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INVEST TODAY FOR YOUR FUTURE

INVEST. EARN. RELAX.

INVEST TODAY FOR YOUR FUTURE

INVEST. EARN. RELAX.

INVEST TODAY FOR YOUR FUTURE

INVEST. EARN. RELAX.

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Fixed Deposit   VS   Mutual Funds

FactorsFixed DepositDebt Mutual Funds
Typical Returns7% 8-10%
Tax (Most Important)*As Per Tax Slab Debt Less Than 5%
Arbitrage - 0%
Lockin PeriodFixed Term/ Premature With PenaltyNIL
CompoundingQuarterlyDaily
Typical Net Return
(Post Taxes & Penalties)
5-6%8-10%
Risk FactorLowLow
# Taxation details are as per existing tax laws. The nature of tax will depend based on the individuals tax

Taxes significantly affect income from FDs

While interest from Bank FDs is always taxed at your maximum rate, Debt funds attract almost nil tax after 3 years and lower tax between 1 and 3 years. Upto 1 year the tax impact for both is similar The illustration here -an investment of Rs 1 Lakh each ,we've assumed in a given year, all 3 investments deliver a return of 9% can help you understand the comparison better.
Factors Fixed Deposit Debt Mutual Fund Equity Mutual Fund
Investment Amount 100,000 100,000 100,000
Return (% p.a.) 9.0% 9.0% 9.0%
Taxable Income 9,000 1,500 -
Tax Paid (as applicable) 2,700 300 -
Post Tax Returns 6,300 8,700 9,000
Post Tax Returns (%) 6.3% 8.7% 9.0%
Holding Period 1 Year 1 Year 1 Year
Fund Value 109,000 109,000 109,000
Inflation 7.5% 7.5% 7.5%
Indexed Investment Amount - 107,500 -