Both Fixed Deposits and Mutual Funds are different means of investment. The advantages of both are also different.
Generally, people looking for schemes with guaranteed returns prefer to invest in fixed deposits, i.e., FDs.
But for those who want to get better returns, mutual funds can be a good option. Mutual funds are linked to the market.
You can invest in it through SIP. Its better results have come out for some time, and investors have collected massive amounts of money through mutual funds.
Let us tell you the essential things related to Fixed Deposit and Mutual funds so that you can understand where to invest will be a profitable deal for you.
Who is better in terms of interest?
With the interest rate with which you fix your amount in FD, you get the benefit according to the same interest rate on maturity.
Today, a maximum of 8 percent interest is being received in most of the banks on FD. At the same time, there is a link to the mutual fund market.
The effect of the ups and downs of the market is seen in this. But if you invest in it through SIP, you get an average interest of up to 12%, which is much better than FD. This interest can also be high.
Which is better in terms of flexibility?
In terms of flexibility, mutual funds are considered better. You can withdraw money whenever you need funds. If you cannot pay installments continuously, you can also pause it for some time.
At the same time, this does not happen in FD. Once you have fixed the money, you cannot withdraw the money before that. If removed, then you have to pay the penalty.
Tax friendly who?
Even in terms of tax, mutual funds can be better than FDs. In the ELSS scheme of mutual funds,
you can get tax exemption only for a lock-in period of three years, but to get the tax benefit in FD, you have to invest for at least 5 years.
Apart from this, one advantage of mutual funds is that you can also start with a small amount. SIP starts at just Rs 500.
