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  • Category: Mutual Funds

    Which is better Mutual fund or RD?

    I am planing to invest 3,000/- per month for 3 years, but i am confused whether Mutual fund will be better or Recurring Deposit.

    I will be very thankful if any one can help me in this and also let me know which will give me high returns.


  • #71475
    Risk is always associated with the returns. If you want higher returns you need to bear high risk profile. This is applicable in all areas.

    RD gives generally 6-8.5% kind of returns with assured principal and interest amount.

    Mutual funds gives generally 12-18%(if they performed good over the given period) kind of returns with bearing the risk of loosing PRINCIPAL INVESTMENT too.
    Generally mutual funds give +ve returns over longer periods(more than 3 years).

    Basing on the risk appetite you decide which one to opt in.

    *Live Ur life Best ---- Do Ur Best in life*

  • #71483
    Hi Parvaiz,I am glad to hear that you want to do systematic savings.Well coming to your question the fact remains the percentage of risk you can bear for your age.Since,as we all know that the stock market has touched almost 19500 sensex levels the head room is limited with more risk on your investment in Mutual funds at this stage.A good idea would be to invest your money in RDs according to me.Anyways

    Happy Investing

  • #71484
    Well I forgot to add that if you are keen on investing in Mutual funds then why don't you look in Systematic Investment Plan(SIP)as an option.

  • #72000
    As compare mutual fund to RD then mutual fund is good because they gives good return, but risk also involve in it, today in market lots of companies is offering many kind of mutual fund product so which product will be good for us depend on our requirement. Today many companies in the market so we should also see which company and which product is good for us for this we should check their past performance and return % .As far as i suggest reliance, SBI, UTI, LIC are good company where you can invest you can also opt SIP .

  • #72153
    Mutual fund and recurring deposit are two different types of investments. Return on Investment in mutual fund depends upon market condition. If one can make long term investment then it can give very good returns, we can expect return of 15% p.a. Return on mutual fund depends on market so one can't predict the return but there are some very food schemes which have generated more than 20% or 25% or even 30% returns in long term. So conservatively, we can expect 15% returns.

    Recurring deposit is safe investment which does not give good returns. But fixed percentage of return, one would receive on maturity.

    Investment in Mutual Fund can be preferred.

  • #72230
    It is universal rules, that higher the risk the higher would be returns. While RD is safe, the return on RD is very limited near to nil.

    In my view, Mutual Fund is more suitable for higher returns. Although it has risk, but it has not the risk to the extent of that one which exist in Stock market. As the invested money in Mutual Fund is diversified in various stocks, so, in the case of the fall of market it doesn't affect the Mutual Fund, as it affect to the equity invested directly in Mutual Fund.

    I would advise you to go for Mutual fund if you want to earn handsome money from your cash. In case, if you would like to save your money and not interested in earning out of it, you may opt for RD, which is almost safe.

    Inspiring Quote: “A journey of a thousand miles begins with a single step" Lao-tsu
    Mohammed Abuhuraira Akrami,

  • #72714
    If you invest INR 3000/- for 3yrs(@9% interest pa, which most banks are giving these days) you will get INR 125233.30p. This is certain and fixed. It is a near zero risk invertment.

    However, Investing in mutual fund will give a sum which is uncertain. Generally the return would be more taking into account the growth of the indian economy. I suggest you invest in diversified growth mutual fund.

  • #73256
    i would suggest you, you go for mutual funds. these are the best funds for long terms. it ll give you annual returns 10-25%.
    HDFC TOP 200.
    Franklin India Blue Chip Fund
    DSPBR top 100 Equity
    IDFC premier equity

    Happy Investiing

    Harjit Singh

  • #73310
    Dear friend,
    It depends on your return expectation. If want more interest or more return after three years, can go for mutual fund. But selecting the company and sector plays a major role. you should get some information about current trends in various sectors like power, finance, etc. Also go through the company's growth and get information, also you should have idea about the growth in next 3 to 5 years. Hence go through the company profile and get information from others who are well versed in mutual fund transaction, then go accordingly. Less risk is there in Mutural fund.

    Otherwise if you want normal interest rate or safe return for your money, then you can deposit in Recurring deposit every month. For three years, you will get nominal interest rate for your total accumulated money for three years. But the amount will be safe and you will get definite interest amount as prescribed by the government. You can open RD account in either post office or in Bank. There will not be any risk in Recurring deposit.

    So think well and go according to your need.

  • #74393
    I would be in favor of diversified mutual funds systematic investment plans(SIP), as they give you a moderate to good return with low to moderate risk.Indian economy is growing rapidly and in next three years market will see in general positive trend.

    Also now mutual funds do not charges any entry load and exitload( except for fist year withdrawl) so you will get good return with a flexiblity to get your money back directly in your account at a short notice of one or two days period.

    Ofcorse,choosing fund will be important but not a very tough task,if you do small research on net.

    Following are few funds which gives good return

    HDFC Top 200
    Reliance Growth fund (retail plan)
    BNP sundaram Select Focus

    Don't Forget the key rule, Don't go for anything which promise you assured return more than 16-17%, chances are high loosing principal.


  • #74407
    Return simply depend on the risk you want to take.
    If the amount you are saving is for any necessary requirement then you go for RD or any debt mutual fund but if you want growth with slight risk then go for balanced mutual fund for 3 year but if you increse your time period to 5 year then you can go for equity diversified fund with SIP option.Investing in mutual has various benefits which makes it an ideal investment avenue for all types of saving.Some of the primary benefits are Professional investment management,Diversification,Low management Cost,Convenience and Flexibility to buy online & offline,Liquidity for anytime selling,Transparency by declaring portfolio regularly,Variety by different fund option

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