BANK FD Vs Mutual Fund please mention banks with higher interest rates

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Deal Newbie
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Guys to park nearly 1lakh what’s better as FD rates deteriorating still  bank is considered  safer option. yet I have been told mutual fund anytime better.

What you recommend FD or MF , DO SHARE RECOMMEND

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Indian post office has good interest rate if u have any senior citizens in home, RBL BANK also have good rates yet the bank is not that trusted

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By park, I believe it is a small period. If so, FD is the safest option IMO.

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Bro minimum time frame is 1 year, as well recommend for short period if return Is good

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If your horizon is short term then bank FD is good. Never invest big lumsum amount in mutual funds because market can always fall sharply and your returns will be affected. Mutual funds can give good returns if you invest some amount every time Nifty corrects by 5%. You can start with Nifty index mutual fund.

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andromeda wrote:

By park, I believe it is a small period. If so, FD is the safest option IMO.

Fd gives ~ 6% for a year. Inflation is around ~7.10%

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billubakra wrote:

Fd gives ~ 6% for a year. Inflation is around ~7.10%

I believe in “Return of money is more important than return on money”

Mutual funds are unpredictable for short term, so is the reason I suggested FD. 6% is decent IMO.

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RaviKhanna wrote:

If your horizon is short term then bank FD is good. Never invest big lumsum amount in mutual funds because market can always fall sharply and your returns will be affected. Mutual funds can give good returns if you invest some amount every time Nifty corrects by 5%. You can start with Nifty index mutual fund.

This holds true only for equity funds

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Majestic wrote:

This holds true only for equity funds

Not really. Even some debt mutual funds can give negative returns in short term.

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RaviKhanna wrote:

Not really. Even some debt mutual funds can give negative returns in short term.

‘Some’ is an important word here. Moreover, you clearly have written above comment by keeping in mind only equities – “invest some amount every time Nifty corrects by 5%. You can start with Nifty index mutual fund.” For short term, any equity fund is volatile enough to risk the capital.

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Even liquid funds are only giving ~3.5% now. Better to invest in FD than debt instruments.

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ak_43 wrote:

Any bank with good fd rates??

Idfc first gives 7% on 1 lakh and above

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andromeda wrote:

I believe in “Return of money is more important than return on money”

Mutual funds are unpredictable for short term, so is the reason I suggested FD. 6% is decent IMO.

I never said that some instrument is better than the other bro. Just compared it with the inflation rate. High rated debt instruments are safe though.

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billubakra wrote:

Fd rate is good but bank itself is not.

Generic rule: Any institution which gives higher interest during crisis is in crisis (wants money)

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but we have 5 lakh govt guarantee..is still any chance to loose.

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Anil10 wrote:

but we have 5 lakh govt guarantee..is still any chance to loose.

I beleive it is an insurance. I’m not sure of the process involved, but from what I guess, it is not so easy. Recent Yes Bank saga is a classic example.
Coming to the question. In extreme cases, the only thing that will be at loss is the time and return on it.

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You will get the money but how long it takes is unknown. There is chance it may get locked out for decades even.

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You can invest in Debt mutual funds, they are relatively safe if researched and monitored properly. As you have a short term investment horizon, look for funds which have no/minimal volatility, for example Ultra Short Term Bonds. These funds have bonds which match your tenure, so by the time you exit you would have completed a cycle.

Anyways peace of mind is what matters more, do what you feel. But always keep in mind to invest in a fund that invests in AAA bonds, you can check that on monthly factsheet of the AMC.

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can check liquid/ultra short/money market debt funds

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hedip52627 wrote:

You will get the money but how long it takes is unknown. There is chance it may get locked out for decades even.

yes still pmc bank depositors have not received their money

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Anil10 wrote:

but we have 5 lakh govt guarantee..is still any chance to loose.

Ask about that to the pmc and other cooperative bank customers. Plus no interest on the money for the period it is with them after the collapse.

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rsai01 wrote:

If someone thinks 5 lakh deposit insurance is easy if the financial institution fails please read this.

https://www.moneycontrol.com/news/business/pers...

Click-bait news. Basically this article says deposit insurance scheme gets its premium from scheduled commercial banks but since rbi has never allowed any scheduled commercial bank to fail in India so all the premium money is instead used for paying losses of cooperative banks.

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Well Hawkins cooker not a safer option as our money isn’t insured, while in bank upto 5 lakhs. DCB, indusind and IDFC first bank has a good FD rate.

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