Best Debt Mutual Funds for Stable Returns in 2025

1. What are Debt Mutual Funds?
Debt Mutual Funds invest in fixed-income instruments such as government bonds, corporate bonds, and money-market securities to provide stable, predictable returns.

2. Are Debt Funds safer than Equity Mutual Funds?
Yes, Debt Funds are generally safer than equity funds as they focus on fixed-income assets, though they still carry some risks like credit and interest rate risk.

3. Which Debt Mutual Funds performed best in 2025?
Funds like DSP Credit Risk Fund, Aditya Birla Sun Life Medium Term Plan Fund, and Bank of India Credit Risk Fund delivered strong and consistent performance in 2025.

4. How long should one stay invested in Debt Mutual Funds?
The ideal investment horizon depends on the fund type — short-term funds suit 1–3 years, while medium-duration and credit risk funds work best for 3–5 years.

5. Can Debt Mutual Funds replace Bonds in a portfolio?
Debt Mutual Funds can complement or even replace Bonds for investors seeking liquidity, diversification, and professional management with stable returns.