Purpose of Banking and PSU Funds
1. To Minimize Risk Factors: Banking and PSU Funds are seen by those investors who look for lower risk in investment schemes. The majority of investment is done in high-rated debt securities, which provide lower risk and also they are backed by the government.
2. To Maintain Regular Income: Banking and PSU funds deliver constant and regular return flow to the investors, sometimes banking and PSU funds may deliver returns higher than inflation, and even deliver better returns than a fixed deposit.
3. To Achieve Short-Term Objectives: Banking and PSU funds are excellent choices to achieve short-term objectives, people with an investment horizon of one to three years can invest in banking and PSU funds along with the lowest risk degree.
4. To Diversify the Portfolio: Banking and PSU funds are good investment options in case an investor wants to diversify their portfolio and experience the features and benefits of debt-based securities. A small investment in equity along with banking and PSU funds might help your portfolio grow with pace.