Debt Fund  

Fixed Deposit


Debt Fund Vs Fixed Deposit

Debt funds' returns vary with the market, unlike fixed deposits which offer fixed returns regardless of market conditions.

Debt Funds Meaning

Debt mutual funds invest in bonds and securities, offering stable returns with interest and credit risks. Ideal for short-term goals like buying a vehicle or vacation planning.

FD Meaning

Fixed deposits are a safe investment with banks/NBFCs, offering fixed returns set by RBI, higher than savings accounts, despite inflation and liquidity risks.

Debt Fund Vs FD

Debt funds offer returns through interest and capital gains/losses, while FDs yield returns only from interest income.


Debt funds returns: 7-9%. Fixed deposits: Fixed returns of 4-8%.

Managing Fees

Debt funds charge minimal management fees, while fixed deposits incur no management fees.


Debt funds carry interest, default, reinvestment, credit, and inflation risks, while fixed deposits mainly have inflation, liquidity, and default risks.

Way of investment

Debt funds offer investment options via SIP or lump sum, while fixed deposits are limited to one-time investments.


Debt funds allow any time redemption without exit load, while fixed deposits can be withdrawn at maturity or earlier with a penalty.

Learn how fixed deposits differ from debt funds for smarter investing. Click to read our guide and choose what's best for your financial goals!