SEBI has classified gilt funds as mutual fund schemes that invest a minimum of 80% of their total assets in Government Securities (G-Secs).
Since these funds primarily invest in government-backed securities, they are generally considered relatively safer in terms of credit risk.
Gilt funds are generally open-ended schemes, which means investors can invest through SIPs (Systematic Investment Plans) or lump sum investments, subject to the rules of the scheme.
Along with offering relatively higher safety, gilt funds may also provide better return potential compared to traditional savings accounts over the long term, although returns are not guaranteed.
These funds may be suitable for investors seeking relatively safer investment options along with moderate capital appreciation potential.
You can learn more about mutual funds, SIPs, investing concepts, and portfolio-building strategies through the Mutual Fund Learning Centre
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