FD vs Mutual Fund

The best options of investment guarantee substantial returns and high security for funds. While equity market trading is anytime the preferred option to earn good returns, it’s not the most safe form for investment. Markets for equity are extremely sensitive towards market risks as well as fluctuating stocks owing to numerous factors including economic and social conditions, both regional and global political instability. Therefore, safe options for investments are sought out by making such comparisons like FD vs Mutual fund when economic condition seems bleak or simply just for ensuring the safety of funds.

What is Fixed Deposit?

It refers to the investment scheme provided by banks as well as non-banking finance companies. They offer higher returns on principal investment when compared with the returns from a normal savings account. Fixed deposit carries a specific tenure, giving it this name. Creation of a different account is not always required.

What is a Mutual Fund?

It is the financial vehicle constituted by a collection of money gathered from numerous investors for investment in securities such as stocks, instruments of money market, bonds, and other kinds of assets.

Difference between FD and Mutual Fund

Mutual funds usually refer to portfolios of investment spread out across different investments to gain best of returns while ensuring high levels of safety; mutual funds that are debt focussed invest more within debt instruments as compared to equity instruments. These are considered safer than the conventional ones which make investments in both equity and debt instruments, however, the situation changed recently.

When it comes to FD vs mutual fund, though the FD interest rates are fixed; Fixed deposits have always proven to be a safe investment option, since they require the investor to invest for a specific tenure and in turn receive a lump sum when the said tenure ends. Additionally one can easily calculate FD returns as its a fixed and assured sum with the help of a FD Calculator.

Benefits of Mutual Fund vs Fixed deposit

Mutual fund vs Fixed deposit calculator to help you make a better choice from FD or mutual funds

  • Assured returns:

Recently, especially due to defaults by big companies such as IL&FS, mutual funds that are debt focussed are starting to appear as a risky option for investment. Investors have greatly suffered due to these businesses going under. In such times, FD appears to be a better investment option. The government plays the role of the guarantor of funds which means that in spite of a bad economic performance or even shutting down of the bank due to shortage of funds, the provision of funds is ensured by the government. Therefore, fixed deposits prove to be a safe investment option, since they have assured returns.

  • Market risks:

Fixed deposits as a plan for investment were always considered safe because they remain unaffected by market threats unlike all other investment options. While instruments like equity or conventional types of mutual funds get affected by fluctuations in market conditions, be it regional or global and also political environment, fixed deposits do not get affected due to any of these. The tenure is chosen when the investment is made, and the payment guarantee for funds once the tenure gets over is given.

  • Liquidity:

Even though fixed deposits are considered as safe options for investment, they aren’t known for being very liquid. Since investment is locked up with a fixed tenure, assessment of funds is difficult without attracting any penalty for the preclosure. However, mutual funds which are debt focussed are more liquid as the securities held can be quite easily sold off in debt markets. This can prove useful, especially in times when an unexpected financial emergency shows up and cash crunch needs to be accounted for.

FAQs

  • ✔️How to choose an investment plan?

    The best options for investment are always determined according to requirements. The time period of locking in investments, depending upon goals for investment is one among the major determinants of the instruments opted for investment. The risk differs with the instrument chosen, however fixed deposits are majorly considered as a safe option offering lower returns than others. Whether you go for FD or mutual funds,consider individual goals prior to choosing an investment option and use the FD vs mutual fund calculator.

  • ✔️What is the interest rate for fixed deposits on Finserv MARKETS?

    Fixed deposits from Finserv MARKETS assure higher returns guaranteed with a stable interest rate of 8.40%.

  • ✔️What is the tenure for fixed deposits on Finserv MARKETS?

    You can choose any tenure from the range of 12 months and five years while investing on Finserv MARKETS fixed deposit and choose the period of time to keep funds to grow.

Our Pursuit, Your Happiness

Getting a loan to take care of my wedding and relieving my parents to enjoy the occasion was the best decision I ever made. Easy-to-apply, amazing interest rate and quick disbursal, what more can one ask for!

I am passionate about the vehicle I drive. I want to protect it with the best available option. What amazed me was the full transparency, quick quotes and the attractive discount on the premium while choosing the annual payment option!

Check your personal loan eligibility in seconds!

My husband and I will finally move into our own house this Diwali. All thanks to Finserv Markets, with competitive interest rates, minimal processing fees and easy to repay EMIs, our dream saw the light of reality in no time!

Get the best FD interest rates starting @ 8.40%. Let's start!

Kids grow up fast and to fulfill their dream trip to Disneyland I had everything but instant funds. With no collateral or guarantor required and a hassle-free processing, I gifted my family a memorable trip to Orlando with just a click!

Get sum insured up to 1 Crore! Let's start!

The best way to start looking for health insurance is to do a close study of the coverage needs and checking the insurance company's claim ratio. No unnecessary jargons, easy to apply claims process and choice of premia!

Zero additional charge on part-payment option on Business loans! Let's start!

I bought my first iPhone using my Bajaj Finserv EMI Network Card. Zero downpayment with a No cost EMI on Bajaj Finserv EMI store just made my day!

Get home loan sanctioned online in 72 hours! Let's start!