As mentioned earlier investment tenure influences your risk capacity. You should try to match the duration profile of debt funds with your investment tenure. For very short investment tenures (few days / weeks / months), you should invest in overnight funds, liquid funds or ultra-short duration funds. For 1 – 3 year investment tenures, you can invest in short duration funds or funds whose duration profile is less than 3 years. If investment tenure is above 3 years, you can invest in dynamic bond funds, banking & PSU debt funds and Gilt funds.