Mutual funds or Fixed Deposits — which is safe to invest?

Hi there,

I have a some amount and I want it to put in some place where it can multiply. Which is best Mutual funds or Fixed Deposit in any National bank? The interest rates appears to be less in FDs but are Mutual Funds safe and secure compared to FDs?


3 Replies to “Mutual funds or Fixed Deposits — which is safe to invest?”

  1. FDs are safe but they can’t beat inflation but if u invest through best mutual fund house then it will sure u’ll get good return
    You can go with Franklin , Reliance , SBI , HDFC , these are good Mutual Fund

  2. The answer is in your “risk tolerance.” An investment in a fixed-deposit account has very little risk of loss, but for that safety you earn a very low return. With a mutual fund you can expect higher annual returns, but you also accept the risk of loss in any specific short-term period.

    This is one of the immutable laws of financial investments. High returns involve high risks. Low risk gets you low returns.

    So ask yourself how you feel about risk for this money. Are the funds intended to apply for a large purchas or goal in a relatively short time period? (A few years or less.) Then you should be risk-averse and use the safety of the deposit account. Or are these funds being put away for the long-term, say 5 years or more, and you won’t need it to meet living requirements? Then go with the mutual fund.

    Good luck.

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