Returns on Target Maturity Funds

Is it a good idea for a senior citizen to invest in HDFC MF’s TMF NFO based on the Nifty SDL Oct 2026 Index? Or should he stick to Senior Citizens Saving scheme where the RoI is 8% (~6.4% after tax @ 20%)?

Also, what about non-senior ciitzens where FDs have a RoI of ~7%?

Email from hdfc mf (they have not mentioned expected returns):

HDFC MF is launching its first SDL Target Maturity Fund – the HDFC Nifty SDL Oct 2026 Index Fund (~3.6 years maturity). The fund seeks to invest in State Development Loans (SDLs), which are bonds issued by state governments.

Yes, they cannot mention the expected return as returns are not guaranteed.
Currently index yield is 7.6%. If you hold till maturity, chances are you will earn a return very close to this (minus the expenses).
There is also reinvestment risk involved, wherein fund may not be able to invest the coupon they earn at same yield.

With all this uncertainties, I would not suggest it for Senior citizens. For others in highest tax bracket can consider it as replacement for FD.


Where to get Info on Index yields of TMF?

You will have to lookup on index provider’s website. In this case it is a Nifty index, so NSE indices and then index statistics.

Also note that this yield will keep on changing daily.