Income Funds Vs. Fixed Deposits – Picking an investment option is never easy, but it becomes even more difficult when you have to choose between a fixed deposit and an income fund.
Let us find out the pros and cons of each of these two types of investment.
What To Choose Between Income Funds and Fixed Deposits?
Income funds are a type of mutual fund that focuses on generating current income. The main difference is that the income fund invests in a broader range of assets, including stocks and bonds.
This gives the fund the potential to generate higher returns than a fixed deposit. Income funds also tend to be more volatile, so there is the risk of losing money if the market takes a downturn.
Those looking for a conservative investment that will provide a steady income stream will find FD (fixed deposit) is a better option. If you invest carefully, you can avail the highest FD rates in India.
Income Funds and Fixed Deposits: Pros & Cons
Let us look at the pros and cons of Income funds and Fixed Deposits:
Income Funds: Pros and Cons
- Offer a steady stream of cash flow to investors
- Offer a low-cost and easy way to invest in the stock market
- They can be as simple as buying into a mutual fund
- Not as liquid as other investment types
- Higher risk of loss due to high volatility
- You won’t have as much control over the money as with a savings account or FD
Fixed Deposits Pros and Cons
- Guarantees the amount you invest will be returned with interest
- Have a higher interest rate than most other forms of investments
- The government guarantees fixed deposit rates for a certain amount of time
- The money invested is locked up for a specified period
- Interest rates are usually lower than returns from stocks and mutual funds
- Withdrawals from fixed deposits may be subject to penalties and taxes
Which Fixed Deposit Scheme Is the Best?
PNB Housing offers attractive fixed deposit rates, making it a great place to invest your money and earn interest.
- The minimum deposit amount is just Rs. 10,000, so even small investors can participate
- One of those companies which provide the highest FD rates in India
- The minimum tenure for the PNB Housing Fixed Deposit account is 12 months, and the maximum is 120 months
- PNB Housing Fixed Deposit provides the best rates, which is 6.70% for a tenure of 10 years/ 12 months
Before you invest in any of the two options, one thing is essential: research. Research extensively on the best options for you and make sure to get your finances in line. Investment options will vary, and it is essential to know about the market before jumping in. It is also important to note that what worked for someone might not work for you. So, be careful with the choices you make. A great place to start is a PNB Housing Fixed Deposit.