Fixed Deposit v / s Debt Fund – Even today most people in India do not know much about Investment Options like Share Market / Equity Market, Mutual Funds like Equity Mutual Funds , Debt Mutual Funds etc., so they believe that in Investment Options Investing in money is risky and there is a greater risk of loss of Invested Amount, as all these investment options depend on market fluctuations and it is determined on the basis that the investment Amount will increase. Or lack.
So because of these problems, investors who want to invest their saving money in an investment option, but they do not want to take too much risk on those money, then they always keep their money fixed Fixed Deposit , PPF Account , Recurring Deposit And invest in Secure Investment Options like Saving Account , which maintains the security of their Invested Amount, but even when investing these Investment Options, investors face many risks which are as follows.
Fixed Deposit v/s Debt Fund v/s Return
Investor has to bear the greatest risk of Rate of Return when investing in Fixed Deposit Investment Option, as Investor is given a return on their Invested Amount at a predetermined rate by the Bank every year when investing in these Investment Options, and This return is very less compared to the Inflation which increases year after year , hence this Return cannot beat the rising inflation rate.
Mutual Funds like Equity Mutual Funds, Debt Mutual Funds have very high risk of money as the return in these investment options depends entirely on the fluctuations in the market and the company whose funds you have invested in, if As the value of that fund increases, your Invested Amount will also increase as a result and if there is a decrease in the Fund’s value then your Invested Amount will also decrease.
Fixed Deposit v/s Debt Fund v/s Risks
Investor is guaranteed to get back the amount of Amount Investor has invested in Fixed Deposit . The risk of loss of the investor’s money on investing in it is very negligible, while investing in Debt Funds carries the risk of loss of the invested Amount because the increase or decrease in that Amount is entirely dependent on the market Does.
However the Fund Industry is very closely monitored by SEBI . So it is not always the risk of loss of money, rather Experts believe that if a long term investment is made in Mutual Funds, then a good Amount can be created.
Fixed Deposit v/s Debt Fund v/s Taxation
Fixed Deposit and Debt Fund Taxation perspective is very different. Whatever income an investor makes by investing in Fixed Deposit is considered as Investor’s Interest Income and hence it is added to Investor’s Normal Income, so that Tax Pay can be made on it. Also , TDS is also deducted from the Interest Income by the bank.
Since most investors in India fall in the 30% Tax Brackets, a large Amount of their Interest Income goes in the form of Tax itself, so if viewed in a nutshell, Investor in a Fixed Deposit Scheme would lose It only happens, not earnings.
Whereas if the Investor invests in Debt Fund for 36 months or less , then the Investor is required to pay tax at the same rate on whatever income the Investor makes, whereas usually such TDS ( Tax Deducted at Source) is not deducted on income.
But if the Investor invests in Debt Fund for more than 36 months, then whatever return the Investor gets from such investment is considered as Long Term Capital Gain and the Investor will get 20% Tax Pay has to be done with indexation at the rate.
If seen in this way, the risk in Fixed Deposit Investment is negligible, then the income is also negligible and there is little risk in Debt Fund but income is very high.
Fixed Deposit v/s Debt Fund v/s Liquidity
If at any time the Investor suddenly needs money, he can sell his Debt Funds and all the money he gets from selling Debt Funds within two to three Working Days (Working Days) Credit is given to, which depends on whether ECS Mandate has been registered or not.
Similarly, if the Invested Amount sometimes a few days need to Premature Withdraw the Fixed Deposit is available on the Notice of a day or two, but Fixed Deposit for Premature Withdraw to Investor ‘s Penalty Pay is required .
Usually, if Investor can invest with Amd in Debt Funds within a year with Withdraw / Redemption, then in this case the Investor has to pay Exit Loads or in simple words, Charges Pay.
Important things related to Fixed Deposit v / s Debt Fund .Read also: Gilt, Income, Dynamic Bond Funds अौर Fixed Maturity Plans
Above Discussion After that makes sense Fixed Deposit in Investment is a negligible risk to Return also not get the same and Debt Fund over with little risk of Return is to be made . So the question arises: Investor exactly what the Investment Options in Investment should ?
The answer to this question is as follows.
If the Investor has just started earning money in his life, we recommend that he can take more risk in his life right now, so he should spend more of his Savings than Mutual Funds like Equity Investment should be made for long term in Mutual Funds, Debt Mutual Funds, Share Market etc. , so that maximum Return can be earned.
While if the Investor is a Retired Person, then he should spend most of his Savings in any Investment Option in Secure Investment Options like Post Office Saving Account , Time Deposit Scheme , Monthly Income Scheme , Bank Fixed Deposit Scheme, Recurring Deposit Scheme etc. Invest because they have no way of earning other than pension after retirement in their life, so they cannot take any risk on their Savings.
If you want to know more about Investment, which Investor should invest how much Amount in which Investment Options, then what is our Asset Allocation and Different Types of Investments? You can get enough information by reading the article.
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