FD Alternatives
What is the best alternative to Fixed Deposits in India ?
Due to high liquidity, ease of use and higher returns, Debt (e.g Liquid Funds) mutual funds are probably the best alternative to Fixed Deposit investments. It's also very easy to manage taxes with liquid or debt funds and if you're in higher tax brackets, you could save some in taxes with debt funds. However, if you're a young investor who can take risk and want to stay invested for long term (5y+), equity mutual funds or index funds are better for creating wealth. We've listed few mutual funds here, to help you get started. The list has been prepared based on the parent company and the past performance of the fund. The debt funds have no exit load fees (that means you can withdraw money from these funds any time, without any "minimum duration" requirement).
Debt & Liquid Funds
Recommended for emergency funds or parking money for any duration etc. Returns are similar to FD and offers higher liquidity.
| Fund Name | Annual Returns (5y) | Fund Class | Exit Load |
|---|---|---|---|
| Parag Parikh Liquid Fund (PPLF) | 5.4% | Liquid Fund | 0.00% |
| Quantum Liquid Fund Direct | 5.5% | Liquid Fund | 0.00% |
| Motilal Oswal Liquid Growth Direct Plan | 5.4% | Liquid Fund | 0.00% |
Equity Funds
Good alternative to long term FD (5y, 10y etc). Returns are significantly higher than FD and it's not that risky if you can stay invested in long term (10y +).
| Fund Name | Annual Returns (5y) | Fund Class | Exit Load |
|---|---|---|---|
| UTI Nifty Index Growth Direct Plan | 10.3% | Index (Nifty 50) | 0 |
| UTI Nifty Next 50 Index Growth Direct Plan | - | Index (Nifty Next 50) | 0 |
| Parag Parikh Long Term Equity Growth Direct Plan | 11.8% | Multi Cap Fund | 2% (1y) |
| Motilal Oswal Nasdaq 100 | 14% | US Equity | NA |
| Motilal Oswal S&P 500 Index Fund | 10% | US Equity | NA |