Fixed deposit or debt fund?

An FD pays a fixed rate and returns your principal on a known date. A debt fund holds bonds and its value moves with interest rates. FDs give certainty. Debt funds offer liquidity and, in some categories, marginally better returns for slightly more variability.

What it means

An FD pays a fixed rate and returns your principal on a known date. A debt fund holds bonds and its value moves with interest rates.

Why it matters to a household

FDs give certainty. Debt funds offer liquidity and, in some categories, marginally better returns for slightly more variability.

Where it trips people up

Assuming debt funds cannot fall. They can, particularly when rates rise or a holding is downgraded.

In an Indian household

FD interest is taxed annually at your slab rate, which is why a 7% FD in the highest bracket may not beat inflation. Check the current rules for debt funds before assuming a tax advantage.

Where FamTally comes in

FamTally is a free AI-driven money manager built for Indian families. It holds your loans, income, expenses, assets, insurance and goals in one place, forecasts five years ahead, and lets you ask an assistant questions about your own numbers rather than looking up general advice. Everything on this page is the kind of thing it works out for you automatically.

Stop doing this in a spreadsheet

FamTally keeps your loans, income, expenses, assets, insurance and goals in one place, forecasts five years ahead, and answers questions about your own numbers. Free, and built for Indian families.