difference between debt and equity funds? how do i know what is best for me?

Fintotal Answer

Debt Funds are those which invest your money in different types of debt securities- bank fixed deposits, company deposits, etc. Its returns are similar to the returns of the fixed deposits. But unlike these deposits the debt fund does not guarantee the returns. Equity Funds invest their money in the equity shares of various companies listed on the stock exchange. Equity funds are of various types such as index funds, sector funds and diversified funds. Reading the above explanation it will be now easy for you to identify a debt and an equity fund. For suitability, remember that the investment for long term(needs occurring after 5 years) should always be in equity diversified mutual funds and the investment for short term(needs occurring between 1 month to 2 years) should be in debt funds. Check mutualfunds.fintotal.com for unbiased reviews and recommendations.

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