New Delhi, June 2 -- SBI Mutual Fund, India's largest mutual fund house, recently launched two funds: SBI CRISIL‑IBX 10:90 Gilt + SDL Index - Dec 2029 Fund and SBI Nifty G‑Sec Jul 2031 Index Fund. These are both target maturity funds that come with a fixed maturity date.

But how do target maturity funds work, and are they right for you? Let's find out.

Target maturity funds are passive debt index funds-or exchange-traded funds (ETFs)-that hold a defined basket of bonds until every security in the portfolio matures. The fund name carries the maturity date. For example, the SBI CRISIL-IBX 10:90 Gilt + SDL - Dec 2029 Fund matures in December 2029, while the SBI Nifty G‑Sec Jul 2031 runs until July 2031. When the final sec...