Since investments in debt funds are eligible for indexation benefit, they turn out to be far more tax-efficient than bank and corporate fixed-deposits. Redemptions are allowed on a half-yearly basis, However, the charges are exorbitant. This fund is strictly for those willing to commit money for the entire five-year tenure, looking for superior tax-adjusted returns.
The yield on five-year government securities is currently 6.67 per cent while the same for AAA corporate bonds is 7.32 per cent, for AA+ is 7.55 per cent and for AA is 7.87 per cent.
