Due to high liquidity, ease of use and higher returns, Debt (e.g Ultra Short Term Debt) 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).

Note : Past performances are only indicative. You should thoroughly research before making any decision.

Debt & Liquid Funds

Recommended for emergency funds or parking money for any duration etc. Returns are better than FD and offers higher liquidity.

Fund Name Annual Returns (5y) Fund Class Exit Load
Franklin India Ultra Short Bond Fund (G) 9.9% Ultra Short Term Debt 0.00%
Reliance Money Manager Fund (G) 8.9% Ultra Short Term Debt 0.00%
Parag Parikh Liquid Growth Direct Plan 6.46% Liquid Fund 0.00%
Debt mutual funds are also good alternative to long term fixed deposits.
Risk Level : Low

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
Franklin India Bluechip Fund (Growth) 10% Large Cap 1% (1y)
HDFC Top 200 Fund (Growth) 11.9% Large Cap 1% (1y)
ICICI Prudential Large & Mid Cap Fund (Growth) 11.8% Large Cap 1% (1y)
Franklin India Prima Fund (Growth) 13% Small & Mid Cap 1% (1y)
Parag Parikh Long Term Equity Growth Direct Plan 11.8% Multi Cap Fund 2% (1y)
Equity mutual funds are good for beating inflation and generating wealth over long term.
Risk Level : High
Tip : Buy direct plans of the mutual funds, because it generates higher returns as compared to regular plan.