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FD vs Debt Fund: If you want to earn bumper returns by investing your accumulated capital safely for short or medium term, then this news is for you. Most of the investors are confused about which one to choose between Fixed Deposit (FD) and Debt Mutual Funds for this period. On the one hand, customers get around 9% interest in debt mutual funds. While some small finance banks are currently offering up to 9.50% interest to their customers. According to a report published in ET, let’s find out what the experts say.
What the experts say
According to Naveen Kukreja, co-founder and CEO of paisabazaar.com, currently small finance bank FDs are safer and offer higher interest rates than debt mutual funds. As per RBI guidelines, now NBFC banks also like large public sector banks in case of bank failure Rs. Provides insurance cover up to 5 lakhs. On the other hand, debt mutual funds are market-linked products, subject to interest rate and credit risk.
What is Debt Mutual Fund?
A debt fund is a type of mutual fund category of funds where investors’ money is invested in bonds, government securities, treasury bills etc. Debt mutual funds are considered safer than equity funds. However, the lock-in period of money in debt mutual funds is less than that of bank FDs, so you can earn higher returns here in a shorter period.
How much interest is getting in FD
Small finance banks like Unity Small Finance Bank offer 9% interest on 1001 day FD to their general customers while 9.50% interest for the same period to their senior citizen customers. Similarly, Jana Small Finance Bank, Fincare Small Finance Bank, Suryoday Small Finance Bank and ESAF Small Finance Bank are offering up to 9% interest to their customers for different periods.
Disclaimer: Information provided here is only about stock performance, not investment advice. Investing in the stock market is subject to risk and you should consult your advisor before investing.