Fixed deposit still provide a better rate of interest? Or there are other investment options like Mutual Funds that offer better investment returns in a better way?
When it comes to saving an amount, FD is a very safe option for all investors. The major reason is, that it is one of the oldest and safe saving investment options in the market who provides a fixed rate of interest.
But is still fixed deposit the appropriate investment option in the market? Does a Fixed deposit still provide a better rate of interest? Or there are other investment options like Mutual Funds that offer better investment returns in a better way?
On the other hand, Mutual Funds are based on market investment with no fixed return. However, during the long run, they have been observed to give a 10-15% rate of return, which is pretty higher than fixed deposits. There are three types of Mutual Funds – Hybrid, Equity, and Debt.
In Debt Mutual Fund, most of the amount will invest in government bonds, corporate bonds, and securities and the rest of the amount is in the Equity share market whereas Equity Mutual Funds invest more in the equity share market and lesser in government bonds and other bonds & securities. Hybrid Mutual Funds invest partially in Debt Mutual Fund and Equity Mutual Fund.
But is still fixed deposit the appropriate investment option in the market? Does a Fixed deposit still provide a better rate of interest? Or there are other investment options like Mutual Funds that offer better investment returns in a better way?
Which one is better Fixed deposit or Mutual Fund?
FD is a trendy investment option provided by banking companies for short-term and long-term periods. The rate of interest on fixed deposits is pre-decided by the Government of India. hence the growing inflation doesn’t impact the rate of return on these investments. Notably, the Fixed Deposit rate of interest is taxable for the investors but the Fixed Deposit investments are eligible for tax deductions under Section 80C of the Income Tax Act 1961.On the other hand, Mutual Funds are based on market investment with no fixed return. However, during the long run, they have been observed to give a 10-15% rate of return, which is pretty higher than fixed deposits. There are three types of Mutual Funds – Hybrid, Equity, and Debt.
In Debt Mutual Fund, most of the amount will invest in government bonds, corporate bonds, and securities and the rest of the amount is in the Equity share market whereas Equity Mutual Funds invest more in the equity share market and lesser in government bonds and other bonds & securities. Hybrid Mutual Funds invest partially in Debt Mutual Fund and Equity Mutual Fund.
