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A Detailed Look at Debt Mutual Funds and their Categorization

  • Writer: Rajeev Roshan R
    Rajeev Roshan R
  • Apr 11
  • 5 min read

Updated: Apr 25

Introduction Mutual fund investors often seek clarity and consistency. But with fund houses offering multiple overlapping debt schemes, confusion was common. Recognizing this, SEBI (Securities and Exchange Board of India) issued a circular on October 6, 2017, introducing a uniform classification and rationalization system for all mutual fund schemes.

This blog unpacks debt fund categorization under that framework—why it matters, what changed, and how it helps you as an investor.




What are Debt Mutual Funds

Why SEBI Standardized Debt Fund Categories

The Official SEBI Debt Fund Categories

How to Use This Classification as an Investor

The Bottom Line

SEBI’s categorization of debt mutual funds brought much-needed clarity and discipline to the mutual fund space. Investors can now compare funds confidently, knowing each category follows a standardized rulebook.

Choosing the right fund isn’t about chasing returns—it’s about matching your goals with the fund’s structure and strategy. With this framework in place, making that match has never been easier.

VR Financial Services, based in Bengaluru and founded in 2019, is a full-service financial product distribution company. We empower individuals, families, businesses, and trusts to manage their finances with clarity and confidence.

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Disclaimer

Mutual Fund investments are subject to market risks. Please read all scheme-related documents carefully before investing. The information provided herein is intended solely for educational and informational purposes and should not be construed as investment advice, a recommendation, or an offer to buy or sell any securities or financial products. Past performance is not indicative of future results. Investors are strongly advised to conduct their own due diligence and consult with certified financial advisors before making any investment decisions. Ensure your KYC compliance is completed through SEBI-registered intermediaries only. VR Financial Services does not guarantee any returns and does not offer fixed or assured return schemes—any such claims are misleading and prohibited by SEBI. All investment transactions must be carried out through official channels; do not share personal credentials or OTPs with anyone. We do not solicit funds or investment commitments through social media platforms, which are used strictly for educational outreach and investor awareness.

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