Business
Mutual Funds and Fixed Deposits are considered as two of the safest investment options for the people. Investors always try to find the best suitable options for investment.
One of the reasons for this is the security and high returns, both at the same time. Both investment schemes have their own advantages and disadvantages.
FD and Mutual Funds both give returns. It is believed that investing in FD is quite safe but due to simple interest mode of growth, the increase in corpus remains slow.
On the other hand, Mutual Funds carry a little risk and the return on investment is three times if withdrawn after a long time.
Rather than simple interest, Mutual Funds work on compounding which gives interest in the next year on the interest received on your investment in the previous year.
If an investor decides to invest Rs 10 lakh to make FD for a maximum period of 10 years then the return expected will be from 6-7%. It is the same for private and government banks.
In Mutual Funds, if you invest Rs 10 lakh in lump sum, then after 10 years, you could get an average return of 12 per cent annually, as per reports.