Anyone with any experience in investing in debt funds? I keep reading that they are a good option to FDs especially if you are in the 30% tax range. I generally invest in one year maturity FDs which typically have the highest interest rate at any point of time which I then renew every year. However if there is a two year FD at a higher rate then I will pick that for sure. Now the more I read the more I get to know that debt funds are a better option and almost as liquid, with a slight risk. But there are so many options : Ultra Short Term, Liquid, Short Term, Long Term and Gilt. Plus multiply that by the plethora of Fund Houses which run these. Also I assume growth options are a better bet due to indexation on Taxation as opposed to dividend which get taxed at 27.5%. Currently one of the FDs has matured and I am sitting on that, waiting to decide. Would also like to know if I pick a debt fund should I invest the full amount in lumpsum or should I break it into SIPs.