Fixed Deposits (FDs) are considered safe, while Mutual Funds offer higher returns but carry risk. So what’s better for you in 2025?
FD is a savings product offered by banks. You invest a lump sum, lock it for a time period, and earn a fixed interest (like 6-7%). It’s low risk, but returns are also limited.
Mutual funds pool money from investors to invest in stocks, bonds, etc. Returns vary based on market performance. You can start with as low as ₹500 via SIPs.
| Feature | Fixed Deposit | Mutual Fund |
|---|---|---|
| Risk | Very Low | Medium to High |
| Returns (2025) | 6-7% | 10-15% (Equity Funds) |
| Liquidity | Low (penalty on early exit) | High (you can redeem anytime) |
| Tax Benefit | Under 5-year tax saver FD | ELSS Mutual Funds (80C) |
| Start Amount | ₹1,000 – ₹10,000 | As low as ₹500 (SIP) |
If you want **safe, fixed returns**, go for FDs. If you're okay with some **risk and want higher returns**, mutual funds (especially SIPs) are better for long-term wealth building.
Pro Tip: Use both! Keep emergency funds in FD, and invest monthly via SIP for growth.