Bank FDs Very low risk and low liquidity. Low returns, but assured. Depending on the tenure and bank, could be around 6-9% Since returns are fully taxable, the post-tax returns will be still lower. Good for very low risk investors and those in the nil or low tax brackets. As interest rate scenario seems to be peaking, one could consider investing in 3-5 year FDs. FMPs Low risk and low Liquidity. No assured returns but depending on tenure and the MF, could be around 6-9%. (Ability to deliver the indicative returns). MFs attract much lower taxation and hence give better post-tax returns vis-à-vis Bank FDs. Good for low risk investors, but in high tax brackets. Good for investing the debt portion of one’s portfolio. Floating Rate Funds Low risk and high liquidity. Market linked. Today could be around 5-7%. Lower taxation of MFs make...
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