Fixed income fund

Fixed income funds are mutual funds where you invest in debt securities. They’re called fixed-income funds because debt securities pay fixed interest or dividend payments. In most cases, the debt securities are government or corporate bonds.

Example: Let’s say the fixed income fund is made up of corporate bonds. One of those corporate bonds costs $2,000 and has a 3% interest rate. For the length of the bond, you’ll receive 3% per year for whatever you paid for it (in this case, that’s 3% of $2,000). You’d receive $60 per year.

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