BloombergQuint's Big Decisions podcast gets you the insights you need to make big money decisions with confidence.
With interest rates at historic lows, market participants must adjust their investment strategies to account for the possibility of a change in the interest rate cycle.
At this stage, investing in long-term debt instruments—both fixed deposits and debt mutual fund schemes—may not be the best idea. Locking funds away in long-term fixed deposits would mean that once interest rates rise, an investor would lose out on the opportunity of higher returns. Bonds see capital erosion in a rising interest rate scenario.
A good option to consider is a floater fund that invests in debt securities that have interest rates that adjust to the rates prevailing in the market, said Rushabh Desai, an AMFI-registered mutual fund distributor.
On this BQ Big Decisions podcast, BloombergQuint speaks to Desai about this category of mutual fund schemes, their features and the best options to consider.
Listen to the full conversation here:
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