
Help Center
Getting Started
Trading
My Account
Mutual Funds
IPOs
Stock SIP
Gold
NPS
Government Securities
Fixed Deposits
Insurance
Loan
Smallcase
DartStock
Upstox API
NCD
US Stocks
Minor Account
Debt Funds Vs FDs | Which is a better investment?
When it comes to risk-free investments, Fixed Deposits (FDs) and Debt Funds are two common options. Although FDs have been the more popular choice, Debt Funds are gaining popularity - because they have the ability to give better returns than FD and are just as safe as FDs.
In fact, according to a report, 72 Debt Funds of 213 satisfied the test of having Credit Risk equal to, or better than a Fixed Deposit.
Let us analyse the main differences between FDs and Debt Funds.
| Particulars | Debt Fund | Fixed Deposit |
|---|---|---|
| Returns | 5.25% - 7.25% | 6.0% to 8.0% |
| Dividends | Yes | No |
| Risk | Low to moderate | Low |
| Liquidity | High | Low |
| Mode of investment | SIP or lump sum | Only lump sum |
| Penalties or charges on early withdrawal | Varies based on type of Mutual Fund | Yes |
| Other expenses | Expense ratio is involved | No management costs |
| Taxes | STCG as per income tax slab; LTCG @12.5% (Gains above ₹1.25 lakh are taxed at 12.5%) without indexation benefits What's the indexation benefit?Indexation benefit accounts for inflation. This method ensures your returns are taxed fairly. | As per income tax slab |
Trade with Upstox
Want to open a Demat account?
Open a FREE Demat and Trading account to invest in Stocks, Mutual Funds, IPOs and more.
+91
By signing up you agree to receive transaction updates on Whatsapp. You may also receive a call from an Upstox representative to help you with the account opening process.
Upstox Community
Upstox Community
| Topic | Replies | Views | Activity |
|---|