In today’s time everyone invests in mutual funds and most people believe that investing in mutual funds is considered safe, however today we will tell you through this important article what things have to be kept in mind while investing 10,00,000 for 10 years and whether fixed deposit(FD)in mutual funds can give better returns or investing in mutual funds is an option to get higher returns. Mutual funds potentially promise higher returns but at the same time mutual funds can also be risky at times, whereas fixed deposit is considered absolutely safe and gives low returns but is considered safe. Let us tell you which option is better than fixed deposit and mutual fund.
What are mutual funds?
First of all, it is very important to know that if you are thinking of investing in mutual funds, then it is very important to know what a mutual fund is. Mutual funds are a means of investment where investors’ money is deposited to invest in stocks or other areas. Investors are owners of shares representing their share in the fund’s holdings and as the performance is good, good returns can be obtained. However, there can be risk in this as well. Investing without any expert’s advice can be harmful for your investment. Therefore, whenever you think of investing, definitely take expert’s advice once.
Why most people choose mutual funds
A big advantage of investing in mutual funds is that experts handle stock selection and monitoring. This proves how much risk is there in your investment or how much profit is being made. Apart from this, funds can be invested in various industries which have low risk, require less investment and have liquidity i.e. investors can easily redeem their investment on the existing NS.
What are the main features of Fixed Deposit?
Now let’s talk about the main features of Post Office Fixed Deposit. If you want to invest money in Fixed Deposit, you can open a single account and invest in it for a time period of one year to five years. Interest payment is calculated on a quarterly basis. Apart from this, you can start investing with as little as one thousand rupees and can also do more than that. Your money is considered absolutely safe in the Post Office Fixed Deposit.
Which option is right between Mutual Fund and HD?
- Mutual Fund: First of all, if we talk about mutual funds, then in terms of potential returns, it provides a return of Rs 21.58 lakh to Rs 31 lakh but there can be risk in it due to fluctuations in the market.
- Fixed Deposit: In this option of investment i.e. HD, you get safe returns of about Rs 21 lakh in a short time and capital security is considered in it, that is, any money invested by you is not at risk but is considered safe.
(Disclaimer: The information given in this article should not be considered as investment advice. You should invest after doing your own investigation or taking advice from an expert)