Investment
Short-term Debt Funds
Also known as: Short Duration Funds, 1-3 Year Debt Funds
Debt mutual funds investing in securities with 1-3 year maturity to minimize interest rate risk.
Detailed Explanation
Short-term Debt Funds invest in debt securities with shorter maturities (1-3 years) to reduce sensitivity to interest rate changes. They offer better returns than liquid funds while maintaining relatively low volatility. These funds are suitable for 1-3 year investment horizons where capital preservation is important but some yield enhancement is desired over savings accounts.