Is mutual fund better than fixed deposit?
It depends on your goal and risk comfort and varies for each person. A fixed deposit (FD) is safer, you know exactly how much you’ll get at maturity, and the returns are fixed (for example, if you put ₹1 lakh in an FD at 6% for 1 year, you’ll get around ₹6,000 interest, guaranteed).
Mutual funds, especially equity ones, can give higher returns over time, but they go up and down with the market. For example, I invested ₹1 lakh in an equity mutual fund, and in one year it grew to ₹1.15 lakh but the year before, the same fund dropped to ₹95,000.
So, if you want safety and guaranteed income, FD is better. If you’re okay with short-term ups and downs for potentially better long-term growth, mutual funds can be worth it. It is better to diversify your investment portfolio for better returns.