Comparison between Mutual Fund and Bank Fixed Deposit

We should compare Bank FDs with debt funds of Mutual Funds, since the objectives are similar (i.e. Income generation). FDs should not be compared with equity mutual funds, because objectives are different. The objective of equity mutual funds is capital appreciation, whereas the objectives of Bank FDs are capital protection and income generation. However it is true, many investors in India invest in Bank FDs, not for regular income, but for capital appreciation. This is due to extreme risk aversion and also lack of financial awareness. We have a number of articles, addressing this topic. Please refer to the following articles

• Comparing mutual fund returns and fixed deposit returns in bull and bear markets


• Best investment option in the coming financial year


• For comparison of close ended debt funds (e.g. Fixed Maturity Plans) and Bank FDs, please refer to our article, Top performing FMPs have given better returns than Bank FDS