{"id":24130,"date":"2022-01-04T09:08:13","date_gmt":"2022-01-04T09:08:13","guid":{"rendered":"https:\/\/www.tatacapital.com\/blog\/?p=24130"},"modified":"2023-12-13T06:37:20","modified_gmt":"2023-12-13T06:37:20","slug":"comparative-analysis-of-debt-funds-vs-fixed-deposits","status":"publish","type":"post","link":"https:\/\/tata-blog.osian.dev\/moneyfy\/debt-funds\/comparative-analysis-of-debt-funds-vs-fixed-deposits\/","title":{"rendered":"Comparative Analysis of Debt Funds Vs Fixed Deposits"},"content":{"rendered":"\n

<\/p>\n\n\n\n

Among all the fixed-income investment avenues, fixed deposits are the most popular. They are unaffected by market fluctuations, offer high liquidity, and guarantee returns. <\/p>\n\n\n\n

But you cannot generate long-term wealth with fixed deposits alone. Of late, interest rates on FDs have been at multi-year lows because of rising inflation. In this scenario, debt funds have emerged as another popular fixed-income investment tool. <\/p>\n\n\n\n

Debt funds are a type of mutual fund <\/a>that invests your money in fixed-income instruments like government and corporate bonds<\/a>, treasury bills, deposit certificates, etc. Like all funds, they are subject to market risks. So, many risk-averse investors may choose FDs over them.  <\/p>\n\n\n\n

As an investor, where should you put your money? To help you decide, here is a comparative analysis of debt funds and fixed deposits.<\/p>\n\n\n\n

Returns in debt funds vs fixed deposits<\/strong><\/h2>\n\n\n\n

When you create a fixed deposit with an NBFC, you deposit a lump sum amount, decide a tenure, and earn interest on the amount during that period.  <\/p>\n\n\n\n

When you put your money in a debt fund, the fund manager<\/a> uses it to buy fixed-income securities, such as bonds, and earn interest income. So, the returns you get from a debt fund come from the interest income. <\/p>\n\n\n\n

Debt funds typically invest in a variety of bonds whose prices rise and fall depending on interest rates in the economy. The amount of interest paid on a bond is fixed. But if the price of a bond rises, your debt fund can return additional money over the interest income.  <\/p>\n\n\n\n

Additional Read –<\/strong> Mutual Funds VS Fixed Deposit : Which One Should You Choose?<\/a><\/p>\n\n\n\n

Comparing short-term and long-term returns<\/strong><\/h2>\n\n\n\n

FDs, especially cumulative FDs, work well in the long term. You can set your FD to get auto-renewed and earn compound interest. <\/p>\n\n\n\n

Debt funds are best for short and medium-term investment plans because they do not perform optimally in the long term. To meet your short-term and medium-term needs, you can choose debt funds that have a tenure ranging from 6 months to 2 years. <\/p>\n\n\n\n

Comparing other important features of debt funds vs FD<\/strong><\/h2>\n\n\n\n
 <\/td>Fixed deposits<\/strong><\/td>Debt funds<\/strong><\/td><\/tr>
Risk<\/strong><\/td>Fixed deposits are an extremely low-risk investment option.<\/td>Debt funds offer low to moderate risk. They are much less risky than equity funds.  <\/td><\/tr>
Taxation<\/strong><\/td>Interest earned is added to your taxable income. If the interest is more than Rs. 10,000, 10% TDS is applicable.<\/td>  Short term capital gains (holding period less than 3 years) are added to your taxable income and taxed as per your tax slab.

Long term capital gains are taxed at 20% with indexation.  <\/td><\/tr>
Investment option<\/strong><\/td>  Can only invest a lump sum amount.  <\/td>Can invest a lump sum or through SIP<\/a>. <\/td><\/tr>
Early withdrawal<\/strong><\/td>  A penalty is charged for premature withdrawals  <\/td>Small exit load charges (if applicable) and expense ratio are applicable.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Additional Read –<\/strong>Everything you need to know about Value Investing<\/a><\/p>\n\n\n\n

Which one should you choose?<\/strong><\/h3>\n\n\n\n

If you want to achieve your short or mid-term financial goals, you should invest in debt funds. You can also choose debt funds to diversify your portfolio. You can start investing in debt funds in just a few days with Tata Capital’s Moneyfy app.<\/a><\/p>\n\n\n\n

Moneyfy<\/a> gives you fund recommendations based on your goals and risk profile. So, download the app today and complete the online KYC.<\/p>\n\n\n\n

\n
\n
<\/div>\n\n\n\n
\n
\n
Download Moneyfy App<\/a><\/div>\n<\/div>\n<\/div>\n\n\n\n
<\/div>\n<\/div>\n<\/div><\/div>\n","protected":false},"excerpt":{"rendered":"

Among all the fixed-income investment avenues, fixed deposits are the most popular. <\/p>\n

Read More<\/a><\/p>\n","protected":false},"author":1,"featured_media":24131,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[71],"tags":[],"class_list":["post-24130","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-debt-funds"],"yoast_head":"\nComparative analysis of Debt Funds Vs Fixed Deposits - Tata Capital Blog<\/title>\n<meta name=\"description\" content=\"If you're someone who cant decide between debt fund vs fd then you're at the right place. Learn about debt fund vs fixed deposit and decide which one is for you.\" \/>\n<meta name=\"robots\" content=\"noindex, nofollow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Comparative analysis of Debt Funds Vs Fixed Deposits - Tata Capital Blog\" \/>\n<meta property=\"og:description\" content=\"If you're someone who cant decide between debt fund vs fd then you're at the right place. Learn about debt fund vs fixed deposit and decide which one is for you.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.tatacapitalmoneyfy.com\/blog\/debt-funds\/comparative-analysis-of-debt-funds-vs-fixed-deposits\/\" \/>\n<meta property=\"og:site_name\" content=\"Moneyfy Blog\" \/>\n<meta property=\"article:published_time\" content=\"2022-01-04T09:08:13+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-12-13T06:37:20+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.tatacapitalmoneyfy.com\/blog\/wp-content\/uploads\/2022\/01\/3-debt-funds-vs-fixed-deposits.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"770\" \/>\n\t<meta property=\"og:image:height\" content=\"400\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.tatacapitalmoneyfy.com\/blog\/debt-funds\/comparative-analysis-of-debt-funds-vs-fixed-deposits\/\",\"url\":\"https:\/\/www.tatacapitalmoneyfy.com\/blog\/debt-funds\/comparative-analysis-of-debt-funds-vs-fixed-deposits\/\",\"name\":\"Comparative analysis of Debt Funds Vs Fixed Deposits - Tata Capital Blog\",\"isPartOf\":{\"@id\":\"https:\/\/www.tatacapital.com\/blog\/#website\"},\"datePublished\":\"2022-01-04T09:08:13+00:00\",\"dateModified\":\"2023-12-13T06:37:20+00:00\",\"author\":{\"@id\":\"https:\/\/www.tatacapital.com\/blog\/#\/schema\/person\/0485591fd960aaa01211ff62d7d5faab\"},\"description\":\"If you're someone who cant decide between debt fund vs fd then you're at the right place. Learn about debt fund vs fixed deposit and decide which one is for you.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.tatacapitalmoneyfy.com\/blog\/debt-funds\/comparative-analysis-of-debt-funds-vs-fixed-deposits\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.tatacapitalmoneyfy.com\/blog\/debt-funds\/comparative-analysis-of-debt-funds-vs-fixed-deposits\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.tatacapitalmoneyfy.com\/blog\/debt-funds\/comparative-analysis-of-debt-funds-vs-fixed-deposits\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/tata-blog.osian.dev\/moneyfy\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Comparative Analysis of Debt Funds Vs Fixed Deposits\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.tatacapital.com\/blog\/#website\",\"url\":\"https:\/\/www.tatacapital.com\/blog\/\",\"name\":\"Moneyfy Blog\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.tatacapital.com\/blog\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.tatacapital.com\/blog\/#\/schema\/person\/0485591fd960aaa01211ff62d7d5faab\",\"name\":\"admin\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.tatacapital.com\/blog\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/a6a38ea7397ec3ff4a8dc9b854558dbfc2d1c417498effd79c6186d3edf6ae28?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/a6a38ea7397ec3ff4a8dc9b854558dbfc2d1c417498effd79c6186d3edf6ae28?s=96&d=mm&r=g\",\"caption\":\"admin\"},\"sameAs\":[\"https:\/\/tata-blog.osian.dev\/moneyfy\"],\"url\":\"https:\/\/tata-blog.osian.dev\/moneyfy\/author\/admin\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Comparative analysis of Debt Funds Vs Fixed Deposits - Tata Capital Blog","description":"If you're someone who cant decide between debt fund vs fd then you're at the right place. Learn about debt fund vs fixed deposit and decide which one is for you.","robots":{"index":"noindex","follow":"nofollow"},"og_locale":"en_US","og_type":"article","og_title":"Comparative analysis of Debt Funds Vs Fixed Deposits - Tata Capital Blog","og_description":"If you're someone who cant decide between debt fund vs fd then you're at the right place. Learn about debt fund vs fixed deposit and decide which one is for you.","og_url":"https:\/\/www.tatacapitalmoneyfy.com\/blog\/debt-funds\/comparative-analysis-of-debt-funds-vs-fixed-deposits\/","og_site_name":"Moneyfy Blog","article_published_time":"2022-01-04T09:08:13+00:00","article_modified_time":"2023-12-13T06:37:20+00:00","og_image":[{"width":770,"height":400,"url":"https:\/\/www.tatacapitalmoneyfy.com\/blog\/wp-content\/uploads\/2022\/01\/3-debt-funds-vs-fixed-deposits.jpg","type":"image\/jpeg"}],"author":"admin","twitter_card":"summary_large_image","twitter_misc":{"Written by":"admin","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.tatacapitalmoneyfy.com\/blog\/debt-funds\/comparative-analysis-of-debt-funds-vs-fixed-deposits\/","url":"https:\/\/www.tatacapitalmoneyfy.com\/blog\/debt-funds\/comparative-analysis-of-debt-funds-vs-fixed-deposits\/","name":"Comparative analysis of Debt Funds Vs Fixed Deposits - Tata Capital Blog","isPartOf":{"@id":"https:\/\/www.tatacapital.com\/blog\/#website"},"datePublished":"2022-01-04T09:08:13+00:00","dateModified":"2023-12-13T06:37:20+00:00","author":{"@id":"https:\/\/www.tatacapital.com\/blog\/#\/schema\/person\/0485591fd960aaa01211ff62d7d5faab"},"description":"If you're someone who cant decide between debt fund vs fd then you're at the right place. Learn about debt fund vs fixed deposit and decide which one is for you.","breadcrumb":{"@id":"https:\/\/www.tatacapitalmoneyfy.com\/blog\/debt-funds\/comparative-analysis-of-debt-funds-vs-fixed-deposits\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.tatacapitalmoneyfy.com\/blog\/debt-funds\/comparative-analysis-of-debt-funds-vs-fixed-deposits\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.tatacapitalmoneyfy.com\/blog\/debt-funds\/comparative-analysis-of-debt-funds-vs-fixed-deposits\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/tata-blog.osian.dev\/moneyfy\/"},{"@type":"ListItem","position":2,"name":"Comparative Analysis of Debt Funds Vs Fixed Deposits"}]},{"@type":"WebSite","@id":"https:\/\/www.tatacapital.com\/blog\/#website","url":"https:\/\/www.tatacapital.com\/blog\/","name":"Moneyfy Blog","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.tatacapital.com\/blog\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.tatacapital.com\/blog\/#\/schema\/person\/0485591fd960aaa01211ff62d7d5faab","name":"admin","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.tatacapital.com\/blog\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/a6a38ea7397ec3ff4a8dc9b854558dbfc2d1c417498effd79c6186d3edf6ae28?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/a6a38ea7397ec3ff4a8dc9b854558dbfc2d1c417498effd79c6186d3edf6ae28?s=96&d=mm&r=g","caption":"admin"},"sameAs":["https:\/\/tata-blog.osian.dev\/moneyfy"],"url":"https:\/\/tata-blog.osian.dev\/moneyfy\/author\/admin\/"}]}},"featured_image_url":"https:\/\/tata-blog.osian.dev\/moneyfy\/wp-content\/uploads\/2022\/01\/3-debt-funds-vs-fixed-deposits.jpg","_links":{"self":[{"href":"https:\/\/tata-blog.osian.dev\/moneyfy\/wp-json\/wp\/v2\/posts\/24130","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tata-blog.osian.dev\/moneyfy\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tata-blog.osian.dev\/moneyfy\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tata-blog.osian.dev\/moneyfy\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/tata-blog.osian.dev\/moneyfy\/wp-json\/wp\/v2\/comments?post=24130"}],"version-history":[{"count":4,"href":"https:\/\/tata-blog.osian.dev\/moneyfy\/wp-json\/wp\/v2\/posts\/24130\/revisions"}],"predecessor-version":[{"id":35697,"href":"https:\/\/tata-blog.osian.dev\/moneyfy\/wp-json\/wp\/v2\/posts\/24130\/revisions\/35697"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tata-blog.osian.dev\/moneyfy\/wp-json\/wp\/v2\/media\/24131"}],"wp:attachment":[{"href":"https:\/\/tata-blog.osian.dev\/moneyfy\/wp-json\/wp\/v2\/media?parent=24130"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tata-blog.osian.dev\/moneyfy\/wp-json\/wp\/v2\/categories?post=24130"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tata-blog.osian.dev\/moneyfy\/wp-json\/wp\/v2\/tags?post=24130"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}