There are various types of mutual fund schemes available in the market: On the basis of the asset class: Debt fund: These funds invest in fixed income instruments such as bonds, security and treasury bills such as fixed maturity plans, liquid funds, gilt funds, short term plans, long term bonds, etc. They have a fixed maturity date and a fixed rate of interest. They are the best investment options for investors who get income on a regular basis. Hybrid or Balanced Funds: They are a combination of bonds and stocks. They can either have a fixed or variable ratio. These funds invest some amount of money in equity funds and some in the debt funds. The investment in hybrid or balanced fund is a bit risky but the returns are quite good. Equity Funds: They are the most common types of mutual funds. The investments in equity funds are made in stocks. The gains or losses of these types of funds are dependent on the shares in which they are invested. A lot of investors prefer e...