Debt Mutual Funds:If you are the type of investor who no desire to know what the end result of the investment will be, or wishes to take the chance at perhaps earning more due to fluctuations in the market which could raise the rate of returns - then invest in debt mutual funds. These funds do not earn interest, but earn dividends which could go higher or lower than you anticipate. Historical performance data, however, does not support the notion that returns will be high.If your idea of investment is to have full knowledge and awareness of exactly how much you're investing, and how much you expect to receive as profitable returns, then invest in fixed deposits. These will give you a real picture of what to expect, and when to expect it. It also facilitates better financial planning, as you will already know how much the maturity amount is and how much you'll be earning at the end of the term.