Go with accrual funds as govt bond market is expected to remain volatile

Fixed deposit investors should go for short-term plans now, and be nimble enough to shift when rates go up further

The 10-year government bond yield has been very volatile in the past couple of months. From a low of 6.41 per cent on July 24, 2017, the benchmark yield rose all the way up to 7.78 per cent on March 6, 2018, before declining to 7.18 per cent on April 6. Since then it has risen once again to around 7.47 per cent. Investors need to pursue a carefully calibrated strategy for their fixed-income investments in a year when bond yields are expected to be volatile.  

What’s going on? Between July last year and early March this year, bond yields