New Delhi, Aug. 20 -- Investors often face a common dilemma: should they invest in short-term bonds or long-term bonds? The answer isn't always straightforward. Choosing the right type of bond depends on various factors-ranging from financial goals, risk tolerance, current financial position, to interest rate trends and market volatility.

In the current environment, where bond yields are fluctuating and the Reserve Bank of India (RBI) maintains a cautious policy stance, making an informed choice has become even more critical.

Short-term bonds generally mature in 1-3 years. Sometimes they also take up to 5 years. These bonds are less sensitive to interest rate changes. They provide investors with steady returns and seamless liquidity. Cu...