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Are Fixed Deposits Still the Safest Way to Grow Money in 2026?

Updated on January 25, 2026 , 173 views

Fixed Deposits (FDs) have long been a go-to investment option for millions of Indians. Known for their safety, predictable returns, and simplicity, FDs are often the first financial product people trust with their hard-earned money.

Fixed Deposits

But with rising inflation, evolving investment options, and greater financial awareness, the question arises - Are Fixed Deposits still the safest way to grow your money? Or are they slowly losing relevance in a changing economy? Let’s dive deep.

What is a Fixed Deposit (FD)?

A Fixed Deposit is a financial instrument provided by banks and NBFCs that offers investors a higher rate of interest than a regular Savings Account, until the given maturity date. You deposit a lump sum amount for a fixed tenure, and the Bank pays interest either periodically or on maturity.

Key features:

  • Fixed interest rate (usually between 5% and 7%)
  • Safe and low-risk
  • Premature withdrawal allowed (with penalties)
  • Taxable interest income

Why FDs are Considered Safe

  • Capital Protection: The principal amount is protected.
  • insurance: Deposits up to ₹5 lakh per individual per bank are insured by DICGC (Deposit Insurance and Credit Guarantee Corporation).
  • Guaranteed Returns: You know upfront how much you will earn.
  • No Market Risk: Not affected by stock market Volatility.

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The Catch: What Most People Overlook

While FDs are undoubtedly safe, they are not always the best way to grow your money. Here’s why:

🔻 1. FDs May Not Beat Inflation

Let’s say:

  • You earn 6% interest on your FD
  • Inflation is at 6.5%
  • Your real return = -0.5% (negative)

Over time, inflation eats into the purchasing power of your money. What ₹1 lakh can buy today, it might not be able to buy 5 years later—even if you've “grown” it in an FD.

📖 Reference: Ministry of Statistics – Inflation Data

2. FD Interest is Taxable

  • FD interest is taxed as per your income slab.
  • If you're in the 30% slab, your post-tax return from a 6.5% FD is just 4.55%
  • This makes it even harder to beat inflation

⚠️ 3. Liquidity Comes With Penalties

You can withdraw an FD before maturity, but you’ll usually lose 0.5%–1% on interest. So it’s not truly flexible.

When FDs Still Make Sense in 2026

Despite these drawbacks, FDs aren’t useless. In fact, they can be an important part of a balanced Portfolio. Use FDs for:

  • Emergency funds (when safety > returns)
  • Short-term goals (6–24 months)
  • Low-risk capital preservation
  • Senior citizens (with higher FD rates and no market risk)

FD Alternatives: Where to Consider Investing Instead

If your goal is long-term wealth creation, here are some alternatives:

Fund Selection Methodology used to find 10 funds

  • Category: Equity
  • AUM Range: 500 to 1000000 Cr
  • Sorted On : 3-year return (high to low)
  • Tags: fcpro
  • No Of Funds: 10

✅ Equity Mutual Funds

  • Potential to beat inflation over 5–10 years
  • Suitable for long-term goals like retirement, home buying
  • Taxed more efficiently (especially under ₹1 lakh LTCG)

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)5 YR (%)2024 (%)Sub Cat.
DSP World Gold Fund Growth ₹65.542
↑ 2.04
₹1,75652.1105.9199.15528.7167.1 Global
Invesco India PSU Equity Fund Growth ₹65.85
↑ 0.82
₹1,4490.54.419.830.527.510.3 Sectoral
SBI PSU Fund Growth ₹33.8528
↑ 0.45
₹5,8171.66.51930.429.711.3 Sectoral
Franklin India Opportunities Fund Growth ₹247.017
↓ -4.25
₹8,380-5.9-3.34.128.220.33.1 Sectoral
Edelweiss Mid Cap Fund Growth ₹100.116
↑ 0.71
₹13,650-3.30.11125.723.53.8 Mid Cap
LIC MF Infrastructure Fund Growth ₹45.7262
↓ -0.11
₹1,003-9.4-83.525.624.8-3.7 Sectoral
Invesco India Mid Cap Fund Growth ₹170.49
↑ 0.50
₹10,296-8.7-5.712.425.521.76.3 Mid Cap
HDFC Mid-Cap Opportunities Fund Growth ₹197.15
↑ 0.48
₹92,642-1.91.413.925.424.56.8 Mid Cap
Franklin Build India Fund Growth ₹137.489
↑ 1.22
₹3,036-5.8-2.58.225.325.13.7 Sectoral
HDFC Infrastructure Fund Growth ₹45.403
↑ 0.31
₹2,452-6.4-4.66.825.126.52.2 Sectoral
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 23 Jan 26

Research Highlights & Commentary of 10 Funds showcased

CommentaryDSP World Gold FundInvesco India PSU Equity FundSBI PSU FundFranklin India Opportunities FundEdelweiss Mid Cap FundLIC MF Infrastructure FundInvesco India Mid Cap FundHDFC Mid-Cap Opportunities FundFranklin Build India FundHDFC Infrastructure Fund
Point 1Bottom quartile AUM (₹1,756 Cr).Bottom quartile AUM (₹1,449 Cr).Upper mid AUM (₹5,817 Cr).Upper mid AUM (₹8,380 Cr).Top quartile AUM (₹13,650 Cr).Bottom quartile AUM (₹1,003 Cr).Upper mid AUM (₹10,296 Cr).Highest AUM (₹92,642 Cr).Lower mid AUM (₹3,036 Cr).Lower mid AUM (₹2,452 Cr).
Point 2Established history (18+ yrs).Established history (16+ yrs).Established history (15+ yrs).Oldest track record among peers (25 yrs).Established history (18+ yrs).Established history (17+ yrs).Established history (18+ yrs).Established history (18+ yrs).Established history (16+ yrs).Established history (17+ yrs).
Point 3Rating: 3★ (top quartile).Rating: 3★ (upper mid).Rating: 2★ (bottom quartile).Rating: 3★ (upper mid).Rating: 3★ (upper mid).Not Rated.Rating: 2★ (bottom quartile).Rating: 3★ (lower mid).Top rated.Rating: 3★ (lower mid).
Point 4Risk profile: High.Risk profile: High.Risk profile: High.Risk profile: Moderately High.Risk profile: High.Risk profile: High.Risk profile: Moderately High.Risk profile: Moderately High.Risk profile: High.Risk profile: High.
Point 55Y return: 28.68% (top quartile).5Y return: 27.50% (upper mid).5Y return: 29.66% (top quartile).5Y return: 20.30% (bottom quartile).5Y return: 23.49% (bottom quartile).5Y return: 24.82% (lower mid).5Y return: 21.73% (bottom quartile).5Y return: 24.53% (lower mid).5Y return: 25.13% (upper mid).5Y return: 26.45% (upper mid).
Point 63Y return: 55.03% (top quartile).3Y return: 30.53% (top quartile).3Y return: 30.44% (upper mid).3Y return: 28.17% (upper mid).3Y return: 25.71% (upper mid).3Y return: 25.62% (lower mid).3Y return: 25.50% (lower mid).3Y return: 25.41% (bottom quartile).3Y return: 25.32% (bottom quartile).3Y return: 25.10% (bottom quartile).
Point 71Y return: 199.09% (top quartile).1Y return: 19.77% (top quartile).1Y return: 19.02% (upper mid).1Y return: 4.05% (bottom quartile).1Y return: 11.00% (lower mid).1Y return: 3.45% (bottom quartile).1Y return: 12.38% (upper mid).1Y return: 13.94% (upper mid).1Y return: 8.21% (lower mid).1Y return: 6.75% (bottom quartile).
Point 8Alpha: 1.32 (top quartile).Alpha: -1.90 (lower mid).Alpha: -0.22 (lower mid).Alpha: -4.27 (bottom quartile).Alpha: -1.98 (bottom quartile).Alpha: -18.43 (bottom quartile).Alpha: 0.00 (upper mid).Alpha: 0.63 (top quartile).Alpha: 0.00 (upper mid).Alpha: 0.00 (upper mid).
Point 9Sharpe: 3.42 (top quartile).Sharpe: 0.27 (upper mid).Sharpe: 0.33 (top quartile).Sharpe: -0.10 (bottom quartile).Sharpe: -0.02 (lower mid).Sharpe: -0.21 (bottom quartile).Sharpe: 0.11 (upper mid).Sharpe: 0.12 (upper mid).Sharpe: -0.05 (lower mid).Sharpe: -0.12 (bottom quartile).
Point 10Information ratio: -0.67 (bottom quartile).Information ratio: -0.37 (bottom quartile).Information ratio: -0.47 (bottom quartile).Information ratio: 1.69 (top quartile).Information ratio: 0.40 (upper mid).Information ratio: 0.28 (upper mid).Information ratio: 0.00 (upper mid).Information ratio: 0.44 (top quartile).Information ratio: 0.00 (lower mid).Information ratio: 0.00 (lower mid).

DSP World Gold Fund

  • Bottom quartile AUM (₹1,756 Cr).
  • Established history (18+ yrs).
  • Rating: 3★ (top quartile).
  • Risk profile: High.
  • 5Y return: 28.68% (top quartile).
  • 3Y return: 55.03% (top quartile).
  • 1Y return: 199.09% (top quartile).
  • Alpha: 1.32 (top quartile).
  • Sharpe: 3.42 (top quartile).
  • Information ratio: -0.67 (bottom quartile).

Invesco India PSU Equity Fund

  • Bottom quartile AUM (₹1,449 Cr).
  • Established history (16+ yrs).
  • Rating: 3★ (upper mid).
  • Risk profile: High.
  • 5Y return: 27.50% (upper mid).
  • 3Y return: 30.53% (top quartile).
  • 1Y return: 19.77% (top quartile).
  • Alpha: -1.90 (lower mid).
  • Sharpe: 0.27 (upper mid).
  • Information ratio: -0.37 (bottom quartile).

SBI PSU Fund

  • Upper mid AUM (₹5,817 Cr).
  • Established history (15+ yrs).
  • Rating: 2★ (bottom quartile).
  • Risk profile: High.
  • 5Y return: 29.66% (top quartile).
  • 3Y return: 30.44% (upper mid).
  • 1Y return: 19.02% (upper mid).
  • Alpha: -0.22 (lower mid).
  • Sharpe: 0.33 (top quartile).
  • Information ratio: -0.47 (bottom quartile).

Franklin India Opportunities Fund

  • Upper mid AUM (₹8,380 Cr).
  • Oldest track record among peers (25 yrs).
  • Rating: 3★ (upper mid).
  • Risk profile: Moderately High.
  • 5Y return: 20.30% (bottom quartile).
  • 3Y return: 28.17% (upper mid).
  • 1Y return: 4.05% (bottom quartile).
  • Alpha: -4.27 (bottom quartile).
  • Sharpe: -0.10 (bottom quartile).
  • Information ratio: 1.69 (top quartile).

Edelweiss Mid Cap Fund

  • Top quartile AUM (₹13,650 Cr).
  • Established history (18+ yrs).
  • Rating: 3★ (upper mid).
  • Risk profile: High.
  • 5Y return: 23.49% (bottom quartile).
  • 3Y return: 25.71% (upper mid).
  • 1Y return: 11.00% (lower mid).
  • Alpha: -1.98 (bottom quartile).
  • Sharpe: -0.02 (lower mid).
  • Information ratio: 0.40 (upper mid).

LIC MF Infrastructure Fund

  • Bottom quartile AUM (₹1,003 Cr).
  • Established history (17+ yrs).
  • Not Rated.
  • Risk profile: High.
  • 5Y return: 24.82% (lower mid).
  • 3Y return: 25.62% (lower mid).
  • 1Y return: 3.45% (bottom quartile).
  • Alpha: -18.43 (bottom quartile).
  • Sharpe: -0.21 (bottom quartile).
  • Information ratio: 0.28 (upper mid).

Invesco India Mid Cap Fund

  • Upper mid AUM (₹10,296 Cr).
  • Established history (18+ yrs).
  • Rating: 2★ (bottom quartile).
  • Risk profile: Moderately High.
  • 5Y return: 21.73% (bottom quartile).
  • 3Y return: 25.50% (lower mid).
  • 1Y return: 12.38% (upper mid).
  • Alpha: 0.00 (upper mid).
  • Sharpe: 0.11 (upper mid).
  • Information ratio: 0.00 (upper mid).

HDFC Mid-Cap Opportunities Fund

  • Highest AUM (₹92,642 Cr).
  • Established history (18+ yrs).
  • Rating: 3★ (lower mid).
  • Risk profile: Moderately High.
  • 5Y return: 24.53% (lower mid).
  • 3Y return: 25.41% (bottom quartile).
  • 1Y return: 13.94% (upper mid).
  • Alpha: 0.63 (top quartile).
  • Sharpe: 0.12 (upper mid).
  • Information ratio: 0.44 (top quartile).

Franklin Build India Fund

  • Lower mid AUM (₹3,036 Cr).
  • Established history (16+ yrs).
  • Top rated.
  • Risk profile: High.
  • 5Y return: 25.13% (upper mid).
  • 3Y return: 25.32% (bottom quartile).
  • 1Y return: 8.21% (lower mid).
  • Alpha: 0.00 (upper mid).
  • Sharpe: -0.05 (lower mid).
  • Information ratio: 0.00 (lower mid).

HDFC Infrastructure Fund

  • Lower mid AUM (₹2,452 Cr).
  • Established history (17+ yrs).
  • Rating: 3★ (lower mid).
  • Risk profile: High.
  • 5Y return: 26.45% (upper mid).
  • 3Y return: 25.10% (bottom quartile).
  • 1Y return: 6.75% (bottom quartile).
  • Alpha: 0.00 (upper mid).
  • Sharpe: -0.12 (bottom quartile).
  • Information ratio: 0.00 (lower mid).
*Some of the Best equity funds are listed above sorted on last 3 year CAGR returns.

✅ Debt Mutual Funds

  • Slightly more risk than FDs, but better post-tax returns
  • Suitable for medium-term goals
  • Indexation benefits if held for 3+ years

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)2024 (%)Debt Yield (YTM)Mod. DurationEff. Maturity
PGIM India Credit Risk Fund Growth ₹15.5876
↑ 0.00
₹390.64.48.43 5.01%6M 14D7M 2D
Axis Credit Risk Fund Growth ₹22.2698
↑ 0.00
₹3681.23.28.27.88.78.22%2Y 1M 28D2Y 5M 26D
UTI Banking & PSU Debt Fund Growth ₹22.6256
↑ 0.02
₹1,0150.92.37.37.27.86.67%1Y 3M 11D1Y 5M 8D
Aditya Birla Sun Life Savings Fund Growth ₹567.599
↑ 0.36
₹23,6151.32.97.17.47.46.81%5M 19D6M 11D
Aditya Birla Sun Life Money Manager Fund Growth ₹382.986
↑ 0.26
₹27,4491.32.87.17.47.46.62%6M 11D6M 11D
HDFC Banking and PSU Debt Fund Growth ₹23.6082
↑ 0.01
₹5,7190.51.76.77.27.56.99%3Y 2M 19D4Y 6M 18D
ICICI Prudential Long Term Plan Growth ₹37.8471
↓ -0.01
₹14,9290.61.56.57.57.27.62%4Y 10M 28D12Y 7M 13D
Indiabulls Liquid Fund Growth ₹2,608.63
↑ 0.42
₹1651.42.96.46.96.66.02%2M 2M 1D
PGIM India Insta Cash Fund Growth ₹351.18
↑ 0.07
₹5051.42.96.46.96.55.96%1M 11D1M 13D
HDFC Corporate Bond Fund Growth ₹33.3214
↑ 0.00
₹34,8050.31.46.47.57.37.13%4Y 6M 11D7Y 9M 18D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 21 Jan 22

Research Highlights & Commentary of 10 Funds showcased

Commentary PGIM India Credit Risk FundAxis Credit Risk FundUTI Banking & PSU Debt FundAditya Birla Sun Life Savings FundAditya Birla Sun Life Money Manager FundHDFC Banking and PSU Debt FundICICI Prudential Long Term PlanIndiabulls Liquid Fund PGIM India Insta Cash FundHDFC Corporate Bond Fund
Point 1Bottom quartile AUM (₹39 Cr).Bottom quartile AUM (₹368 Cr).Lower mid AUM (₹1,015 Cr).Upper mid AUM (₹23,615 Cr).Top quartile AUM (₹27,449 Cr).Upper mid AUM (₹5,719 Cr).Upper mid AUM (₹14,929 Cr).Bottom quartile AUM (₹165 Cr).Lower mid AUM (₹505 Cr).Highest AUM (₹34,805 Cr).
Point 2Established history (11+ yrs).Established history (11+ yrs).Established history (11+ yrs).Oldest track record among peers (22 yrs).Established history (20+ yrs).Established history (11+ yrs).Established history (16+ yrs).Established history (14+ yrs).Established history (18+ yrs).Established history (15+ yrs).
Point 3Top rated.Rating: 5★ (top quartile).Rating: 5★ (upper mid).Rating: 5★ (upper mid).Rating: 5★ (upper mid).Rating: 5★ (lower mid).Rating: 5★ (lower mid).Rating: 5★ (bottom quartile).Rating: 5★ (bottom quartile).Rating: 5★ (bottom quartile).
Point 4Risk profile: Moderate.Risk profile: Moderate.Risk profile: Moderate.Risk profile: Moderately Low.Risk profile: Low.Risk profile: Moderately Low.Risk profile: Moderate.Risk profile: Low.Risk profile: Low.Risk profile: Moderately Low.
Point 51Y return: 8.43% (top quartile).1Y return: 8.21% (top quartile).1Y return: 7.32% (upper mid).1Y return: 7.14% (upper mid).1Y return: 7.09% (upper mid).1Y return: 6.66% (lower mid).1Y return: 6.46% (lower mid).1Y return: 6.40% (bottom quartile).1Y return: 6.39% (bottom quartile).1Y return: 6.37% (bottom quartile).
Point 61M return: 0.27% (upper mid).1M return: 0.11% (lower mid).1M return: 0.15% (lower mid).1M return: 0.33% (upper mid).1M return: 0.32% (upper mid).1M return: -0.12% (bottom quartile).1M return: 0.04% (bottom quartile).1M return: 0.46% (top quartile).1M return: 0.47% (top quartile).1M return: -0.23% (bottom quartile).
Point 7Sharpe: 1.73 (lower mid).Sharpe: 2.72 (upper mid).Sharpe: 1.48 (lower mid).Sharpe: 3.14 (upper mid).Sharpe: 3.04 (upper mid).Sharpe: 0.74 (bottom quartile).Sharpe: 0.53 (bottom quartile).Sharpe: 3.18 (top quartile).Sharpe: 3.16 (top quartile).Sharpe: 0.63 (bottom quartile).
Point 8Information ratio: 0.00 (top quartile).Information ratio: 0.00 (top quartile).Information ratio: 0.00 (upper mid).Information ratio: 0.00 (upper mid).Information ratio: 0.00 (upper mid).Information ratio: 0.00 (lower mid).Information ratio: 0.00 (lower mid).Information ratio: -0.71 (bottom quartile).Information ratio: -0.10 (bottom quartile).Information ratio: 0.00 (bottom quartile).
Point 9Yield to maturity (debt): 5.01% (bottom quartile).Yield to maturity (debt): 8.22% (top quartile).Yield to maturity (debt): 6.67% (lower mid).Yield to maturity (debt): 6.81% (upper mid).Yield to maturity (debt): 6.62% (lower mid).Yield to maturity (debt): 6.99% (upper mid).Yield to maturity (debt): 7.62% (top quartile).Yield to maturity (debt): 6.02% (bottom quartile).Yield to maturity (debt): 5.96% (bottom quartile).Yield to maturity (debt): 7.13% (upper mid).
Point 10Modified duration: 0.54 yrs (upper mid).Modified duration: 2.16 yrs (lower mid).Modified duration: 1.28 yrs (lower mid).Modified duration: 0.47 yrs (upper mid).Modified duration: 0.53 yrs (upper mid).Modified duration: 3.22 yrs (bottom quartile).Modified duration: 4.91 yrs (bottom quartile).Modified duration: 0.17 yrs (top quartile).Modified duration: 0.11 yrs (top quartile).Modified duration: 4.53 yrs (bottom quartile).

PGIM India Credit Risk Fund

  • Bottom quartile AUM (₹39 Cr).
  • Established history (11+ yrs).
  • Top rated.
  • Risk profile: Moderate.
  • 1Y return: 8.43% (top quartile).
  • 1M return: 0.27% (upper mid).
  • Sharpe: 1.73 (lower mid).
  • Information ratio: 0.00 (top quartile).
  • Yield to maturity (debt): 5.01% (bottom quartile).
  • Modified duration: 0.54 yrs (upper mid).

Axis Credit Risk Fund

  • Bottom quartile AUM (₹368 Cr).
  • Established history (11+ yrs).
  • Rating: 5★ (top quartile).
  • Risk profile: Moderate.
  • 1Y return: 8.21% (top quartile).
  • 1M return: 0.11% (lower mid).
  • Sharpe: 2.72 (upper mid).
  • Information ratio: 0.00 (top quartile).
  • Yield to maturity (debt): 8.22% (top quartile).
  • Modified duration: 2.16 yrs (lower mid).

UTI Banking & PSU Debt Fund

  • Lower mid AUM (₹1,015 Cr).
  • Established history (11+ yrs).
  • Rating: 5★ (upper mid).
  • Risk profile: Moderate.
  • 1Y return: 7.32% (upper mid).
  • 1M return: 0.15% (lower mid).
  • Sharpe: 1.48 (lower mid).
  • Information ratio: 0.00 (upper mid).
  • Yield to maturity (debt): 6.67% (lower mid).
  • Modified duration: 1.28 yrs (lower mid).

Aditya Birla Sun Life Savings Fund

  • Upper mid AUM (₹23,615 Cr).
  • Oldest track record among peers (22 yrs).
  • Rating: 5★ (upper mid).
  • Risk profile: Moderately Low.
  • 1Y return: 7.14% (upper mid).
  • 1M return: 0.33% (upper mid).
  • Sharpe: 3.14 (upper mid).
  • Information ratio: 0.00 (upper mid).
  • Yield to maturity (debt): 6.81% (upper mid).
  • Modified duration: 0.47 yrs (upper mid).

Aditya Birla Sun Life Money Manager Fund

  • Top quartile AUM (₹27,449 Cr).
  • Established history (20+ yrs).
  • Rating: 5★ (upper mid).
  • Risk profile: Low.
  • 1Y return: 7.09% (upper mid).
  • 1M return: 0.32% (upper mid).
  • Sharpe: 3.04 (upper mid).
  • Information ratio: 0.00 (upper mid).
  • Yield to maturity (debt): 6.62% (lower mid).
  • Modified duration: 0.53 yrs (upper mid).

HDFC Banking and PSU Debt Fund

  • Upper mid AUM (₹5,719 Cr).
  • Established history (11+ yrs).
  • Rating: 5★ (lower mid).
  • Risk profile: Moderately Low.
  • 1Y return: 6.66% (lower mid).
  • 1M return: -0.12% (bottom quartile).
  • Sharpe: 0.74 (bottom quartile).
  • Information ratio: 0.00 (lower mid).
  • Yield to maturity (debt): 6.99% (upper mid).
  • Modified duration: 3.22 yrs (bottom quartile).

ICICI Prudential Long Term Plan

  • Upper mid AUM (₹14,929 Cr).
  • Established history (16+ yrs).
  • Rating: 5★ (lower mid).
  • Risk profile: Moderate.
  • 1Y return: 6.46% (lower mid).
  • 1M return: 0.04% (bottom quartile).
  • Sharpe: 0.53 (bottom quartile).
  • Information ratio: 0.00 (lower mid).
  • Yield to maturity (debt): 7.62% (top quartile).
  • Modified duration: 4.91 yrs (bottom quartile).

Indiabulls Liquid Fund

  • Bottom quartile AUM (₹165 Cr).
  • Established history (14+ yrs).
  • Rating: 5★ (bottom quartile).
  • Risk profile: Low.
  • 1Y return: 6.40% (bottom quartile).
  • 1M return: 0.46% (top quartile).
  • Sharpe: 3.18 (top quartile).
  • Information ratio: -0.71 (bottom quartile).
  • Yield to maturity (debt): 6.02% (bottom quartile).
  • Modified duration: 0.17 yrs (top quartile).

PGIM India Insta Cash Fund

  • Lower mid AUM (₹505 Cr).
  • Established history (18+ yrs).
  • Rating: 5★ (bottom quartile).
  • Risk profile: Low.
  • 1Y return: 6.39% (bottom quartile).
  • 1M return: 0.47% (top quartile).
  • Sharpe: 3.16 (top quartile).
  • Information ratio: -0.10 (bottom quartile).
  • Yield to maturity (debt): 5.96% (bottom quartile).
  • Modified duration: 0.11 yrs (top quartile).

HDFC Corporate Bond Fund

  • Highest AUM (₹34,805 Cr).
  • Established history (15+ yrs).
  • Rating: 5★ (bottom quartile).
  • Risk profile: Moderately Low.
  • 1Y return: 6.37% (bottom quartile).
  • 1M return: -0.23% (bottom quartile).
  • Sharpe: 0.63 (bottom quartile).
  • Information ratio: 0.00 (bottom quartile).
  • Yield to maturity (debt): 7.13% (upper mid).
  • Modified duration: 4.53 yrs (bottom quartile).
*List of top performing debt funds in India

✅ Public Provident Fund (PPF)

  • 15-year lock-in, but completely tax-free returns
  • Government-backed safety + decent inflation-beating returns

✅ National Pension System (NPS)

  • Long-term retirement corpus
  • Tax benefits under 80CCD(1B)
  • Partial equity exposure + annuity options

✅ RBI Bonds & Tax-Free Bonds

  • Offered by government bodies
  • Safer than corporate Bonds
  • Interest is often tax-efficient

Conclusion: Is an FD Still the Safest Way to Grow Money?

Safety? Yes. Growth? Not necessarily.

FDs still have a place in your portfolio—but only if used strategically. For short-term safety and capital preservation, FDs are great. But if you're looking to build wealth, beat inflation, and optimise taxes, it’s time to explore better options.

Smart Investing = balancing safety, growth, and liquidity.

FAQs

1. Can FDs beat inflation?

A: Not usually. Most FD rates barely match inflation after tax.

2. Is FD interest taxable?

A: Yes. It’s taxed as per your income slab under the old tax regime.

3. Are mutual funds riskier than FDs?

A: Yes, but they have the potential to give higher inflation-adjusted returns over the long term.

About the Fincash Research Team

At Fincash, our mission is to help investors make informed, confident decisions. With over 10 years in Mutual Fund distribution, our team blends deep industry expertise with a commitment to transparency, accuracy, and investor education.

Who We Are

AMFI Registration No.
112358
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U74999MH2016PTC282153
Location
Thane, Maharashtra, India
Experience
10+ years in Mutual Fund distribution

Our Expertise

  • Certified Mutual Fund Distributors with hands-on advisory experience.
  • Market analysts tracking performance, macro trends, and sectors.
  • Data specialists processing NAVs, allocations, and risk metrics from Morning Star.

Our Research Process

  • Data sourcing: SEBI-registered fund houses & verified third-party provider Morning Star
  • Screening: Returns, manager track record, expenses, sector mix, risk-adjusted metrics.
  • Expert review: Senior team members review every article and list for accuracy.
  • Updates: Regular refreshes so performance data reflects current market conditions.

Why Trust Us

  • Regulated & compliant: AMFI-registered and MCA-incorporated.
  • Investor-first: No pay-to-promote lists; suitability and performance drive coverage.
  • Education-focused: We simplify complex concepts for everyday investors.

Disclaimer

Content is for educational and informational purposes only and is not investment advice. Please consider your risk profile and consult a financial advisor before investing.

Disclaimer:
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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