WHAT ARE THE DIFFERENCE BETWEEN DEBT FUNDS AND FIXED DEPOSIT?

In this blog, we will discuss the difference between fixed deposit(FD) and debt funds(DF) because some people don't know the exact difference between them. That is why we will share the difference between FD and DF so, that this article will clear all your doubts. But first, we have to discuss what is FD and DF so, we will discuss this both and then we will explain the difference between them.

What Is Fixed Deposit?

A fixed deposit is a saving scheme where you save such an amount of money and you'll get a fixed return on your amount. There is no risk on FD but the rate of interest is very low.

Now, we will discuss the benefits of fixed deposit so, that it will be easy for you to understand FD.

1. Almost No Risk

Fixed Deposit is really very safe option in our country people like to save their money in FD's because banks give assurance to their customers, That the money is safe. That is why people love to invest their money in FD because of the safety options.

2. High Liquidity

Fixed Deposit is a high liquid option because there is no lock-in period. You can anytime withdraw your money. But if you withdraw your amount before maturity then you have to pay a little amount of penalty on your amount.

3. Transparent

On the off chance that you think about obligation finances versus fixed stores, however, FDs are exceptionally protected instruments, bank defaults can't be controlled out of the domain of potential outcomes. Normal investors have next to no data on credits given by banks, NPAs of banks, terrible obligations discounted and so forth Obligation assets then again are exceptionally straightforward as the plan portfolio is revealed month to month by the AMCs in the factsheets with complete data, similar to instrument name, FICO score, and openness of particular instruments in the plan portfolio.

Read This Top 5 Investment Options In India That Can Give You Higher Returns For More.
What Are Debt Funds?

Such a venture gadget amasses a pool of corpora from a few financial backers and channels the assets significantly towards obligation instruments. These are more secure contrasted with value MFs since the hidden resources paying off debtors' reserves basically include securities, government protections, currency market instruments, business papers, and so forth.

Now we will discuss the benefits of debt funds so, that you can easily differentiate between them.

1. Expected Higher Returns

If you want to get higher returns then debt funds are the best option for you because they can give you better than FD. But if you can take risks then you should invest in debt funds.

2. Liquidity

You can reclaim your interests owing debtors assets at the predominant NAV, which can either be lower or higher than what you at first contributed. Such reclamation likewise includes a leave load.

3. Transparency

The best part of debt funds is that you can easily check your investment because it is completely transparent. That is why debt funds are a good option if you want to get higher returns.

Conclusion

These are the difference between fixed deposit and debt funds. Hope you'll like the article because we've explained each and everything in this blog which is really very informative for you.