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A debt fund is a type of mutual fund that invests in capital-appreciating fixed-income assets such as corporate and government bonds, corporate debt securities, money market instruments, etc. Bond funds and income funds are other names for debt funds.
Debt funds are among the least unsafe investment options, but investors must remember that they are market-linked products, just like any mutual funds.
Returns are not assured, and interest rates and credit risk exist even for the best-performing debt funds.
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