New Delhi, June 5 -- Whether you're new to investing or an experienced investor looking to diversify your portfolio, choosing the right type of securities can often be confusing due to the vast pool of options. Among the many investment options available, gilt funds stand out as a notable choice.

Here's a simple guide to understand gilt funds.

Gilt funds are debt instruments that invest in bonds and fixed-interest securities issued by state and central governments. Also known as G-secs, gilt funds have varying maturities. As these funds are invested with the government, they are believed to carry minimal risk.

When the government requires funding, it turns to the Reserve Bank of India, as the central bank serves as its banker. The RBI ...