highlights
The money invested in RD is absolutely safe.
Investing in mutual funds is riskier.
MF gives higher returns than RD.
New Delhi. Capital invested in the right place will bring enormous profits in the future. There are many types of systems available today for investing money. But where to invest to get better profits is a big question. If you want to invest monthly, you can invest money in mutual funds through Recurring Deposit (RD) and Systematic Investment Plan (Mutual Fund SIP). The number of investors investing in mutual funds is constantly increasing. Many investors also invest money in RD. It’s also a great investment tool for achieving short-term financial goals.
When it comes to investing in RD or mutual funds through SIP, many investors get confused when deciding between the two. SIP can be invested in both mutual funds and RDs, but there is still a certain difference between these two investment schemes. The money invested in RD is absolutely safe. At the same time, investing in mutual funds is more risky. Let us know the pros and cons of both in detail today. And also understand which of the two investment options is more advantageous for you.
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RD : Money safe, guaranteed returns
Recurring deposits are debt instruments. RD can be performed in the bank for periods ranging from one year to 10 years. RD is considered a good way to make big bucks in the short term. Small amounts can be deposited in RD each month. It should be noted here that neither a tax exemption for investing in RD nor the interest received from it is tax exempt. RD has a lock-up period, so banks charge a fee for withdrawing funds before the term expires.
The yield of RD is lower than the inflation rate. Up to Rs 5 lakh deposited in RD are guaranteed by Deposit Insurance and Guarantee Corporation. That is, if the bank goes down for any reason, the amount up to Rs. 5 lakh will not be returned to the investor under any circumstances.
MF SIP: Higher risk, higher returns
Mutual fund SIPs are very flexible. You can choose a daily, weekly, fortnightly, monthly, quarterly or yearly investment option. SIP is the best way to invest in the stock market. The only way to get the best returns is to use SIP for at least 5 years. Investing in MF SIP is risky and depends on the market. There is no return guarantee here. Just close SIP and withdraw money. Yes, the returns here are excellent. Typically, mutual fund returns are higher than the rate of inflation. Also RD and FD are not facing their returns.
where do you invest money
Investment advisers say that the decision to invest money in any system should be made by the investor, considering their risk appetite and financial goals. Those who do not have much knowledge about the financial market or need to achieve a short-term goal should invest in RD. Similarly, choose Mutual Fund SIP to invest for the long term. The Mutual Fund SIP is also suitable for investors who have good market knowledge and are able to take risks. If you’re happy with a modest return but don’t want to lose your money, then a recurring deposit is for you.
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Keywords: Business News in Hindi, investment and return, investment tips, Tips for making money, Mutual Fund SIP Returns
FIRST RELEASED : March 21, 2023 4:36 PM IST
