Debt mutual funds vs bank FDs: Where to invest for higher returns?
debt mutual funds have outperformed against the return offered on fixed deposits for a tenure of one year. These six categories offered returns ranging between 6.81% — 7.46% in the last one year against the interest rate of 6.8% offered by SBI on fixed deposits for the tenure of one year to less than 2 years.
ETMutualFunds analysed the one year performance of the all debt mutual fund categories with the interest rate on fixed deposits offered by the PSU bank — SBI.
SBI FD interest rates
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For a tenure of 180 days to 210 days, SBI raised the interest rate by 25 basis points from 5.75% to 6%.
For a fixed deposit of tenure 211 days to less than 1 year, the interest rate is hiked from 6% to 6.25%. In two years to less than 3 years, the interest rate offered is 7%.
For tenure of three years to less than five years and five years to less than 10 years, the interest rates offered are 6.75% and 6.5%, respectively.
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Debt Mutual Funds
Floating Rate Funds and Credit Risk Funds gave 7.46% return each in the last one year. There were around 14 funds in the floating rate fund category. Baroda BNP Paribas Floater Fund, the topper in the floating rate fund category, offered 8.04% return in the said period. SBI Floating Rate Debt Fund gave 8.03% return.
DSP Credit Risk Fund, the topper in the credit risk fund category, gave 15.15% return in
