Fixed Deposit vs Mutual Funds

Often people have difficulty deciding whether they should invest in Mutual Funds or make a fax deposit. Most financial planners advise that mutual funds are right if one wants a good return and is ready to take a risk. You can only choose FD or mutual funds.

However, if one is not willing to take risks and is satisfied with the simple interest, the fax can be deposited. There are so many gaps between FD vs. mutual funds. FD in the bank can get an interest of 6 to 7 percent in three years, but if one wants more returns, it would be okay to rely on mutual funds.

Difference between FD and mutual fund

When you are looking for an investment, you can either choose FD or mutual funds. 

  • FD is better than mutual funds, and it is a significant saving investment for the long term as well as for a short time, but mutual funds have some investment risk.
  • The rate of return is fixed, and in a mutual fund, a return is not fixed. In the investment market, there is always a completion between FD vs. MF.
  • Mutual funds vs. fixed Deposit have the main competition on fixed-rate return. In the long-run investment, the rate of return would be 10-15%.

Reason of FD vs. Mutual fund 

Analysts say it is more accurate to invest in long term mutual funds. It is difficult to accurately predict the share of a company in the short term in the ascending market. The real performance of a company, in the long run, is known. If someone has to withdraw money after a year or two, the fax deposit is excellent. Equity or balanced funds can be selected to invest in the condition of non-risk taking after retirement. It’s the first difference between a mutual fund and a Fixed Deposit. Another question arises here, which is a better mutual fund or FD?

Interest on fixed deposits in most banks is 6.6 to 7.10 percent per annum. However, mutual fund returns depend on different funds. A return of more than one lakh is to pay a 10 percent tax. FD can be relied upon if it is to invest carefully without taking risks.

Mutual funds vs. fixed deposit India 

  • It comes to SBI; the FD gets an interest of 6.7 percent in three years and will have an interest of 6.75 in five years. Similarly, ICICI is given a 6.5 percent interest in three and five years. HDFC pays 6 percent interest, but 7.65 percent interest is paid on a 5-year tax saving FD. While talking about mutual funds, an average of 15 percent returns can be expected in a year, and a profit of 20 to 35 percent in five years can also be received.
  • It depends on the stock market, and hence the risk remains. Investing in the long term scheme with understanding reduces risk. Due to this percentage, it has a significant difference between MF vs. FD.