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    Fixed Deposit versus Debt Mutual Fund

    We found 111 Fixed Deposit versus Debt Mutual Fund

    Institution Name
    Deposit Amount Range
    Tenure Range
    Interest Rate
    Up to ₹25L
    1 Year to 5 Years
    7.49% - 8.19% Monthly compounding
    Response Time Within 30 minutes
    Features
    Documents
    Good to Know
    Up to ₹25L
    1 Year to 5 Years
    7.75% - 8.5% Monthly compounding
    Response Time Within 30 minutes
    Features
    Highlights
    Documents
    Good to Know
    Up to ₹1Cr
    7 Days to 20 Years
    5% - 8.15% Quarterly compounding
    Response Time Within 30 minutes
    Features
    Highlights
    Documents
    Good to Know
    Up to ₹1Cr
    7 Days to 10 Years
    4% - 7.5% Quarterly compounding
    Response Time Within 30 minutes
    Features
    Highlights
    Documents
    Good to Know
    Up to ₹1Cr
    7 Days to 10 Years
    4.25% - 7.35% Monthly compounding
    Response Time Within 30 minutes
    Features
    Documents
    Good to Know
    Up to ₹1Cr
    15 Days to 20 Years
    4.25% - 6.9% Monthly compounding
    Response Time Within 30 minutes
    Features
    Documents
    Good to Know
    Up to ₹1Cr
    7 Days to 10 Years
    4% - 7% Monthly compounding
    Response Time Within 30 minutes
    Features
    Highlights
    Documents
    Good to Know
    NRI - FD
    Up to ₹1Cr
    1 Year to 5 Years
    6.5% - 7.10% Monthly compounding
    Response Time Within 30 minutes
    Features
    Documents
    Good to Know
    NRI - FD
    Up to ₹1Cr
    1 Year to 10 Years
    6% - 6.4% Monthly compounding
    Response Time Within 30 minutes
    Features
    Highlights
    Documents
    Good to Know
    NRI - FD
    Up to ₹1Cr
    1 Year onwards
    6.25% - 6.5% Monthly compounding
    Response Time Within 30 minutes
    Features
    Highlights
    Documents
    Good to Know
    Up to ₹1Cr
    7 Days to 10 Years
    4% - 7.35% Quarterly compounding
    Response Time Within 30 minutes
    Features
    Highlights
    Documents
    Good to Know
    NRI - FD
    Up to ₹1Cr
    1 Year to 5 Years
    6.85% Quarterly compounding
    Response Time Within 30 minutes
    Features
    Highlights
    Documents
    Good to Know
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  • Fixed Deposit versus Debt Mutual Fund Reviews

    • Karnataka Bank Fixed Deposit
      "Good Bank"
      0.5 5.0/5 "Blown Away!"
      I have an account for fixed deposit only with Karnataka bank. I have deposited around fifty five lakhs. I bank with Karnataka for more than twenty years, even my family members are having an account with the same bank. Their services are really good.
      Was this review helpful? 0
      , chennai
      Reviewed on May 22, 2017
    • ICICI Bank Fixed Deposit
      "Good one"
      0.5 3.5/5 "Pretty good"
      I have fixed deposit account with the ICICI bank and I got it from them because I had the salary account with them. Within two days of time fixed deposit account got opened and the maturity period is around one year of time. Interest rate is around 8% with them and am not that much happy with that. I would like to suggest that they can increase the rate of interest for the deposits.
      Was this review helpful? 0
      , hyderabad
      Reviewed on May 18, 2017
    • SBI Fixed Deposit
      "Too much of process involved"
      0.5 2.5/5 "Just OK"
      At other private bank a fixed deposit could be opened online and a customer does not have to visit the bank. In my case I had to visit State bank of India to open a fixed deposit and it has a lot of process involved. Like wise to close the same it is the same scenario.
      Was this review helpful? 2
      , pune
      Reviewed on May 10, 2017
    • SBI Fixed Deposit
      "Good "
      0.5 5.0/5 "Blown Away!"
      I am having fixed deposit account with the State bank of India and the interest rate is around 6.2% for the tenure of five years of time. I have opened this account through online, so it got happened very immediately. Charges are nil with them and I can get the money withdrawal in fraction of seconds.
      Was this review helpful? 4
      , pondicherry
      Reviewed on May 09, 2017
    • SBI Fixed Deposit
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      Long back I had Fixed deposit account with State bank of India. I selected the tenure period for six years. The bank had fixed a good rate of interest. At last I received the money with the promised interest amount. I am much satisfied with SBI for the FD service.
      Was this review helpful? 3
      , hyderabad
      Reviewed on May 09, 2017
    • Bank of Baroda Fixed Deposit
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I had Fixed Deposit account with Bank of Baroda about quite long back. The tenure period is six years and the fixed amount is four to five lakhs. The percentage of interest rate is quite good and they returned the money back with the promised interest amount.
      Was this review helpful? 1
      , hyderabad
      Reviewed on May 09, 2017
    • ICICI Bank Fixed Deposit
      "Average "
      0.5 2.0/5 "Expected more"
      I have withdrawn my fixed deposit account with the ICICI bank and the interest rate was around 7%. It took around one to two hours of time to open the account through online. There are no charges while withdrawing the amount , also it took around one month of time to get it.
      Was this review helpful? 1
      , pudukkottai
      Reviewed on May 08, 2017
    • IDBI Fixed Deposit
      "Very Responsive"
      0.5 4.0/5 "Great!"
      I deposited some amount with IDBI bank as a fixed deposit. Actually I deposited this amount for future savings also I will be getting some good interest rate at the end of the year. I got good support from the bank executives and they provided all the information regarding FD.
      Was this review helpful? 1
      , indore
      Reviewed on May 04, 2017
    • YES Bank Fixed Deposit
      "Good Service"
      0.5 3.0/5 "Satisfactory"
      Yes bank have some banking issues with them I believe. I have savings account, recurring and fixed deposit account with them. I never received quick response from the bank. But the bank is good for my fixed deposit account. Simply I opened an account with them and getting better service on it.
      Was this review helpful? 1
      , indore
      Reviewed on May 04, 2017
    • Kotak Fixed Deposit
      "Good Service"
      0.5 3.0/5 "Satisfactory"
      I have savings account with Kotak Mahindra bank. Even I have fixed deposit account as well. The period of FD is for one year. The bank is assigned relationship manager for me as I have so many accounts with them. I got good response from them for my FD. 1 years, 1years, relationship manager
      Was this review helpful? 0
      , indore
      Reviewed on May 04, 2017
    • SBI Fixed Deposit
      "Satisfactory Service"
      0.5 5.0/5 "Blown Away!"
      Even I have fixed deposit with State bank of India. The tenure period is one year. I deposit certain amount with them as their interest rate is good and incomparable. SBI gives good response to the people and they are very supportive as well. I have no issues with SBI.
      Was this review helpful? 0
      , indore
      Reviewed on May 04, 2017
    • Punjab National Bank Fixed Deposit
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I had invested in fixed deposit with Punjab National Bank. I have deposited ceratin amount on my account. I got good response from the bank when I opened FD. The bank was so supportive and they provided all the information regarding FD. The interest rates too are pretty attractive.
      Was this review helpful? 0
      , indore
      Reviewed on May 04, 2017
    • SBI Fixed Deposit
      "Average "
      0.5 1.0/5 "Really Bad"
      I had invested in fixed deposit with the State bank of India and the interest rate is very less like its around 7.15%, also the returns are also very less, which will be also applicable with the tax. Services provided by them is really not good and I would like to suggest that they need to provide the customer service in a much better way.
      Was this review helpful? 2
      , bhopal
      Reviewed on May 03, 2017
    • SBI Fixed Deposit
      "Fantastic"
      0.5 5.0/5 "Blown Away!"
      In terms of interest rate and everything State Bank of India is fine to have the fixed deposit and the service aspects are working fine with them. I am having this account from the last six to seven years of time and the response is always very good with the State Bank of India.
      Was this review helpful? 2
      , mundra
      Reviewed on May 03, 2017
    • HDFC Bank Fixed Deposit
      "Excellent to Excellent"
      0.5 5.0/5 "Blown Away!"
      I do have the fixed deposit account with the HDFC bank and the interest rate is differed according to the offers. All of my deposits will be taken care by my relationship manager. Total tenure is around five years of time and its a kind of small deposits. Net banking services are an excellent one with them.
      Was this review helpful? 2
      , bangalore
      Reviewed on Apr 26, 2017
    • Punjab National Bank Fixed Deposit
      "Customer service should be good and unique for everyone"
      0.5 4.0/5 "Great!"
      I do have fixed deposit account with the Fixed deposit and they have provided around 8.5% as interest rate. Services are perfect one for me and I do have good relationship with them because my relatives are working there. Net banking services are also working good and they are started to exhibit most of the services there.
      Was this review helpful? 1
      , ghaziabad
      Reviewed on Apr 26, 2017
    • Axis Bank Fixed Deposit
      "Excellent"
      0.5 5.0/5 "Blown Away!"
      I had invested in fixed deposit account with the Axis bank and the minimum tenure is around five years of time. Response is a good one with them and everything was done through online. Net banking services are working in an excellent way and it is really wonderful.
      Was this review helpful? 1
      , kolkata
      Reviewed on Apr 25, 2017
    • HDFC Bank Fixed Deposit
      "My FD"
      0.5 5.0/5 "Blown Away!"
      I had invested in FD with HDFC. The benefits what I get here is huge. I never used to visit the branch . I had got a phone call from them immediately they had sent their representative for the same. He helped me in filling the form and I do have online access and I view all the FD information online itself
      Was this review helpful? 2
      , kolkata
      Reviewed on Apr 20, 2017
    • andhra Bank Fixed Deposit
      "Good one"
      0.5 4.0/5 "Great!"
      Good, I can view all the accounts in one page that is why I had chosen this ANDHRA Bank FD. I have online access too. I can view and change the mat instructions online. I change the principle amount too. I do get a the certificate of interest from them proactively on a yearly basis
      Was this review helpful? 1
      , kurnool
      Reviewed on Apr 20, 2017
    • SBI Fixed Deposit
      "Its Trusted"
      0.5 4.0/5 "Great!"
      I was studying college, I have opened Fixed deposit in SBI, it is located in my college campus. I have submitted pan card, address proof, id proof to them and I have invested the amount of Rs.1,25,000 its for the period of four years, but I am not sure what is the benefit I will get after that maturity period.
      Was this review helpful? 23
      , chandigarh
      Reviewed on Mar 30, 2017
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    Fixed Deposit versus Debt Mutual Fund is Rated as "Excellent!" by 1736 Users

    Fees & Charges

    Promised Interest Rate

    Customer Service

    Responsiveness

    Fixed Deposit BYTES FROM OUR KITCHEN

    If you have a sizeable amount of money saved up and your primary investment goals are:

    • To invest in a low risk, non-volatile, and safe avenue.
    • To see returns within 5 years.
    • To see at least an 8% - 9% rate of returns.

    Then you have two widely popular investment options open to you – Fixed Deposits (FDs) and Debt Mutual Funds (Debt Mfs). These are both investments that meet the above criteria, and have their own features which distinguish themselves from each other. The differences in the way these two investments work can be seen as advantages or disadvantages depending on the type of investor you are.

    Which is the better investment option? Fixed deposit or debt mutual fund?

    To answer this question, one must consider the following points, and evaluate the type of investor he or she is:

    1. Safety of Capital invested.

      • Fixed deposits:
        • Have a credit rating system (as shown in the table below) that classifies and segregates investments based on overall safety of the initial capital invested.
        • The classification and rating system takes into account various factors like commodities and securities or avenues being invested in, the duration, the current market status, its volatility, etc. and gives you a real picture of how your investment can be expected to perform and how safe your investment is.
        • Are guaranteed by the government up to the extent of Rs.1,00,000.
        • Rating

          Typically issued by:

          Safety Level

          "Sovereign"

          The Government of India.

          Highest – no investment is safer than a "sovereign" investment.

          "AAA"

          Banks, large private companies and PSUs.

          Very high – there is little likelihood that your investment will do badly.

          "AA"

          Private companies.

          High – these are tried and tested investments and consistently perform well.

          "BBB"

          Private companies.

          Below average – you stand a very realistic chance of losing your capital.

          "BB", "B", "C" and lower

          Private companies.

          Poor – you will almost definitely lose your invested capital and have probably fallen victim to empty promises of huge returns.

      • Debt Mutual Funds:
        • Do not have a rating system, but the safety of the investment is gauged on the investment portfolio. Approximate investment safety levels are considered.
        • Involve a lot of diligent analysis simply to determine the safety of the investment.
        • Are not guaranteed by any authority to any extent.

        If you’re the kind of investor who has a high risk appetite and can afford to wager your savings – for a potentially huge benefit – but against staggering odds in an unstable financial market that’s littered with scams, then try your hand at debt mutual funds. You might get lucky.

        If you’re the kind of investor who falls in the majority category of those who wish to take a highly informed decision to invest hard earned capital in an established avenue of investment, which has a safety rating and is guaranteed up to Rs.1,00,000 – invest in fixed deposits.

    2. Premature withdrawal from investment.

      • Fixed Deposits:
        • Do not allow withdrawals before maturity. If a withdrawal is necessary, you will have to break your FD.
        • Few banks allow for partial withdrawal (or partial breaking), but in most cases the FD will have to be entirely broken.
        • Breaking a fixed deposit results in lower rate of interest and payment of penalty.
        • Penalties range from 0-15% of the initial invested amount.

      • Debit Mutual Funds:
        • Any amount can be withdrawn from the debit mutual fund account.
        • Amounts can be withdrawn at any time, and the mutual fund continues to function on the remaining amount.
        • There is no loss of interest rate.
        • Penalties are charged in the form of exit load, ranging from 0.25% - 1% and only applicable for periods less than one year.

        If you feel that you will need to break your investment before it reaches maturity and liquefy funds at short notice, then invest in debt mutual funds. But bear in mind that you will never receive the full benefit from any form of investment if you habitually break investments.

        If your investment pattern involves allowing all your well-planned and premeditated investments to fully reach maturity – and make full use of the huge maturity benefits – then invest in fixed deposits. Once an investment has been made, it is assumed that enough precautions and measures have been taken to allow for full returns.

        Keep in mind that any investment, if withdrawn halfway through, will never pay out as much as you had hoped.

    3. Rates of Returns on Investment.

      • Fixed Deposits:
        • Operate on the model of a fixed interest rate that’s communicated before you invest.
        • Current interest rates are around 8% - 9% (for investments > 1 year). This does not change due even in financial crises or volatility.
        • Enables financial planning.
        • Guaranteed return on investment.
        • Allows for calculation of an accurate amount of money that can be expected as total return on investment.

      • Debt Mutual Funds:
        • No fixed pre-communicated rate of interest.
        • Rate of interest must be guesses at based on previous fund performance and investment portfolio.
        • No guaranteed returns on investment.
        • Rate of returns are subject to market volatility and fluctuations in interest rates.

        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.

    4. Tax Liability.

    5. To understand the different taxes that apply on these investments, it’s important to understand the kind of return on investment they offer. Fixed deposits offer you return on investment in the form of interest, and Debt Mutual Funds offer return on investment in the form of capital appreciation or dividend. These two heads of income are taxed differently.

      • Fixed Deposits:
        • Attract a high rate of tax. Up to 30% depending on your personal tax rate.
        • Tax is applicable even on accrued interest which hasn’t been received yet.
        • Eventual income that compounds is lesser than in the case of non-taxed dividend income.

      • Debt Mutual Funds:
        • Attract the same rate of tax as FDs during the first year.
        • Taxed at a lower rate than FDs between the first year and third year.
        • Tax free from third year onwards.

        The reason that capital gains and dividend are taxed at a lower rate than interest income is because it is unsecured and a certain element of risk exists – bringing with it ambiguity about whether the investment will yield a profit or not. This risk is balanced by lower taxation, but leaves the investor open to the possibility of losing his investment. Interest income is taxed because it is a definite source of income which has been promised to the investor and has been secured up to Rs.1,00,000. A little taxation is a small price to pay for an investment that will almost certainly yield a profit and returns.

        If your investment strategy aims at saving on a little tax at the cost of exposing yourself to risk, invest in debt mutual funds.

        If your investment strategy aims at secured and guaranteed returns on investment from a high rated scheme, invest in fixed deposits.

    Overall, it should be noted that fixed deposits are the investment of choice for the majority of people who have investable amounts of savings, as it is a safer and more secure investment where funds are locked until they mature. It is ideal for those looking to park their funds and earn a decent amount of interest and benefits. Economic fluctuations do not affect the rate at which interest will accrue, as it is decided beforehand.

    Debt mutual funds, on the other hand, are investments which are less secure and can fail due to multiple reasons not limited to fluctuations in the economy. These investments are for those who can afford the risk in order to enjoy the slightly higher reward (when compared to fixed deposits). The primary advantages here are that you can liquefy your investment fast and at minimal cost, and can save on tax – at the cost of a risky investment platform.

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