I am trying to find out mutual fund categories which have safety level same and returns higher than bank FD.
Can you please answer following specific things on liquid fund:
1. Returns Difference: For a person in 30% tax bracket, how much more or less % post-tax returns (e.g. +/- 1%) can be expected as compared to an FD of, say a govt bank like SBI.
2. Safety: Even a govt bank carries certain risk (e.g. bank going default or bankrupt) of losing principal amount. If we consider the safety in a govt bank FD to be 99%, what would be the safety level in fund? If possible, please mention the potential scenarios also that contribute to increased risk in fund.
Experts: It would be great if you can answer the above questions for arbitrage fund, ultra short term debt and short term debt funds as well.