|Name of Fund||3 Year Returns (p.a.)||Scheme Category|
|ICICI Bank||6%||Fixed Deposit|
|State Bank of India||5.70%||Fixed Deposit|
|HDFC Bank||6.15%||Fixed Deposit|
|Punjab National Bank||6.29%||Fixed Deposit|
|Axis Bank||6.50%||Fixed Deposit|
Fixed Deposit is a financial investment tool that gives you a fixed interest until the maturity date. As compared to the savings account, it comes with a higher rate of interest.
In fixed deposits, you invest your funds for a fixed period and earn interest on the principal amount deposited. FD provides flexible tenure, which ranges from 7 days to 10 years. You can choose the desired term based on your business or personal needs. Further, the rate of interest depends on the term. It is pre-determined by the banks and remains the same throughout the tenure. On the maturity date, the bank credits the principal and interest amount to the investor's bank account.
You can also withdraw funds before maturity, but premature withdrawal comes with a lower interest rate and attracts penalties.
You can open an FD account either online or by going to the bank (public/private) branch directly. You only need to fill a form and submit the necessary documents. The minimum amount required for an FD varies from bank to bank. The maximum amount you can invest in an FD has no restrictions.
The mandatory documents required to open an FD account include:
Many investors may not be aware of the fact that some banks allow opening FD accounts without having a savings bank account. But, you will be required to submit the documents like identity proof, address proof, etc., along with the application form and undergo the know-your-customer (KYC) process.
Below is the list of best performing Debt mutual funds to invest in India.
|Name of Fund||5 Year Returns (p.a.)||Scheme Category|
|Axis Short Term Fund||7.56%||Short Duration Fund|
|HDFC Short Term Debt Fund||7.94%||Short Duration Fund|
|HDFC Corporate Bond Fund||8.14%||Corporate Bond Fund|
|DSP Government Securites Fund||9.31%||Gilt Fund|
|ICICI Prudential Credit Risk Fund||9.38%||Credit Risk Fund|
Debt Funds are those mutual funds that invest in fixed-interest generating securities, such as corporate bonds, treasury bills, government securities, and more. Even though these funds are subject to market volatility, they are less risky than equity funds.
Some of its key benefits are explained below.
Mutual funds are tax-friendly options, where the tax incidence arises only upon the redemption of the MF scheme. In the case of debt funds, taxation depends on the holding period. If the capital gains are earned within three years, they are taxed as per tax slab rates of investors. Long term capital gains, made after holding period of three years, are taxed at 20% post indexation.
Both fixed deposit and debt mutual funds serve a similar purpose but differ in various aspects. Let us look at the comparison so that you figure out which one is best for you.
Overall, keeping the above pointers in mind, the choice between fixed deposit and debt mutual fund depends entirely on your preferences. But, from the point of returns,taxation,liquidity,ease of operations, debt mutuals are more preferred investment vehicle than fixed deposit.
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Investment in mutual funds or any asset class comes with an inherent risk. This is just a web-based tool for getting a rough estimate about the future value of your SIP/lump sum investments. The calculations are based on projected annual returns and periods. The actual annual returns may be higher or lower than the estimated value and it may have a significant impact on the final returns/goals.
So, you are requested to kindly do your own analysis or hire an expert financial advisor/planner before making any investment decision.
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