This is the third article in a series of articles on simplifying debt mutual fund investors. Read the first part “Part 1 – Debt Mutual Funds Basics“ and the second part “Part 2 – Debt Mutual Funds Basics“.
In the second part, I have explained the basics of bonds. As all debt funds hold one form or another of bonds, it is imperative to know the basics of bonds. For simplicity, I have compared the bonds with FD as many of us are well-versed in the concept of fixed deposits.
In this post, again for simplicity purposes, let us forget that we are investing in bonds. Instead, for the time being, assume that we are investing in fixed deposits. As you all may be aware that you can’t buy and sell fixed deposits from the secondary market. If you want to invest, then you have to create a new FD, if you want to get back the money at maturity, then you have to approach the bank and if you need the money in the middle, then you have to approach the bank to break the…