How often do you find yourself in a situation wherein you have to choose between two things? Be it clothes, foods, movies, properties, or even investments, making a choice is not easy. However, analysing both options always helps.
Are you confused about whether to put your money in fixed deposits (FD) or mutual funds? Here’s a guide that will ease your dilemma of FD vs Mutual Fund.
Understanding how fixed deposits and debt mutual funds in India work
When you hear the word fixed deposits, you instantly think of banks. However, you can start a fixed deposit even with non-banking financial companies. So, what is a fixed deposit? It is an investment instrument that allows you to invest a lumpsum amount for a fixed tenure to earn returns at a fixed interest rate.
You know that mutual funds pool the money from different investors and invest in different securities. Debt mutual funds particularly invest in fixed-income securities such as debentures, corporate bonds, etc.
FD vs Mutual Funds – Comparing the two
Reasons that make debt mutual funds better than fixed deposits
- Liquidity: Open-ended debt mutual funds can be suitable for emergency needs too since you can redeem your money anytime. But the same flexibility is not available with FDs.
- Taxation: There is no difference in the taxation of accrued interest on FDs and short-term capital gains on debt mutual funds – Both are taxed as per your income slab. But long-term debt investments can be more tax-efficient, especially if you fall in the tax brackets higher than 20%.
- Returns: In the case of FDs, the return rate is fixed. Debt funds have the potential to deliver higher returns than FDs.
To sum it up
While FDs may be more common when it comes to investing savings, debt funds are far more beneficial. They are safer mutual funds, tend to be more tax efficient, and may generate better returns.
An investor education initiative by Edelweiss Mutual Fund
All Mutual Fund Investors have to go through a onetime KYC process. Investor should deal only with Registered Mutual Fund (RMF). For more info on KYC, RMF and procedure to lodge/redress any complaints, visit - https://www.edelweissmf.com/kyc-norms
MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATEDDOCUMENTS CAREFULLY.
How often do you find yourself in a situation wherein you have to choose between two things? Be it clothes, foods, movies, properties, or even investments, making a choice is not easy. However, analysing both options always helps.
Are you confused about whether to put your money in fixed deposits (FD) or mutual funds? Here’s a guide that will ease your dilemma of FD vs Mutual Fund.
Understanding how fixed deposits and debt mutual funds in India work
When you hear the word fixed deposits, you instantly think of banks. However, you can start a fixed deposit even with non-banking financial companies. So, what is a fixed deposit? It is an investment instrument that allows you to invest a lumpsum amount for a fixed tenure to earn returns at a fixed interest rate.
You know that mutual funds pool the money from different investors and invest in different securities. Debt mutual funds particularly invest in fixed-income securities such as debentures, corporate bonds, etc.
FD vs Mutual Funds – Comparing the two
Reasons that make debt mutual funds better than fixed deposits
- Liquidity: Open-ended debt mutual funds can be suitable for emergency needs too since you can redeem your money anytime. But the same flexibility is not available with FDs.
- Taxation: There is no difference in the taxation of accrued interest on FDs and short-term capital gains on debt mutual funds – Both are taxed as per your income slab. But long-term debt investments can be more tax-efficient, especially if you fall in the tax brackets higher than 20%.
- Returns: In the case of FDs, the return rate is fixed. Debt funds have the potential to deliver higher returns than FDs.
To sum it up
While FDs may be more common when it comes to investing savings, debt funds are far more beneficial. They are safer mutual funds, tend to be more tax efficient, and may generate better returns.
An investor education initiative by Edelweiss Mutual Fund
All Mutual Fund Investors have to go through a onetime KYC process. Investor should deal only with Registered Mutual Fund (RMF). For more info on KYC, RMF and procedure to lodge/redress any complaints, visit - https://www.edelweissmf.com/kyc-norms
MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATEDDOCUMENTS CAREFULLY.
How often do you find yourself in a situation wherein you have to choose between two things? Be it clothes, foods, movies, properties, or even investments, making a choice is not easy. However, analysing both options always helps.
Are you confused about whether to put your money in fixed deposits (FD) or mutual funds? Here’s a guide that will ease your dilemma of FD vs Mutual Fund.
Understanding how fixed deposits and debt mutual funds in India work
When you hear the word fixed deposits, you instantly think of banks. However, you can start a fixed deposit even with non-banking financial companies. So, what is a fixed deposit? It is an investment instrument that allows you to invest a lumpsum amount for a fixed tenure to earn returns at a fixed interest rate.
You know that mutual funds pool the money from different investors and invest in different securities. Debt mutual funds particularly invest in fixed-income securities such as debentures, corporate bonds, etc.
FD vs Mutual Funds – Comparing the two
Reasons that make debt mutual funds better than fixed deposits
- Liquidity: Open-ended debt mutual funds can be suitable for emergency needs too since you can redeem your money anytime. But the same flexibility is not available with FDs.
- Taxation: There is no difference in the taxation of accrued interest on FDs and short-term capital gains on debt mutual funds – Both are taxed as per your income slab. But long-term debt investments can be more tax-efficient, especially if you fall in the tax brackets higher than 20%.
- Returns: In the case of FDs, the return rate is fixed. Debt funds have the potential to deliver higher returns than FDs.
To sum it up
While FDs may be more common when it comes to investing savings, debt funds are far more beneficial. They are safer mutual funds, tend to be more tax efficient, and may generate better returns.
An investor education initiative by Edelweiss Mutual Fund
All Mutual Fund Investors have to go through a onetime KYC process. Investor should deal only with Registered Mutual Fund (RMF). For more info on KYC, RMF and procedure to lodge/redress any complaints, visit - https://www.edelweissmf.com/kyc-norms
MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATEDDOCUMENTS CAREFULLY.
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MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.
