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

Updated on March 29, 2026 , 261 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 ₹55.4042
↑ 0.46
₹2,1913.824110.546.226.9167.1 Global
SBI PSU Fund Growth ₹32.6872
↓ 0.00
₹6,545-3.61.29.329.425.311.3 Sectoral
Invesco India PSU Equity Fund Growth ₹59.93
₹1,511-9.5-5.84.22622.710.3 Sectoral
LIC MF Infrastructure Fund Growth ₹45.1863
↓ 0.00
₹1,007-8.4-7.93.524.721.2-3.7 Sectoral
SBI Healthcare Opportunities Fund Growth ₹415.515
↓ -5.79
₹4,077-0.5-1.10.924.416.4-3.5 Sectoral
UTI Healthcare Fund Growth ₹271.224
↓ -0.02
₹1,107-4.5-4.61.123.714.2-3.1 Sectoral
Franklin Build India Fund Growth ₹132.618
↓ -0.01
₹3,174-7.5-5.42.823.421.63.7 Sectoral
DSP India T.I.G.E.R Fund Growth ₹298.038
↓ -0.01
₹5,460-3.9-44.523.322-2.5 Sectoral
Franklin India Opportunities Fund Growth ₹223.16
↓ -5.46
₹8,428-13-11.9-1.723.317.43.1 Sectoral
DSP Natural Resources and New Energy Fund Growth ₹104.205
↓ -0.01
₹1,9905.211.722.723.22017.5 Sectoral
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 30 Mar 26

Research Highlights & Commentary of 10 Funds showcased

CommentaryDSP World Gold FundSBI PSU FundInvesco India PSU Equity FundLIC MF Infrastructure FundSBI Healthcare Opportunities FundUTI Healthcare FundFranklin Build India FundDSP India T.I.G.E.R FundFranklin India Opportunities FundDSP Natural Resources and New Energy Fund
Point 1Lower mid AUM (₹2,191 Cr).Top quartile AUM (₹6,545 Cr).Bottom quartile AUM (₹1,511 Cr).Bottom quartile AUM (₹1,007 Cr).Upper mid AUM (₹4,077 Cr).Bottom quartile AUM (₹1,107 Cr).Upper mid AUM (₹3,174 Cr).Upper mid AUM (₹5,460 Cr).Highest AUM (₹8,428 Cr).Lower mid AUM (₹1,990 Cr).
Point 2Established history (18+ yrs).Established history (15+ yrs).Established history (16+ yrs).Established history (18+ yrs).Established history (21+ yrs).Oldest track record among peers (26 yrs).Established history (16+ yrs).Established history (21+ yrs).Established history (26+ yrs).Established history (17+ yrs).
Point 3Rating: 3★ (upper mid).Rating: 2★ (lower mid).Rating: 3★ (upper mid).Not Rated.Rating: 2★ (bottom quartile).Rating: 1★ (bottom quartile).Top rated.Rating: 4★ (upper mid).Rating: 3★ (lower mid).Rating: 5★ (top quartile).
Point 4Risk profile: High.Risk profile: High.Risk profile: High.Risk profile: High.Risk profile: High.Risk profile: High.Risk profile: High.Risk profile: High.Risk profile: Moderately High.Risk profile: High.
Point 55Y return: 26.87% (top quartile).5Y return: 25.34% (top quartile).5Y return: 22.73% (upper mid).5Y return: 21.20% (lower mid).5Y return: 16.42% (bottom quartile).5Y return: 14.24% (bottom quartile).5Y return: 21.62% (upper mid).5Y return: 22.00% (upper mid).5Y return: 17.45% (bottom quartile).5Y return: 19.96% (lower mid).
Point 63Y return: 46.21% (top quartile).3Y return: 29.38% (top quartile).3Y return: 25.97% (upper mid).3Y return: 24.68% (upper mid).3Y return: 24.38% (upper mid).3Y return: 23.67% (lower mid).3Y return: 23.42% (lower mid).3Y return: 23.32% (bottom quartile).3Y return: 23.30% (bottom quartile).3Y return: 23.18% (bottom quartile).
Point 71Y return: 110.51% (top quartile).1Y return: 9.33% (upper mid).1Y return: 4.21% (upper mid).1Y return: 3.52% (lower mid).1Y return: 0.94% (bottom quartile).1Y return: 1.12% (bottom quartile).1Y return: 2.81% (lower mid).1Y return: 4.45% (upper mid).1Y return: -1.73% (bottom quartile).1Y return: 22.68% (top quartile).
Point 8Alpha: 6.90 (top quartile).Alpha: 0.92 (upper mid).Alpha: -6.26 (bottom quartile).Alpha: 4.76 (top quartile).Alpha: -1.63 (bottom quartile).Alpha: 0.62 (upper mid).Alpha: 0.00 (lower mid).Alpha: 0.00 (lower mid).Alpha: 3.52 (upper mid).Alpha: 0.00 (bottom quartile).
Point 9Sharpe: 4.06 (top quartile).Sharpe: 1.90 (upper mid).Sharpe: 1.47 (upper mid).Sharpe: 1.13 (bottom quartile).Sharpe: 0.55 (bottom quartile).Sharpe: 0.72 (bottom quartile).Sharpe: 1.51 (upper mid).Sharpe: 1.34 (lower mid).Sharpe: 1.33 (lower mid).Sharpe: 2.40 (top quartile).
Point 10Information ratio: -1.08 (bottom quartile).Information ratio: -0.27 (lower mid).Information ratio: -0.78 (bottom quartile).Information ratio: 0.34 (top quartile).Information ratio: -0.25 (lower mid).Information ratio: -0.39 (bottom quartile).Information ratio: 0.00 (upper mid).Information ratio: 0.00 (upper mid).Information ratio: 1.49 (top quartile).Information ratio: 0.00 (upper mid).

DSP World Gold Fund

  • Lower mid AUM (₹2,191 Cr).
  • Established history (18+ yrs).
  • Rating: 3★ (upper mid).
  • Risk profile: High.
  • 5Y return: 26.87% (top quartile).
  • 3Y return: 46.21% (top quartile).
  • 1Y return: 110.51% (top quartile).
  • Alpha: 6.90 (top quartile).
  • Sharpe: 4.06 (top quartile).
  • Information ratio: -1.08 (bottom quartile).

SBI PSU Fund

  • Top quartile AUM (₹6,545 Cr).
  • Established history (15+ yrs).
  • Rating: 2★ (lower mid).
  • Risk profile: High.
  • 5Y return: 25.34% (top quartile).
  • 3Y return: 29.38% (top quartile).
  • 1Y return: 9.33% (upper mid).
  • Alpha: 0.92 (upper mid).
  • Sharpe: 1.90 (upper mid).
  • Information ratio: -0.27 (lower mid).

Invesco India PSU Equity Fund

  • Bottom quartile AUM (₹1,511 Cr).
  • Established history (16+ yrs).
  • Rating: 3★ (upper mid).
  • Risk profile: High.
  • 5Y return: 22.73% (upper mid).
  • 3Y return: 25.97% (upper mid).
  • 1Y return: 4.21% (upper mid).
  • Alpha: -6.26 (bottom quartile).
  • Sharpe: 1.47 (upper mid).
  • Information ratio: -0.78 (bottom quartile).

LIC MF Infrastructure Fund

  • Bottom quartile AUM (₹1,007 Cr).
  • Established history (18+ yrs).
  • Not Rated.
  • Risk profile: High.
  • 5Y return: 21.20% (lower mid).
  • 3Y return: 24.68% (upper mid).
  • 1Y return: 3.52% (lower mid).
  • Alpha: 4.76 (top quartile).
  • Sharpe: 1.13 (bottom quartile).
  • Information ratio: 0.34 (top quartile).

SBI Healthcare Opportunities Fund

  • Upper mid AUM (₹4,077 Cr).
  • Established history (21+ yrs).
  • Rating: 2★ (bottom quartile).
  • Risk profile: High.
  • 5Y return: 16.42% (bottom quartile).
  • 3Y return: 24.38% (upper mid).
  • 1Y return: 0.94% (bottom quartile).
  • Alpha: -1.63 (bottom quartile).
  • Sharpe: 0.55 (bottom quartile).
  • Information ratio: -0.25 (lower mid).

UTI Healthcare Fund

  • Bottom quartile AUM (₹1,107 Cr).
  • Oldest track record among peers (26 yrs).
  • Rating: 1★ (bottom quartile).
  • Risk profile: High.
  • 5Y return: 14.24% (bottom quartile).
  • 3Y return: 23.67% (lower mid).
  • 1Y return: 1.12% (bottom quartile).
  • Alpha: 0.62 (upper mid).
  • Sharpe: 0.72 (bottom quartile).
  • Information ratio: -0.39 (bottom quartile).

Franklin Build India Fund

  • Upper mid AUM (₹3,174 Cr).
  • Established history (16+ yrs).
  • Top rated.
  • Risk profile: High.
  • 5Y return: 21.62% (upper mid).
  • 3Y return: 23.42% (lower mid).
  • 1Y return: 2.81% (lower mid).
  • Alpha: 0.00 (lower mid).
  • Sharpe: 1.51 (upper mid).
  • Information ratio: 0.00 (upper mid).

DSP India T.I.G.E.R Fund

  • Upper mid AUM (₹5,460 Cr).
  • Established history (21+ yrs).
  • Rating: 4★ (upper mid).
  • Risk profile: High.
  • 5Y return: 22.00% (upper mid).
  • 3Y return: 23.32% (bottom quartile).
  • 1Y return: 4.45% (upper mid).
  • Alpha: 0.00 (lower mid).
  • Sharpe: 1.34 (lower mid).
  • Information ratio: 0.00 (upper mid).

Franklin India Opportunities Fund

  • Highest AUM (₹8,428 Cr).
  • Established history (26+ yrs).
  • Rating: 3★ (lower mid).
  • Risk profile: Moderately High.
  • 5Y return: 17.45% (bottom quartile).
  • 3Y return: 23.30% (bottom quartile).
  • 1Y return: -1.73% (bottom quartile).
  • Alpha: 3.52 (upper mid).
  • Sharpe: 1.33 (lower mid).
  • Information ratio: 1.49 (top quartile).

DSP Natural Resources and New Energy Fund

  • Lower mid AUM (₹1,990 Cr).
  • Established history (17+ yrs).
  • Rating: 5★ (top quartile).
  • Risk profile: High.
  • 5Y return: 19.96% (lower mid).
  • 3Y return: 23.18% (bottom quartile).
  • 1Y return: 22.68% (top quartile).
  • Alpha: 0.00 (bottom quartile).
  • Sharpe: 2.40 (top quartile).
  • Information ratio: 0.00 (upper 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 ₹22.4886
↑ 0.00
₹36712.97.67.78.78.35%2Y 11M 12D4Y 3M 25D
Aditya Birla Sun Life Savings Fund Growth ₹573.63
↑ 0.12
₹21,4671.32.96.87.37.47.14%5M 23D6M 18D
Aditya Birla Sun Life Money Manager Fund Growth ₹386.727
↑ 0.07
₹30,7781.22.76.57.37.47.02%7M 17D7M 20D
UTI Banking & PSU Debt Fund Growth ₹22.8155
↑ 0.00
₹1,0990.92.36.57.17.86.87%1Y 18D1Y 1M 20D
PGIM India Low Duration Fund Growth ₹26.0337
↑ 0.01
₹1041.53.36.34.5 7.34%6M 11D7M 17D
Indiabulls Liquid Fund Growth ₹2,636.74
↑ 0.52
₹1931.52.96.26.96.65.55%17D17D
PGIM India Insta Cash Fund Growth ₹354.875
↑ 0.07
₹6771.42.96.16.96.56.43%26D29D
PGIM India Short Maturity Fund Growth ₹39.3202
↓ 0.00
₹281.23.16.14.2 7.18%1Y 7M 28D1Y 11M 1D
JM Liquid Fund Growth ₹74.3297
↑ 0.02
₹2,5241.42.966.86.46.07%1M 5D1M 8D
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 FundAditya Birla Sun Life Savings FundAditya Birla Sun Life Money Manager FundUTI Banking & PSU Debt Fund PGIM India Low Duration FundIndiabulls Liquid Fund PGIM India Insta Cash Fund PGIM India Short Maturity FundJM Liquid Fund
Point 1Bottom quartile AUM (₹39 Cr).Lower mid AUM (₹367 Cr).Top quartile AUM (₹21,467 Cr).Highest AUM (₹30,778 Cr).Upper mid AUM (₹1,099 Cr).Bottom quartile AUM (₹104 Cr).Lower mid AUM (₹193 Cr).Upper mid AUM (₹677 Cr).Bottom quartile AUM (₹28 Cr).Upper mid AUM (₹2,524 Cr).
Point 2Established history (11+ yrs).Established history (11+ yrs).Established history (22+ yrs).Established history (20+ yrs).Established history (12+ yrs).Established history (18+ yrs).Established history (14+ yrs).Established history (18+ yrs).Established history (23+ yrs).Oldest track record among peers (28 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: Moderately Low.Risk profile: Low.Risk profile: Moderate.Risk profile: Moderate.Risk profile: Low.Risk profile: Low.Risk profile: Moderate.Risk profile: Low.
Point 51Y return: 8.43% (top quartile).1Y return: 7.60% (top quartile).1Y return: 6.76% (upper mid).1Y return: 6.52% (upper mid).1Y return: 6.51% (upper mid).1Y return: 6.30% (lower mid).1Y return: 6.17% (lower mid).1Y return: 6.13% (bottom quartile).1Y return: 6.08% (bottom quartile).1Y return: 6.04% (bottom quartile).
Point 61M return: 0.27% (bottom quartile).1M return: -0.18% (bottom quartile).1M return: 0.44% (upper mid).1M return: 0.36% (lower mid).1M return: 0.16% (bottom quartile).1M return: 0.47% (upper mid).1M return: 0.50% (top quartile).1M return: 0.50% (top quartile).1M return: 0.43% (lower mid).1M return: 0.48% (upper mid).
Point 7Sharpe: 1.73 (lower mid).Sharpe: 2.62 (upper mid).Sharpe: 2.39 (upper mid).Sharpe: 2.09 (lower mid).Sharpe: 1.24 (bottom quartile).Sharpe: -1.66 (bottom quartile).Sharpe: 2.65 (top quartile).Sharpe: 2.84 (top quartile).Sharpe: -0.98 (bottom quartile).Sharpe: 2.20 (upper mid).
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: -0.47 (bottom quartile).Information ratio: 0.00 (lower mid).Information ratio: 0.00 (bottom quartile).Information ratio: -1.44 (bottom quartile).
Point 9Yield to maturity (debt): 5.01% (bottom quartile).Yield to maturity (debt): 8.35% (top quartile).Yield to maturity (debt): 7.14% (upper mid).Yield to maturity (debt): 7.02% (upper mid).Yield to maturity (debt): 6.87% (lower mid).Yield to maturity (debt): 7.34% (top quartile).Yield to maturity (debt): 5.55% (bottom quartile).Yield to maturity (debt): 6.43% (lower mid).Yield to maturity (debt): 7.18% (upper mid).Yield to maturity (debt): 6.07% (bottom quartile).
Point 10Modified duration: 0.54 yrs (lower mid).Modified duration: 2.95 yrs (bottom quartile).Modified duration: 0.48 yrs (upper mid).Modified duration: 0.63 yrs (lower mid).Modified duration: 1.05 yrs (bottom quartile).Modified duration: 0.53 yrs (upper mid).Modified duration: 0.05 yrs (top quartile).Modified duration: 0.07 yrs (top quartile).Modified duration: 1.66 yrs (bottom quartile).Modified duration: 0.10 yrs (upper mid).

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% (bottom quartile).
  • Sharpe: 1.73 (lower mid).
  • Information ratio: 0.00 (top quartile).
  • Yield to maturity (debt): 5.01% (bottom quartile).
  • Modified duration: 0.54 yrs (lower mid).

Axis Credit Risk Fund

  • Lower mid AUM (₹367 Cr).
  • Established history (11+ yrs).
  • Rating: 5★ (top quartile).
  • Risk profile: Moderate.
  • 1Y return: 7.60% (top quartile).
  • 1M return: -0.18% (bottom quartile).
  • Sharpe: 2.62 (upper mid).
  • Information ratio: 0.00 (top quartile).
  • Yield to maturity (debt): 8.35% (top quartile).
  • Modified duration: 2.95 yrs (bottom quartile).

Aditya Birla Sun Life Savings Fund

  • Top quartile AUM (₹21,467 Cr).
  • Established history (22+ yrs).
  • Rating: 5★ (upper mid).
  • Risk profile: Moderately Low.
  • 1Y return: 6.76% (upper mid).
  • 1M return: 0.44% (upper mid).
  • Sharpe: 2.39 (upper mid).
  • Information ratio: 0.00 (upper mid).
  • Yield to maturity (debt): 7.14% (upper mid).
  • Modified duration: 0.48 yrs (upper mid).

Aditya Birla Sun Life Money Manager Fund

  • Highest AUM (₹30,778 Cr).
  • Established history (20+ yrs).
  • Rating: 5★ (upper mid).
  • Risk profile: Low.
  • 1Y return: 6.52% (upper mid).
  • 1M return: 0.36% (lower mid).
  • Sharpe: 2.09 (lower mid).
  • Information ratio: 0.00 (upper mid).
  • Yield to maturity (debt): 7.02% (upper mid).
  • Modified duration: 0.63 yrs (lower mid).

UTI Banking & PSU Debt Fund

  • Upper mid AUM (₹1,099 Cr).
  • Established history (12+ yrs).
  • Rating: 5★ (upper mid).
  • Risk profile: Moderate.
  • 1Y return: 6.51% (upper mid).
  • 1M return: 0.16% (bottom quartile).
  • Sharpe: 1.24 (bottom quartile).
  • Information ratio: 0.00 (upper mid).
  • Yield to maturity (debt): 6.87% (lower mid).
  • Modified duration: 1.05 yrs (bottom quartile).

PGIM India Low Duration Fund

  • Bottom quartile AUM (₹104 Cr).
  • Established history (18+ yrs).
  • Rating: 5★ (lower mid).
  • Risk profile: Moderate.
  • 1Y return: 6.30% (lower mid).
  • 1M return: 0.47% (upper mid).
  • Sharpe: -1.66 (bottom quartile).
  • Information ratio: 0.00 (lower mid).
  • Yield to maturity (debt): 7.34% (top quartile).
  • Modified duration: 0.53 yrs (upper mid).

Indiabulls Liquid Fund

  • Lower mid AUM (₹193 Cr).
  • Established history (14+ yrs).
  • Rating: 5★ (lower mid).
  • Risk profile: Low.
  • 1Y return: 6.17% (lower mid).
  • 1M return: 0.50% (top quartile).
  • Sharpe: 2.65 (top quartile).
  • Information ratio: -0.47 (bottom quartile).
  • Yield to maturity (debt): 5.55% (bottom quartile).
  • Modified duration: 0.05 yrs (top quartile).

PGIM India Insta Cash Fund

  • Upper mid AUM (₹677 Cr).
  • Established history (18+ yrs).
  • Rating: 5★ (bottom quartile).
  • Risk profile: Low.
  • 1Y return: 6.13% (bottom quartile).
  • 1M return: 0.50% (top quartile).
  • Sharpe: 2.84 (top quartile).
  • Information ratio: 0.00 (lower mid).
  • Yield to maturity (debt): 6.43% (lower mid).
  • Modified duration: 0.07 yrs (top quartile).

PGIM India Short Maturity Fund

  • Bottom quartile AUM (₹28 Cr).
  • Established history (23+ yrs).
  • Rating: 5★ (bottom quartile).
  • Risk profile: Moderate.
  • 1Y return: 6.08% (bottom quartile).
  • 1M return: 0.43% (lower mid).
  • Sharpe: -0.98 (bottom quartile).
  • Information ratio: 0.00 (bottom quartile).
  • Yield to maturity (debt): 7.18% (upper mid).
  • Modified duration: 1.66 yrs (bottom quartile).

JM Liquid Fund

  • Upper mid AUM (₹2,524 Cr).
  • Oldest track record among peers (28 yrs).
  • Rating: 5★ (bottom quartile).
  • Risk profile: Low.
  • 1Y return: 6.04% (bottom quartile).
  • 1M return: 0.48% (upper mid).
  • Sharpe: 2.20 (upper mid).
  • Information ratio: -1.44 (bottom quartile).
  • Yield to maturity (debt): 6.07% (bottom quartile).
  • Modified duration: 0.10 yrs (upper mid).
*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.

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  • 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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