New Delhi, Oct. 5 -- For investment in debt instruments, you can purchase them directly, or you can invest in debt funds. The relevant parameter is yield-to-maturity or YTM. This is the annualized return you will earn, provided you hold the bond till maturity. The higher the YTM at the entry level, the better for you.

In the current context, the Reserve Bank of India (RBI) has cut the signal repo rate by one percentage point, from 6.5% to 5.5%, from February to June 2025. Consequently, yields decreased, which benefited existing bondholders as prices rose. However, YTM levels came down, as yield and price move inversely. In recent years, yield levels have increased again, providing a relatively better entry point. Let us look at some data...