Debt Mutual Funds mainly invest in a mix of debt or fixed income securities such as Treasury Bills, Government Securities, Corporate Bonds, Money Market instruments and other debt securities of different time horizons. Currently a 3+ year of investment into any debt mutual fund helps one to reduce their capital gains tax using Indexation benefit.
The deposit placed by investors with corporate companies for a fixed term carrying a prescribed rate of interest is called a corporate fixed deposit. These deposits generally yield a higher rate of interest than that of a Bank fixed deposits.
Bonds that are issued mostly by government enterprises whose returns are tax free.
Bonds issued by corporate organizations for fund raising at a pre-fixed rate of interest. The majority of these bonds are tradable and thus they provide capital appreciation as well.