Are debt funds always better than fixed deposits?

Debt funds are recommended for short- to medium-term allocation, often as a substitute to bank fixed deposits. For such investments, safety of capital and regular income are a greater concern than wealth creation.  A recent blog on the subject (bit.ly/2tWbxnv) questioned the effectiveness of debt funds in outperforming fixed deposits consistently. The blogger analysed annual performance of short-term and ultra short-term funds and 3-year returns for dynamic bond and credit opportunities funds against the State Bank of India’s (SBI) fixed deposit rate for similar tenures. The conclusion was that only few funds delivered better returns than fixed deposits, and that too inconsistently over a period of few years. 

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