Best Groww Debt Mutual Funds - 2025 Guide
In case you are seeking secure investment opportunities with predictable returns, Groww debt mutual funds in India are the 2025 mutual funds of choice to most investors. The funds are favored due to the fact that they will preserve the capital and offer superior returns compared to traditional fixed deposits. This in-depth guide will cover the most recommended Groww debt mutual funds, their major characteristics, the most significant advantages, possible limitations, and the opinions of experts to invest in Groww funds and invest in the best way possible.
What, then, Are Debt Mutual Funds and How Do They Work?
Debt mutual funds are investment plans that mainly invest in fixed income securities which include government securities, corporate bonds, treasury bills, as well as money market securities. Debt funds also seek to provide a stable and regular stream of income unlike the equity funds, thus they are not volatile and only suitable to the conservative investor.
Key Features
- Invest in a combination of short, medium, and long run fixed income securities.
- Strive to achieve capital preservation and average returns.
- Less risk than equity mutual funds.
Did You Know?
Mutual funds on debt have the ability to deliver gains that beat the index with risk that has been controlled by expert fund managers, particularly when interest rates fluctuate.
What Kind of Debt Mutual Funds Are Listed on Groww
In Groww, investors have an opportunity to learn about a range of debt mutual fund types, and each of them has its purpose of investment. Knowledge of such categories will help in alignment of your goals.
Types of Popular Debt Funds on Groww
- Liquid Funds - Best when it comes to storing excess cash over a few days or months.
- Short Duration Funds - Investing in short term 1-3 years; balance investment and risk.
- Ultra Short Duration Funds - Good in the 3-6 months parking with mildly better returns compared to liquid funds.
- Corporate Bond Funds - Invest in high-rated corporate bonds primarily.
- Gilt Funds - Securities in the government; no credit risk.
- Banking and PSU Funds - Significant investment in the debt instruments of the banks and the public sector undertakings.
What Are the Criteria to Choose Best Debt Mutual Fund on Groww
These are major factors to be looked at before investing in a debt mutual fund on Groww with the aim of making a wise decision.
Selection Criteria
- Consistency of past returns
- Underlying security credit quality
- Duration, maturity profile
- Expense ratio and exit load
- Experience and track record of fund manager
- Corresponds to your time horizon and riskiness
People Also Ask
How to find out what is the best debt mutual fund on Groww?
Select funds according to past performance, cost, credit rating and suitability to investment needs. Groww has detailed information on comparison functionality.
What Are the Best Groww Debt Mutual Funds in 2025
To summarize, today, based on the recommendations of experts and the latest performance figures, it is possible to review the most successful and the most rated debt mutual funds that can be invested in on Groww this year.
Axis Short Term Fund
- Industry - Short-Term Investment
- 2024 Return - 7.8 percent (3-Year CAGR: 7.3 percent)
- Expense Ratio - 0.43 percent (Direct Plan)
- Credit Quality - AAA dominated
- Minimum SIP - ₹500
Highlights
- Sustained performance over-average in previous 3 years.
- Perfect fit of 1-3 years investment horizon.
Pros
- Medium Duration Stable returns.
- Low credit risk.
Cons
- Moderate risk in volatile cycles on interest rates.
HDFC Corporate Bond Fund
- Set of Rules - Corporate Bond Fund
- 2024 Return - 8.2 percent (3-Year CAGR: 7.7 percent)
- Expense Ratio - 0.38 percent (Direct Plan)
- Large portion to high rated corporate bonds.
Highlights
- Good quality credit portfolio.
- Suitable for 2-4 years.
Pros
- Outperformance in corporate debt space.
- Minimal credit default risk.
Cons
- A little bit influenced by changes in interest rate.
SBI Magnum Gilt Fund
- Category - Gilt Fund
- 2024 Return - 7.6 percent (3-Year CAGR: 7.1 percent)
- Expense Ratio - 0.40 percent (Direct Plan)
- Devotes all resources to central/state government securities.
Highlights
- No credit risk; appropriate to risk-averse investors.
- More tax efficient than long duration FDs.
Pros
- Exposure to pure government security.
- Foreseeable returns in a declining interest rate.
Cons
- Sensitive to changes in interest rates.
Did You Know?
Gilt funds can make higher profits upon the reduction in rates by RBI whereas corporate bond funds can gain stability in the credit market.
Comparison Table of the Best Groww Debt Mutual Funds 2025
| Fund Name | Category | 3-Year CAGR | Expense Ratio | Risk Level | Minimum SIP | AUM (₹ Cr) |
|---|---|---|---|---|---|---|
| Axis Short Term Fund | Short Term | 7.3% | 0.43% | Low-Medium | ₹500 | 18,400 |
| HDFC Corporate Bond Fund | Corporate Bond | 7.7% | 0.38% | Low | ₹500 | 33,200 |
| SBI Magnum Gilt Fund | Gilt | 7.1% | 0.40% | Low | ₹500 | 8,900 |
Data as of March 2025
People Also Ask
What is the best short-term debt mutual fund to invest on Groww?
It is better to invest in liquid and ultra-short duration funds since the risk of interest rate is low and the liquidity is easily obtained, with a period not longer than a few days to a year.
Taxation of Debt Mutual Fund in India 2025
Since 2023, debt mutual funds are taxed on the slab rate of income of the investors irrespective of the holding period compared to the previous advantage of long-term capital gains (LTCG) indexation.
Key Tax Points
- Its gains are taken as an addition to income and taxed in accordance with your own tax slab.
- No longer differential in cases where the holding period is less than or greater than 36 months.
- Nonetheless, there is a possibility of having higher after-tax returns than FDs in some slabs.
Advantages and Disadvantages of Taxation in a Debt Fund
Pros
- Additional candor and equality to conventional alternatives.
Cons
- Increased tax on those in 20 percent or 30 percent bracket, decreasing their advantage of returns over the FDs.
Did You Know?
Debt fund investments are subject to SIP taxation, and hence, upon redemption, the oldest units are assumed to have been sold out first.
Investment in Debt Funds with Groww
Investment by means of the Groww app or site in any type of debt mutual fund is a highly straightforward process, which can be made by both a beginner and an experienced investor.
Quick Investment Steps
- Register in Groww app or on the web platform.
- Search desirable debt fund by category or name.
- Fund check details, returns and expense ratio.
- Select investment mode - lump sum or SIP.
- Enter deposit and send upon completion of KYC.
Key Benefits
- Direct plan zero commission.
- Portfolio management and easy tracking.
- Periodic performance and growth reports.
People Also Ask
Should one invest in debt mutual funds on Groww?
Yes, the Groww platform does not show funds that are not registered by SEBI and does not conceal information to assist you in making wise choices.
What Is the Advantage and Disadvantage of Debt Mutual Funds on Groww
Risk-reward profile is also an important aspect that every investor must understand before committing to the investment of debt funds.
Pros of Debt Funds
- Less volatility than equities.
- Relatively high potential of returns as compared to fixed deposits.
- Liquidity is high to take out the funds immediately.
- Strong selection of funds of every risk profile.
Cons of Debt Funds
- The returns are subject to changes in the interest rates and the market conditions.
- Not 100 percent risk-free; there are certain categories that are at risk of credit or default.
- High-income investors are now less likely to be taxed.
Did You Know?
Gilt funds (funds devoted to government securities) are the most suitable funds to the ultra-cautious investors because they have zero credit default risk.
What Type of Debt Mutual Fund Is the Best One
The kind of debt mutual fund to select is heavily dependent on your investment time, risk tolerance, and the need of cash flow.
If your goals are:
| Goal | Recommended Fund Type |
|---|---|
| Immediate (Few days to 1 month) | Liquid Funds |
| Moderate term (6-12 months) | Ultra Short or Money Market Funds |
| Medium term (1-3 years) | Banking PSU Funds, Short Duration |
| Minimum risk, long-term | Gilt or Corporate Bond Funds |
People Also Ask
Am I going to lose money in debt mutual funds?
The risk is not very high, and the returns may fall in case interest rates increase rapidly or there is a credit event. This risk can however be minimized by adhering to high quality funds.
The Outlook of Experts to Invest in Debt Funds in 2025
These tips will help a customer to maximize the benefits of debt mutual funds on a platform such as Groww in the present environment, professional advisers and fund managers suggest.
Expert Tips
- Do not go in pursuit of the best possible return; stick to reliability and quality of credit.
- Disciplined investing and rupee cost averaging - use SIPs.
- Choose two or three categories according to your selection.
- Review your portfolio annually so that it aligns with the evolving market conditions and your individual financial objectives.
TLDR or Quick Recap
- Groww has a broad range of debt mutual funds that can be used by various investors in 2025.
- The best funds are the Axis Short Term, HDFC Corporate Bond, and SBI Magnum Gilt that offer security, liquidity and consistent returns.
- Find a fund that fits your time horizon, risk level and new tax regulations.
- Always consider the most important features, advantages and disadvantages, and history to be able to choose well.
People Also Ask
Q: What is better FD or debt mutual funds in 2025?
A: Debt funds may be superior in providing post tax returns and liquidity than FDs particularly those in lower tax brackets but are subject to risk of the market.
Q: Debt mutual funds good monthly income?
A: Yes, investors are given the option to choose monthly income plans (MIP) or systematic withdrawal plans (SWP) of debt funds to pay out periodically.
Q: What is the appropriate duration in a debt mutual fund?
A: The optimal time is based on the type of fund - liquid funds can be used in short term, whilst short duration, and corporate bond funds are appropriate in 1-3 years.
Q: Does Groww have SIP in debt funds?
A: Yes, Groww has SIP in all its major debt funds to invest in regularly and disciplinely.
Q: Is there NRIs investment in debt mutual funds by Groww?
A: Now Groww facilitates NRI investment in some funds championing mutual funds in full compliance of KYC and FATCA rules.
Sources
- Groww Official Mutual Funds
- Value Research
- AMFI India
- SEBI Regulations on Debt Mutual Fund
