INCOME TAX22 Sept 2026
Long-duration debt funds offer 7.8% yields, but further rate hikes could hurt returns. What should investors do? | Mint
Long-duration debt funds are now offering yields of about 7.50% to 7.80%. But bond yields have been rising, with the 10-year government bond yield touching roughly 7.07% on 21 September, its fifth straight weekly gain. If yields keep climbing, bond prices fall and your fund's net asset value can drop. Experts suggest shorter-duration or target-maturity options for a three-to-five-year horizon.
Key Statutory Highlights
- Long-duration debt funds currently offer running yields of around 7.50-7.80%, while the benchmark 10-year government security yield is around 7.05-7.20%.
- When bond yields rise, long-duration bond prices fall and mark-to-market losses can erase short-term accrual income.
- Short-duration debt funds offer running yields of around 7-7.50%, and three- to five-year target-maturity funds offer around 6.75-7.10%.
Actionable Advice for Taxpayers / Founders:Before investing, match the fund's duration to your own three-to-five-year horizon and check whether a shorter-duration or target-maturity fund suits you better than chasing the highest yield. A registered investment adviser can help you decide.
Statutory Disclaimer: TaxQue Shorts are AI-assisted editorial briefs for compliance awareness. This brief has not passed every source check; confirm the original notification before acting. This does not constitute formal legal or CA counsel.
TaxQue News Desk
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