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Are Fixed Deposits Still the Safest Way to Grow Money in 2025?

Updated on September 23, 2025 , 104 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. But in 2025, 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 2025

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 in 2025: Where to Consider Investing Instead

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

✅ 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 ₹43.2782
↓ -0.71
₹1,42143.168.490.151.616.715.9 Global
SBI PSU Fund Growth ₹32.0225
↓ -0.20
₹5,1790.57.3-4.231.232.523.5 Sectoral
Invesco India PSU Equity Fund Growth ₹63.78
↓ -0.23
₹1,341-0.111.5-3.430.830.125.6 Sectoral
Franklin India Opportunities Fund Growth ₹259.705
↓ -0.69
₹7,5094.913.1-0.129.530.137.3 Sectoral
ICICI Prudential Infrastructure Fund Growth ₹195.15
↓ -0.91
₹7,645-0.59.5-3.228.637.427.4 Sectoral
Nippon India Power and Infra Fund Growth ₹348.978
↓ -2.72
₹7,1750.49.8-8.328.532.426.9 Sectoral
LIC MF Infrastructure Fund Growth ₹49.7351
↓ -0.38
₹995-1.112.9-3.528.232.747.8 Sectoral
HDFC Infrastructure Fund Growth ₹47.578
↓ -0.26
₹2,483-0.39.3-52834.623 Sectoral
Franklin Build India Fund Growth ₹141.848
↓ -0.86
₹2,8840.59.7-4.527.734.427.8 Sectoral
Invesco India Mid Cap Fund Growth ₹180.12
↓ -1.51
₹8,0620.617.83.427.22843.1 Mid Cap
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 24 Sep 25

Research Highlights & Commentary of 10 Funds showcased

CommentaryDSP World Gold FundSBI PSU FundInvesco India PSU Equity FundFranklin India Opportunities FundICICI Prudential Infrastructure FundNippon India Power and Infra FundLIC MF Infrastructure FundHDFC Infrastructure FundFranklin Build India FundInvesco India Mid Cap Fund
Point 1Bottom quartile AUM (₹1,421 Cr).Upper mid AUM (₹5,179 Cr).Bottom quartile AUM (₹1,341 Cr).Upper mid AUM (₹7,509 Cr).Top quartile AUM (₹7,645 Cr).Upper mid AUM (₹7,175 Cr).Bottom quartile AUM (₹995 Cr).Lower mid AUM (₹2,483 Cr).Lower mid AUM (₹2,884 Cr).Highest AUM (₹8,062 Cr).
Point 2Established history (18+ yrs).Established history (15+ yrs).Established history (15+ yrs).Oldest track record among peers (25 yrs).Established history (20+ yrs).Established history (21+ yrs).Established history (17+ yrs).Established history (17+ yrs).Established history (16+ yrs).Established history (18+ yrs).
Point 3Rating: 3★ (upper mid).Rating: 2★ (bottom quartile).Rating: 3★ (upper mid).Rating: 3★ (upper mid).Rating: 3★ (lower mid).Rating: 4★ (top quartile).Not Rated.Rating: 3★ (lower mid).Top rated.Rating: 2★ (bottom quartile).
Point 4Risk profile: High.Risk profile: High.Risk profile: High.Risk profile: Moderately High.Risk profile: High.Risk profile: High.Risk profile: High.Risk profile: High.Risk profile: High.Risk profile: Moderately High.
Point 55Y return: 16.72% (bottom quartile).5Y return: 32.46% (upper mid).5Y return: 30.09% (bottom quartile).5Y return: 30.11% (lower mid).5Y return: 37.37% (top quartile).5Y return: 32.40% (lower mid).5Y return: 32.69% (upper mid).5Y return: 34.62% (top quartile).5Y return: 34.38% (upper mid).5Y return: 28.01% (bottom quartile).
Point 63Y return: 51.63% (top quartile).3Y return: 31.18% (top quartile).3Y return: 30.79% (upper mid).3Y return: 29.51% (upper mid).3Y return: 28.63% (upper mid).3Y return: 28.50% (lower mid).3Y return: 28.21% (lower mid).3Y return: 28.02% (bottom quartile).3Y return: 27.75% (bottom quartile).3Y return: 27.20% (bottom quartile).
Point 71Y return: 90.14% (top quartile).1Y return: -4.16% (lower mid).1Y return: -3.44% (upper mid).1Y return: -0.13% (upper mid).1Y return: -3.17% (upper mid).1Y return: -8.35% (bottom quartile).1Y return: -3.54% (lower mid).1Y return: -5.05% (bottom quartile).1Y return: -4.53% (bottom quartile).1Y return: 3.40% (top quartile).
Point 8Alpha: 3.15 (top quartile).Alpha: -0.35 (bottom quartile).Alpha: 5.81 (top quartile).Alpha: 2.40 (upper mid).Alpha: 0.00 (upper mid).Alpha: -3.51 (bottom quartile).Alpha: -1.71 (bottom quartile).Alpha: 0.00 (upper mid).Alpha: 0.00 (lower mid).Alpha: 0.00 (lower mid).
Point 9Sharpe: 1.80 (top quartile).Sharpe: -0.81 (bottom quartile).Sharpe: -0.58 (lower mid).Sharpe: -0.43 (upper mid).Sharpe: -0.48 (upper mid).Sharpe: -0.66 (bottom quartile).Sharpe: -0.46 (upper mid).Sharpe: -0.64 (lower mid).Sharpe: -0.64 (bottom quartile).Sharpe: 0.14 (top quartile).
Point 10Information ratio: -1.09 (bottom quartile).Information ratio: -0.37 (bottom quartile).Information ratio: -0.46 (bottom quartile).Information ratio: 1.75 (top quartile).Information ratio: 0.00 (upper mid).Information ratio: 0.79 (top quartile).Information ratio: 0.34 (upper mid).Information ratio: 0.00 (upper mid).Information ratio: 0.00 (lower mid).Information ratio: 0.00 (lower mid).

DSP World Gold Fund

  • Bottom quartile AUM (₹1,421 Cr).
  • Established history (18+ yrs).
  • Rating: 3★ (upper mid).
  • Risk profile: High.
  • 5Y return: 16.72% (bottom quartile).
  • 3Y return: 51.63% (top quartile).
  • 1Y return: 90.14% (top quartile).
  • Alpha: 3.15 (top quartile).
  • Sharpe: 1.80 (top quartile).
  • Information ratio: -1.09 (bottom quartile).

SBI PSU Fund

  • Upper mid AUM (₹5,179 Cr).
  • Established history (15+ yrs).
  • Rating: 2★ (bottom quartile).
  • Risk profile: High.
  • 5Y return: 32.46% (upper mid).
  • 3Y return: 31.18% (top quartile).
  • 1Y return: -4.16% (lower mid).
  • Alpha: -0.35 (bottom quartile).
  • Sharpe: -0.81 (bottom quartile).
  • Information ratio: -0.37 (bottom quartile).

Invesco India PSU Equity Fund

  • Bottom quartile AUM (₹1,341 Cr).
  • Established history (15+ yrs).
  • Rating: 3★ (upper mid).
  • Risk profile: High.
  • 5Y return: 30.09% (bottom quartile).
  • 3Y return: 30.79% (upper mid).
  • 1Y return: -3.44% (upper mid).
  • Alpha: 5.81 (top quartile).
  • Sharpe: -0.58 (lower mid).
  • Information ratio: -0.46 (bottom quartile).

Franklin India Opportunities Fund

  • Upper mid AUM (₹7,509 Cr).
  • Oldest track record among peers (25 yrs).
  • Rating: 3★ (upper mid).
  • Risk profile: Moderately High.
  • 5Y return: 30.11% (lower mid).
  • 3Y return: 29.51% (upper mid).
  • 1Y return: -0.13% (upper mid).
  • Alpha: 2.40 (upper mid).
  • Sharpe: -0.43 (upper mid).
  • Information ratio: 1.75 (top quartile).

ICICI Prudential Infrastructure Fund

  • Top quartile AUM (₹7,645 Cr).
  • Established history (20+ yrs).
  • Rating: 3★ (lower mid).
  • Risk profile: High.
  • 5Y return: 37.37% (top quartile).
  • 3Y return: 28.63% (upper mid).
  • 1Y return: -3.17% (upper mid).
  • Alpha: 0.00 (upper mid).
  • Sharpe: -0.48 (upper mid).
  • Information ratio: 0.00 (upper mid).

Nippon India Power and Infra Fund

  • Upper mid AUM (₹7,175 Cr).
  • Established history (21+ yrs).
  • Rating: 4★ (top quartile).
  • Risk profile: High.
  • 5Y return: 32.40% (lower mid).
  • 3Y return: 28.50% (lower mid).
  • 1Y return: -8.35% (bottom quartile).
  • Alpha: -3.51 (bottom quartile).
  • Sharpe: -0.66 (bottom quartile).
  • Information ratio: 0.79 (top quartile).

LIC MF Infrastructure Fund

  • Bottom quartile AUM (₹995 Cr).
  • Established history (17+ yrs).
  • Not Rated.
  • Risk profile: High.
  • 5Y return: 32.69% (upper mid).
  • 3Y return: 28.21% (lower mid).
  • 1Y return: -3.54% (lower mid).
  • Alpha: -1.71 (bottom quartile).
  • Sharpe: -0.46 (upper mid).
  • Information ratio: 0.34 (upper mid).

HDFC Infrastructure Fund

  • Lower mid AUM (₹2,483 Cr).
  • Established history (17+ yrs).
  • Rating: 3★ (lower mid).
  • Risk profile: High.
  • 5Y return: 34.62% (top quartile).
  • 3Y return: 28.02% (bottom quartile).
  • 1Y return: -5.05% (bottom quartile).
  • Alpha: 0.00 (upper mid).
  • Sharpe: -0.64 (lower mid).
  • Information ratio: 0.00 (upper mid).

Franklin Build India Fund

  • Lower mid AUM (₹2,884 Cr).
  • Established history (16+ yrs).
  • Top rated.
  • Risk profile: High.
  • 5Y return: 34.38% (upper mid).
  • 3Y return: 27.75% (bottom quartile).
  • 1Y return: -4.53% (bottom quartile).
  • Alpha: 0.00 (lower mid).
  • Sharpe: -0.64 (bottom quartile).
  • Information ratio: 0.00 (lower mid).

Invesco India Mid Cap Fund

  • Highest AUM (₹8,062 Cr).
  • Established history (18+ yrs).
  • Rating: 2★ (bottom quartile).
  • Risk profile: Moderately High.
  • 5Y return: 28.01% (bottom quartile).
  • 3Y return: 27.20% (bottom quartile).
  • 1Y return: 3.40% (top quartile).
  • Alpha: 0.00 (lower mid).
  • Sharpe: 0.14 (top 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
Axis Credit Risk Fund Growth ₹21.818
↑ 0.00
₹3661.84.78.57.887.93%2Y 3M 18D2Y 9M 4D
PGIM India Credit Risk Fund Growth ₹15.5876
↑ 0.00
₹390.64.48.43 5.01%6M 14D7M 2D
UTI Banking & PSU Debt Fund Growth ₹22.2816
↑ 0.01
₹8131.44.487.67.66.61%1Y 8M 12D1Y 11M 8D
Aditya Birla Sun Life Savings Fund Growth ₹557.09
↑ 0.09
₹21,5211.63.97.97.57.96.76%5M 8D6M 11D
Aditya Birla Sun Life Money Manager Fund Growth ₹376.152
↑ 0.04
₹27,6651.53.97.87.67.86.24%5M 12D5M 12D
ICICI Prudential Long Term Plan Growth ₹37.3745
↑ 0.03
₹14,9050.93.67.67.98.27.64%4Y 9M 4D12Y 7M 10D
HDFC Corporate Bond Fund Growth ₹32.9405
↑ 0.01
₹35,7000.93.97.67.88.67.06%4Y 2M 1D4Y 4M 28D
Aditya Birla Sun Life Corporate Bond Fund Growth ₹114.226
↑ 0.04
₹28,1090.93.87.57.98.57.21%4Y 8M 8D7Y 3M
HDFC Banking and PSU Debt Fund Growth ₹23.2891
↑ 0.01
₹5,8900.947.57.47.96.94%3Y 5M 5D4Y 11M 19D
Indiabulls Liquid Fund Growth ₹2,559.03
↑ 0.17
₹3031.43.26.96.97.45.88%1M 3D1M 3D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 25 Sep 25

Research Highlights & Commentary of 10 Funds showcased

CommentaryAxis Credit Risk Fund PGIM India Credit Risk FundUTI Banking & PSU Debt FundAditya Birla Sun Life Savings FundAditya Birla Sun Life Money Manager FundICICI Prudential Long Term PlanHDFC Corporate Bond FundAditya Birla Sun Life Corporate Bond FundHDFC Banking and PSU Debt FundIndiabulls Liquid Fund
Point 1Bottom quartile AUM (₹366 Cr).Bottom quartile AUM (₹39 Cr).Lower mid AUM (₹813 Cr).Upper mid AUM (₹21,521 Cr).Upper mid AUM (₹27,665 Cr).Upper mid AUM (₹14,905 Cr).Highest AUM (₹35,700 Cr).Top quartile AUM (₹28,109 Cr).Lower mid AUM (₹5,890 Cr).Bottom quartile AUM (₹303 Cr).
Point 2Established history (11+ yrs).Established history (11+ yrs).Established history (11+ yrs).Established history (22+ yrs).Established history (19+ yrs).Established history (15+ yrs).Established history (15+ yrs).Oldest track record among peers (28 yrs).Established history (11+ yrs).Established history (13+ 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: Moderate.Risk profile: Moderately Low.Risk profile: Moderately Low.Risk profile: Moderately Low.Risk profile: Low.
Point 51Y return: 8.53% (top quartile).1Y return: 8.43% (top quartile).1Y return: 8.00% (upper mid).1Y return: 7.86% (upper mid).1Y return: 7.76% (upper mid).1Y return: 7.59% (lower mid).1Y return: 7.57% (lower mid).1Y return: 7.54% (bottom quartile).1Y return: 7.52% (bottom quartile).1Y return: 6.86% (bottom quartile).
Point 61M return: 0.68% (top quartile).1M return: 0.27% (bottom quartile).1M return: 0.51% (upper mid).1M return: 0.48% (lower mid).1M return: 0.46% (lower mid).1M return: 0.91% (top quartile).1M return: 0.54% (upper mid).1M return: 0.66% (upper mid).1M return: 0.41% (bottom quartile).1M return: 0.46% (bottom quartile).
Point 7Sharpe: 2.16 (upper mid).Sharpe: 1.73 (upper mid).Sharpe: 1.46 (lower mid).Sharpe: 3.66 (top quartile).Sharpe: 3.32 (upper mid).Sharpe: 0.47 (bottom quartile).Sharpe: 0.68 (bottom quartile).Sharpe: 0.66 (bottom quartile).Sharpe: 0.73 (lower mid).Sharpe: 3.54 (top 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: 0.00 (bottom quartile).Information ratio: 0.00 (bottom quartile).Information ratio: -1.18 (bottom quartile).
Point 9Yield to maturity (debt): 7.93% (top quartile).Yield to maturity (debt): 5.01% (bottom quartile).Yield to maturity (debt): 6.61% (lower mid).Yield to maturity (debt): 6.76% (lower mid).Yield to maturity (debt): 6.24% (bottom quartile).Yield to maturity (debt): 7.64% (top quartile).Yield to maturity (debt): 7.06% (upper mid).Yield to maturity (debt): 7.21% (upper mid).Yield to maturity (debt): 6.94% (upper mid).Yield to maturity (debt): 5.88% (bottom quartile).
Point 10Modified duration: 2.30 yrs (lower mid).Modified duration: 0.54 yrs (upper mid).Modified duration: 1.70 yrs (upper mid).Modified duration: 0.44 yrs (top quartile).Modified duration: 0.45 yrs (upper mid).Modified duration: 4.76 yrs (bottom quartile).Modified duration: 4.17 yrs (bottom quartile).Modified duration: 4.69 yrs (bottom quartile).Modified duration: 3.43 yrs (lower mid).Modified duration: 0.09 yrs (top quartile).

Axis Credit Risk Fund

  • Bottom quartile AUM (₹366 Cr).
  • Established history (11+ yrs).
  • Top rated.
  • Risk profile: Moderate.
  • 1Y return: 8.53% (top quartile).
  • 1M return: 0.68% (top quartile).
  • Sharpe: 2.16 (upper mid).
  • Information ratio: 0.00 (top quartile).
  • Yield to maturity (debt): 7.93% (top quartile).
  • Modified duration: 2.30 yrs (lower mid).

PGIM India Credit Risk Fund

  • Bottom quartile AUM (₹39 Cr).
  • Established history (11+ yrs).
  • Rating: 5★ (top quartile).
  • Risk profile: Moderate.
  • 1Y return: 8.43% (top quartile).
  • 1M return: 0.27% (bottom quartile).
  • Sharpe: 1.73 (upper mid).
  • Information ratio: 0.00 (top quartile).
  • Yield to maturity (debt): 5.01% (bottom quartile).
  • Modified duration: 0.54 yrs (upper mid).

UTI Banking & PSU Debt Fund

  • Lower mid AUM (₹813 Cr).
  • Established history (11+ yrs).
  • Rating: 5★ (upper mid).
  • Risk profile: Moderate.
  • 1Y return: 8.00% (upper mid).
  • 1M return: 0.51% (upper mid).
  • Sharpe: 1.46 (lower mid).
  • Information ratio: 0.00 (upper mid).
  • Yield to maturity (debt): 6.61% (lower mid).
  • Modified duration: 1.70 yrs (upper mid).

Aditya Birla Sun Life Savings Fund

  • Upper mid AUM (₹21,521 Cr).
  • Established history (22+ yrs).
  • Rating: 5★ (upper mid).
  • Risk profile: Moderately Low.
  • 1Y return: 7.86% (upper mid).
  • 1M return: 0.48% (lower mid).
  • Sharpe: 3.66 (top quartile).
  • Information ratio: 0.00 (upper mid).
  • Yield to maturity (debt): 6.76% (lower mid).
  • Modified duration: 0.44 yrs (top quartile).

Aditya Birla Sun Life Money Manager Fund

  • Upper mid AUM (₹27,665 Cr).
  • Established history (19+ yrs).
  • Rating: 5★ (upper mid).
  • Risk profile: Low.
  • 1Y return: 7.76% (upper mid).
  • 1M return: 0.46% (lower mid).
  • Sharpe: 3.32 (upper mid).
  • Information ratio: 0.00 (upper mid).
  • Yield to maturity (debt): 6.24% (bottom quartile).
  • Modified duration: 0.45 yrs (upper mid).

ICICI Prudential Long Term Plan

  • Upper mid AUM (₹14,905 Cr).
  • Established history (15+ yrs).
  • Rating: 5★ (lower mid).
  • Risk profile: Moderate.
  • 1Y return: 7.59% (lower mid).
  • 1M return: 0.91% (top quartile).
  • Sharpe: 0.47 (bottom quartile).
  • Information ratio: 0.00 (lower mid).
  • Yield to maturity (debt): 7.64% (top quartile).
  • Modified duration: 4.76 yrs (bottom quartile).

HDFC Corporate Bond Fund

  • Highest AUM (₹35,700 Cr).
  • Established history (15+ yrs).
  • Rating: 5★ (lower mid).
  • Risk profile: Moderately Low.
  • 1Y return: 7.57% (lower mid).
  • 1M return: 0.54% (upper mid).
  • Sharpe: 0.68 (bottom quartile).
  • Information ratio: 0.00 (lower mid).
  • Yield to maturity (debt): 7.06% (upper mid).
  • Modified duration: 4.17 yrs (bottom quartile).

Aditya Birla Sun Life Corporate Bond Fund

  • Top quartile AUM (₹28,109 Cr).
  • Oldest track record among peers (28 yrs).
  • Rating: 5★ (bottom quartile).
  • Risk profile: Moderately Low.
  • 1Y return: 7.54% (bottom quartile).
  • 1M return: 0.66% (upper mid).
  • Sharpe: 0.66 (bottom quartile).
  • Information ratio: 0.00 (bottom quartile).
  • Yield to maturity (debt): 7.21% (upper mid).
  • Modified duration: 4.69 yrs (bottom quartile).

HDFC Banking and PSU Debt Fund

  • Lower mid AUM (₹5,890 Cr).
  • Established history (11+ yrs).
  • Rating: 5★ (bottom quartile).
  • Risk profile: Moderately Low.
  • 1Y return: 7.52% (bottom quartile).
  • 1M return: 0.41% (bottom quartile).
  • Sharpe: 0.73 (lower mid).
  • Information ratio: 0.00 (bottom quartile).
  • Yield to maturity (debt): 6.94% (upper mid).
  • Modified duration: 3.43 yrs (lower mid).

Indiabulls Liquid Fund

  • Bottom quartile AUM (₹303 Cr).
  • Established history (13+ yrs).
  • Rating: 5★ (bottom quartile).
  • Risk profile: Low.
  • 1Y return: 6.86% (bottom quartile).
  • 1M return: 0.46% (bottom quartile).
  • Sharpe: 3.54 (top quartile).
  • Information ratio: -1.18 (bottom quartile).
  • Yield to maturity (debt): 5.88% (bottom quartile).
  • Modified duration: 0.09 yrs (top quartile).
*List of top performing Debt fund 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.

In 2025, 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 in 2025?

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.


Author By Rohini Hiremath

Rohini Hiremath is the Content Head at Fincash.com, where she has authored and overseen hundreds of articles in the Personal Finance, investing, and fintech space. Her mission is to simplify money matters and make Financial Literacy accessible to everyday Indians. With a background in startups, SEO and fintech writing, Rohini brings a unique blend of editorial expertise, digital growth strategies and audience empathy to her content.

You can connect with her here.


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